The clocks have gone back, half-term week is in the rear-view mirror and preview season has officially started – the countdown to Christmas is well and truly underway. It has been great to get out and about this week, and we’ve started to get a glimpse of some of the great new launches which suppliers have got lined up for next year. But inevitably, before we get round to looking at the new lines, everyone wants to start off by discussing what has been happening this year, and the events of the past few months in particular.
I have documented the disappointing sales numbers at the end of September and the early part of October in previous Blogs, so there is no need to dwell on that. Thankfully, suppliers have been echoing the feedback I got from retailers last week – that half-term saw a marked improvement in sales, matching last year’s numbers in many cases. I’ve heard that some retailers are coming back for more stock, where they had previously told suppliers they thought they had enough to last them through to Christmas. About time too, but better late than never.
The key now is to maintain that momentum over the next seven weeks. Yesterday’s toy segment on This Morning and next week’s DreamToys event should help to get the toy market plenty of valuable publicity, but another key factor at the moment seems to be retail promotions. By all accounts, as soon as a retailer drops the price of a line, they see an immediate – and significant – upturn in sales. Consumers are waiting and watching closely for deals, pouncing on offers as soon as they are sufficiently enticing. You can’t really blame them: inventory levels mean there is relatively little risk of them not getting what they want, and consumers are balancing expenditure to get as much as they can with the funds they have available.
Little surprise then that retailers are having to sharpen their metaphorical pencils – Smyths started offering Black Friday deals this week, a whole month ahead of the official event. Probably a wise move on a number of levels; the Post Office is proposing to strike on Black Friday, which will put even more pressure on couriers, while most companies are still struggling to attract sufficient numbers of warehouse staff. Black Friday always stretches warehouses to breaking point, and as many are operating below capacity, anything that can be done to spread sales over a longer period will help to alleviate the kind of pressure that risks seeing the whole system fall over (and subsequent consumer dissatisfaction).
Indeed, the fortunes of retailers in the run-up to Christmas can depend to a large degree on getting the supply chain right. Ensuring stock is where it needs to be, keeping shelves full and maintaining a smooth flow of online order fulfilment can make a big difference to performance – either way. We caught up with The Entertainer’s Gary Grant and CEO Mark Campbell this week, to talk about its trial partnership with Tesco. I won’t give away too many spoilers, as it will be a fantastic article once it has been pulled together – but I now understand far better where The Entertainer believes it can add major value and grow toy sales in Tesco, which would in turn grow toy market sales as a whole. Think of it this way – with The Entertainer taking care of deliveries to each store via its own lorries, and handling all day to day stock, merchandising and pricing decisions, ensuring shelves are kept fully stocked the whole time (something a hard-pressed Tesco store manager probably struggles to do with the huge food & drink workload over November and December), the size of the prize across peak season alone offers a great opportunity for both parties to grow sales. The Entertainer is certainly throwing itself into the partnership – right the way up to Gary, who took us to see the new Entertainer-branded aisles of his local Tesco where he quickly turned into the most high-profile retail merchandiser in the toy market!
Having seen its shares fall by 20% after it warned of weaker Christmas sales last week, Amazon will be banking on Black Friday delivering a big boost. The Amazon CEO was quoted as saying: “What won’t change is our maniacal focus on the customer experience”, although maybe they have replaced him with an algorithm, as I can’t think of a single human being who would use the word ‘maniacal’ in that context. Black Friday will be a good test of whether the consumer has fallen out of love with Amazon slightly; the deals will surely be tempting, but how many consumers feel that online ordering – with all the extra cardboard and a gargantuan fleet of white vans – is at odds with their beliefs about the planet and the environment. And in a time of financial crisis, firms who may be perceived by some as not to be paying their fair share of tax might also conceivably be at risk of losing business.
Sainsbury’s is also facing a crucial few weeks’ trading; the retailer released its half-year results this week, which saw non-food sales fall by 6% across the group, along with the confirmation that it expects to close around 50 Argos stores this year, with around 25 Argos sites set to open within larger Sainsbury’s shops. In the past, Argos tended to come into its own at Christmas, and while other toy retailers won’t be shedding any tears at its current tribulations, the toy market as a whole needs its strongest players to be doing well. Sainsbury’s chief executive Simon Roberts remains bullish, claiming: “Argos is performing well in a market where customers are looking for reassurance that they are getting great value and availability.” Many toy suppliers will be hoping he is right.
Finally, the November issue of Toy World landed on desks and online this week – over 1000 people have already read the digital edition online in just three days, illustrating the importance of a dual print and digital approach. We turn our attention to the Q1 trade shows in our forthcoming editions, with Nuremberg (December & January), London Toy Fair (January) and Spring Fair (February) under the microscope. These issues are filling up fast, so now would be a great time to get in touch to book your ad slots.
