Those Blog readers who know me personally will hopefully appreciate that I am generally a ‘glass half full’ kind of person, especially when it comes to the fortunes of the toy trade. This year has definitely tested my positivity at times, but I still believe that we have everything to play for over the next five weeks.
I am not going to dwell on the case for the prosecution – if you’ve been watching the news or reading newspapers/social media, you’ll be well-acquainted with the economic backdrop that every UK business is currently facing. This week’s budget statement did its best to kick the can of pain down the road and obfuscate as best it could, but I suspect most people will appreciate its realistic medium and long-term implications.
Nevertheless, there are still some mitigating factors in the toy industry’s favour, even when assessing Q4 against last year. It is worth remembering that the last six weeks’ trading in 2021 was hardly spectacular: many consumers bought early, spooked by reports of mass product shortages caused by last year’s calamitous supply chain problems. Those logistics challenges have eased significantly this year – indeed, some of the container prices I have seen this week look like real bargains, albeit very late in the day.
The other major contributor to a lacklustre festive season last year was the steep rise in Covid cases in November and December, causing many people to stay at home. Mercifully, that also doesn’t seem to be a factor this time round.
So, yes, September and October weren’t great this year – but October half-term saw sales pick-up, and hopefully that momentum has carried on in November. With five weeks still to go, if that momentum continues, it is still possible to make up for the slow start to the season.
Black Friday will be an important opportunity for all retailers. And those retailers who have been expanding their store estates recently will hopefully reap the benefit; Alan Simpson told me at DreamToys that Toytown’s new Coventry store was his top-performing outlet within weeks of opening, while the new Hamleys store in Westfield opens today. I am hoping to get down to see it in person very soon, but I have heard very good things from some of the suppliers who have been working with Hamleys to make the new branch a real experience for customers. I am sure Hamleys would have liked the store to be open a few weeks ago, but by all accounts it has been transformed from an empty shell to a vibrant, exciting destination within the past couple of weeks.
NPD released some very interesting findings this week, some of which may have challenged a few preconceptions. Looking at consumer spending habits in recent months, the drop in sales of items over £50 was fairly predictable. However, with some consumers switching to items in the £20-£49.99 range, it could be the case that they are purchasing multiple presents rather than one big ticket item. At the other end of the scale, perhaps counter-intuitively, toys under £10 have been hit harder than just about every other price band. Are parents finally pushing back on pester power, is it a case of consumers making fewer impulse purchases (potentially easier to cut out than main gifts for birthdays and Christmas) or are they deciding to cutback on stocking fillers to allow them to at least give their kids the main present on their list? It’s probably a combination of all of the above, but at least consumers are adapting their spending habits rather than cutting out spend completely. How many industries dealing in higher priced goods and experiences (cars, TVs, holidays etc) have seen consumers simply drop away, rather than change their spending plans? So, I’m doing my best to stay positive and hope that the last five weeks succeeds in turning things round a bit.
Of course, while everyone is fixated with what’s happening out at retail, the toy community also has an eye on the January Toy Fair season. The organisers of the Spielwarenmesse came over to London this week, as part of their global communication campaign to make sure everyone knows what’s happening with next year’s show. There is plenty of positive news for them to share: first and foremost, the show is definitely going to take place in 2023 – there absolutely won’t be any repeat of the last-minute cancellation of this year’s event. 85% of the stand space has already been allocated, and while there may be a few last-minute comings and goings (mainly involving Asian-based companies, I suspect), there is a real sense that everyone involved is excited about the return of the show. A few companies will be switching stands – Hasbro is moving from its traditional home in Hall 12 to a new location on the other side of the showground in Hall 4A – and we were told that some companies will be doing things a bit differently this year, which will no doubt help to keep the event fresh.
Ticket sales for trade visitors opened this week, with day tickets and tickets for the whole event available.
The new Thursday evening Red Night – where stand parties will be taking place across the whole show until 10pm – is a very interesting initiative: offering visitors the chance to network with suppliers in a relaxed setting until 10pm in the evening might well catch on, given the convivial nature of the toy community.
For those of us who have been travelling to Nuremberg for years, I am sure we’ll notice a few changes – the likelihood of fewer Chinese exhibitors and visitors for starters. But some things never change, and the sheer breadth of product on show will, as ever, make it a valuable trip for retailers from across the world. And for UK visitors who haven’t booked their flights yet, a quick tip for you: British Airways is operating a direct flight from Heathrow to Nuremberg, and the price is remarkably reasonable. If you’re quick, we can turn it into a toy flight and get some extra networking in on the way (not on the way back though – let’s be honest, no-one wants to talk to anyone by that stage of the week).
*if you are too young to get this reference, ask a parent / grandparent.
