As we head into the final stretch, the industry remains laser-focused on getting the most out of the festive season (or just on making it to the end of the year, depending on your perspective). Black Friday weekend has come and gone, and typical of this unpredictable year, the results were decidedly mixed. There is a general feeling that High Street footfall was up across the country, although some areas clearly fared better than others: London was apparently heaving last weekend, but I have read posts from retailers in the provinces saying they were mildly disappointed with store traffic. Our local high streets in Hertfordshire reflected the inconsistency: last Friday was packed in town, but the weekend seemed markedly quieter.
I have also read reports that even though footfall was up, sales declined slightly – perhaps people went in search of incredible offers that they didn’t find, or maybe they are just being more careful with their spending this year. There’s no doubt that Black Friday has become an integral part of the UK retail landscape, but I wonder if consumer expectations of offers are unreasonably high? Because make no mistake, some of the deals flying around on toys really are quite amazing, and they should have been more than enough to drive sales.
Sainsbury’s Argos was one of the retailers quoted as enjoying strong Black Friday sales on toys, although tellingly it singled out sales of Lego and Duplo – and anyone who has entered a large Sainsbury’s store over the past couple of weeks will have noticed a rather swish Lego branded FSDU prominently placed at the store entrance, offering 33% off all the products on the unit. Given Lego’s average margin, that’s quite a generous offer, so perhaps no great surprise that it had the desired effect – I just hope everyone made some money from the increased sales.
As the week went on, Argos was back in the spotlight after sending out an email to customers promising “up to 70% off toys.” I clicked on the list and, as if to reinforce my previous point, the offers were certainly incredibly generous. It didn’t take long for other retailers to start sharing their thoughts online, with Midco’s Dave Middleton perhaps summing up what the majority of toy retailers were thinking: “Go home Argos…you’re drunk.”
It’s a tough one for me to comment on, as I don’t know what sort of internal pressure the toy team are under from buying or finance directors. I think we have to assume that they must have a lot of stock to shift. Interestingly, at Toy Fair last year, I had a really good chat with one of the Argos buyers, who took the time to explain to me how the Argos business had changed since its heyday – it gave me a new way of thinking about the business, which at the time seemed entirely logical. Maybe I had still been thinking about the Argos of the past, the retailer that placed big bets and had the legendary catalogue to drive sales. A retailer that was historically more focused on volume and market share than profit. The new Argos, I was told, is quite the opposite; happy to work on lower volumes but crucially making a profit in the process.
So, what happened? Did they place orders that were too big for the new business to drive? After all, with no catalogue and a small space tucked up at the back of Sainsbury’s stores, they don’t have the same ability to drive sales as other physical retailers who display stock. Did suppliers receive big orders and think “wahey, Argos is back baby”, rather than wondering if the numbers were realistic, and whether they should actually ship the numbers requested? Or is it just that consumer demand hasn’t materialized to the anticipated level?
No-one is pretending it is easy out there, and the UK isn’t alone – the fact that specialist Canadian retailer Mastermind Toys filed for creditor protection last week vividly illustrates that. And I gather that UK retailers are already starting to play the game of pointing the finger at each other in terms of who is responsible for slashing prices first. However, although it’s a challenging economic environment, it’s also worth bearing in mind that there are no big new console launches to suck money out of the toy pot this year – that really should be working in our favour.
So, what can be done to stimulate consumer interest in the final weeks? For starters, don’t underestimate the power TV still has to bring product to the attention of the masses – as is evidenced by the impact of Ireland’s phenomenal Late Late Toy Show, which broadcast last Friday. Suppliers saw an immediate impact on sales and online searches, after 1.7m people tuned in to watch the show. Why we don’t have a UK equivalent is completely beyond me – surely that’s a gap for some enterprising broadcaster to exploit? And our highest-read story of the week – the relaunch of the Master Replicas Doctor Who statue range – was surely the result of consumer interest driven by the return of the show last week. It was an encouraging first episode, a return to form for a show that had arguably lost its way in recent years. It went back to what it did well, and I suspect that will work in its favour. Maybe a lesson there…?
Finally, the December issue of Toy World has been landing on desks this week and is available to read online. It’s our final issue of the year – and nice to know that we made it right through the year with every issue published bang on time. Now it’s full steam ahead for our bumper (and I do mean BUMPER) January issue. As always, we’re going to start the year off with an almighty bang. If you want to make the most out of Toy Fair Season, don’t miss out. In fact, we’re so busy that we’ve taken on not one but two new editorial recruits to help us out – so please give a warm toy trade welcome to Caroline Tonks and Gabriela Jimenez Garcia as they join this wonderful, crazy industry. After more than 40 years, I’m still happy to embrace the craziness…