Q4. The Golden Quarter. Silly Season. Yes, it’s that time of the year when the whole toy community is pumped and primed to reap the rewards from the seeds sewn across the first nine months of the year. It’s also a time when emotions run high, and elation can turn to frustration in a heartbeat – and vice versa.
Retailers are jostling for position, eager to make sure they get their share of sales – fair or otherwise. Those of us who have been around the trade a while will be familiar with some of the activity that often goes on at this time of year, especially with regard to price cutting. October half-term is traditionally an early indicator of just how far certain retailers are prepared to go to tempt consumers. The word ‘bloodbath’ sometimes gets thrown around when a few quid is knocked off some prices (perspective, people).
But even in that context, the behaviour of one particular UK retailer this week has really rocked the boat. Half-term half price sales are nothing new. Merchandise is often bought specifically for such a sale – a mix of old lines, overstocks, FOB and general clearance stock which all give retailers scope to shout about huge reductions that are perhaps not quite what they seem to people in the know.
But when the price of current lines – and successful, popular ones at that – is knocked down by as much as 70%…well, that’s a whole different ball game. We’re back in the realm of big-box retailers metaphorically taping £20 notes to products, which some of us experienced decades ago. That’s where Sainsbury’s has taken us this week – with hot lines reduced not once, but in some cases three times over the course of a week (I won’t name the items, as I suspect the companies whose products were slashed in price are as disappointed as other toy retailers were). Big brand names, exclusives, product from movies that haven’t even hit cinemas yet…nothing was off limits. First there was a sale, then a clearance, then a price drop on the clearance.
The upshot was that some very high-profile items that started around £70RRP finished up on sale at £20 – a long way below the cost price, whichever way you look at it. Was Sainsbury’s sat on a mountain of stock? Did someone in the finance team lose their nerve and insist on drastic action? Was it a ploy to attract parents into stores in the hope they would start buying food and wine for the festive season while they were there? Or was it just about boosting market share against competitors?
I don’t have the answers to any of those questions, but what I do know is that other retailers were less than impressed, and I doubt suppliers were exactly thrilled. Gone are the days when certain UK retailers would phone up suppliers to give them the hairdryer treatment (basically, an almighty rollicking, complete with ‘choice’ language) when something like this happened, but I bet there were a few uncomfortable calls this week. We all know what happens next…one retailer goes crazy with price reductions, then others feel that they have no choice but to follow. Carnage ensues.
And amazingly, the pictures I was sent of the sale items showed remarkably well-stocked shelves…make no mistake, these were truly incredible deals, and yet there was still plenty of stock available. Make of that what you will. And with the big industry DreamToys PR showcase taking place in less than two weeks’ time, I hope none of the lines that have made this year’s list were amongst those being hammered. Of course, there is nothing anyone can do to stop things like this from happening– but I suspect I know one retailer which won’t be in the running for Toy Retailer of the Year this time round.
Anyway, rather than dwell on disappointing behaviour, let’s look at some of the more positive things that have happened this week. Mattel’s Q3 results showed a healthy 9% increase, with Barbie and Hot Wheels leading the charge. Hasbro’s results weren’t quite as spectacular, but it was only a few years ago when the roles were reversed – it takes time to turn a company of that magnitude round and the people at the helm strike me as shrewd operators that are very much going in the right direction. Game unveiled its list of festive winners, with a dedicated top toy list for the first-time ever. The retailer is certainly stocking a healthy selection of mainstream toys these days, which is great news for toy suppliers. Amazon has also named its top ten, and it’s nice to see a few different names make the cut, including Toynamics Europe, Learning Resources, Asmodee and Playmobil. Elsewhere, PMI has signed up licensing guru Mark Kingston on an advisory basis – Mark will lead PMI’s Licensing and Business Development function and help develop the company’s growing catalogue of licences – a smart move for both parties.
Meanwhile Norton PR has announced that it will become part of a new communications agency group headed up by Stephen Fourie. Founders Tony Michele Norton will still be involved, although they will start to “step away from day-to-day operations” in the coming months.
I’d also like to call out an incredible initiative that has been set up by Make it Real’s Isaac Wolman, to support children of all faiths in Israel by donating toys to help keep up their spirits during these incredibly difficult times. Isaac is looking for companies in the UK and Israel to support the initiative – you can read all about the scheme and how you can help here.
We also spent time with representatives from the Spielwarenmesse senior management team yesterday; much more to come, as we preview the world’s largest Toy Fair in depth in our December and January issues. For now, don’t forget that the show has moved forward by a day – it will start on Tuesday and end on Saturday – so bear that in mind when booking flights and hotels.
I’ll leave you with this meme: I was going to use it a few weeks ago with the caption “Now tell them the show is moving to New Orleans,” but I think this works just as well…
“Now tell them you’ve knocked it down to £20…”