One of the major advantages of spending almost four decades working in a specific industry is that you build up long-term relationships with a host of well-connected people, which allows you to keep in touch with what’s really going on in your market. To be a successful journalist, good contacts are essential; otherwise you’re relying on official press releases which often only tell part of the story – and in the case of some developments, often try to avoid the story completely.
So, it does make me laugh when I read a claim that that the “grapevine is unreliable” – take a look at what the grapevine has revealed to me this week and, like me, I suspect you too will have a laugh at such a misguided statement.
Let’s start with Amazon, shall we? I have it on very good authority that someone representing the e-tailer – who was allegedly calling from Lithuania, presumably the true epicentre of the Amazon operation – has been contacting UK toy suppliers with a tempting proposition. Essentially, they are being asked to sign up to what have been described as “horrendous” new terms (effectively doubling their current financial obligation), with the threat that Amazon will stop raising orders if they don’t submit. Described bluntly by several suppliers as “bullying”, it does appear to be a conscious attempt at reducing the number of vendors, particularly those whose turnover is under the £5m required to qualify for a vendor manager. The suggestion is that pressure is being applied to ‘encourage’ suppliers to move from the vendor central to the seller central programme. Of course, the advantages of this to Amazon are clear; no risk with stock and also an easy way of obviating responsibility for safety issues and counterfeits.
Another major problem suppliers have increasingly found with Amazon is trans-shipping – Amazon’s predilection for buying goods from the cheapest supplier in Europe, regardless of whether or not it has a relationship with the official UK distributor. One supplier told me this week that Amazon had even charged him for promotional activity on a particular line, despite the fact that the stock of the item in question was being purchased via a completely different European supplier. One of the very few upsides of Brexit could be to throw a spanner in the works of this onerous practice.
Contrast these ‘reliable’ snippets (from impeccable sources) with the rumours picked up by many national media outlets which suggested that Amazon could be set to acquire Morrisons – a story which has all the hallmarks of idle speculation dreamt up over a particularly boozy Christmas lunch, or by an analyst looking to boost its profile and notoriety.
Over the week, I have also received several tip-offs about major stories about to break; the first was the news that Addo Play had tied up a strategic, multi-year exclusive supply agreement with Toys R Us Canada – a great deal for both parties. Talking to Gary Grant – a major Addo Play shareholder – about the deal, he also confirmed a rumour I’d heard about further international expansion by The Entertainer – namely, that a Spanish judge has awarded the Polygroup retail chain, which fell into administration a few months ago, to The Entertainer. The takeover is just going through the final processes of legal transfer, which should be completed next week, when a formal announcement will be made – but you read it here first. From what I have heard, the Spanish toy market will present a golden opportunity for The Entertainer’s particular brand of specialist toy retailing – I am tempted to say that Spanish toy suppliers won’t know what’s hit them!
I also received advance notice of the latest Which? report, in which the ‘consumer champion’ has returned to the subject of questionable safety standards in slime and putty products. I praised Which? earlier this year, when it exposed the inherent flaws in the Amazon third-part supply chain, which allowed infringing products to slip through the net. However, on this occasion, the attack seems to be on slightly shakier ground. The dispute – which could essentially be filed under the headline ‘semantics anonymous’ –boils down to whether the products in question are slime or putty, as the two categories have markedly different boron safety thresholds: 300mg/kg for slime and 1200mg/kg for putty. One of the offending lines is even called Frootiputti, so that seems to me to be ‘case closed’. The other line – Grossman’s Ghostbusters Slime Putty – is in more of a grey area, if only for the name: maybe they should have called it Ghostbusters Ectoplasm? Nevertheless, reports from independent accredited test laboratories define the product as a putty for testing purposes, so semantics apart, there seems to be no case to answer on a technical level. The fact that Which? will not release its own test findings to either party doesn’t help its cause either. It’s just a shame that Which? chose to release the story now; inevitably, it has been picked up by numerous media outlets, and many consumers will just see the ‘unsafe toy slime’ headline and not even read the story. Hopefully the overall news cycle – dominated by tales of government in-fighting and Brexit turmoil – will bury the story somewhat; I’d hate to see sales of slime suffer over a case of semantics.
Those were just the controversial stories: you can also throw in the news that Toy State’s management team has emerged phoenix-like from the flames, announcing the launch of Nikko Toys. Also Kelly Philp has been appointed as Mattel UK’s new marketing head, while Helen Genia will be taking on the leadership role of the Mattel Consumer Products team in the UK, as well as continuing her role as head of regional hardlines.
And finally, amidst all the media reports of deserted High Streets and lower consumer footfall – how reassuring it was to hear from several toy specialist retailers (both large and small) that sales have really kicked into gear in the past few weeks. By all accounts, after a soft October, November picked up considerably and December has got off to a really strong start. If this pace keeps up for the next few weeks, we might just end the year on a mini-high after all. Frankly, I trust the personal view of those retailers – who, lest we forget, are at the sharp end – more than any number of speculative predictions by ‘ivory tower’ organisations, which are one step removed from the front line.
And there you have it – another fascinating week in the life of the toy trade grapevine. If anyone dismisses it as ‘unreliable’ and suggests it is nothing but idle gossip, I would suggest that person doesn’t understand how the toy market works – and possibly never will.