Week 8 of the post-coronavirus world. Anti-bacterial handwash has been renamed ‘liquid gold’ and is changing hands for 20 times its normal price online. Gangs roam the streets in search of toilet paper (armed gangs in Hong Kong). Ex-footballer Matt Le Tissier has been appointed an official expert on virus control. Praying has replaced the application of science in the Oval Office. Meanwhile, here in the UK, The Spectator has written an article asking what all the fuss is about, entirely missing the point (something The Spectator generally does very well).
But then again, what is a proportionate response? The answer seems to change every day. This week has seen the cancellation of numerous trade shows across the globe: Canton Toy Fair, MIPTV in Cannes, Bologna Book Fair, London Book Fair, Paperworld Middle East in Dubai, Shop World in Las Vegas…. all gone. Who will ultimately pay for these costly no-shows, especially the last-minute cancellations? Stand fees will surely have been paid months ago. Insurance companies must be very nervous, although I am not convinced that claims based on pandemics will be honoured.
Other event postponements will no doubt follow, although there is some good news to report – I have been told that the Licensing Expo will go ahead in Las Vegas in May as scheduled. I gather there was a meeting earlier this week to decide whether to proceed, but the decision was taken that ‘the show must go on’ – for now at least. And talking to Miles at AIS, this week’s import show attracted strong attendance numbers – even if one Irish visitor only just managed to make it home on Flybe hours before it grounded all flights after falling into administration.
We’ll do our best to keep everyone up to date with what’s happening via our website and our monthly print issue – speaking of which, our March edition hit desks this week. You can read the digital version here.
Elsewhere, we’ve seen the cancellation of several major sporting events, while even James Bond is not immune, as the release of new movie ‘No Time to Die’ has been postponed from April until November for economic reasons. You’d be hard pushed to find a better metaphor for the current situation than that – even James Bond can’t defeat this particular global threat.
Will any of the impending kids’ / family movie releases suffer the same fate as Mr Bond? One hopes not, and indeed there is no suggestion yet that this is even being considered. But it does illustrate the vulnerability of the toy market to forces way beyond its control. Maybe Mike Pence’s praying strategy isn’t so crazy after all…
Closer to home, speculation is rife that delays to product availability will be unavoidable. The big question is – how long a delay are we looking at? One major retail owner phoned me earlier this week before a press interview, wanting to double check that what he was hearing was accurate and keen to ensure that – as an industry – we present a unified, consistent message to the world (this is sensible: numerous people have mentioned a car crash interview on Radio 4 just before Toy Fair, where, according to the people who heard it, the person ‘representing’ the toy industry doesn’t seem to have done us any favours at all).
However, identifying an accurate, consistent message isn’t that easy right now. Best ‘guesstimates’ on potential delays vary from anything between three and eight weeks – quite a range. Three weeks wouldn’t arguably be too bad, whereas eight weeks would certainly start to have an impact on many businesses across the spectrum.
Consider, too, the potential knock on effects: can it really be true that some Chinese factories are already taking the ‘opportunity’ to renegotiate pricing in the wake of a growing backlog? Will toy companies be prepared to commit to TV and other marketing campaigns while uncertainty surrounds supply dates? And if they are forced to wait, will there still be availability, especially as we get towards Christmas?
Then there is the licensing angle – I have had several licensees raise the question as to whether licensors will be prepared to reduce minimum guarantee commitments or add time to licensing agreements to take prevailing conditions into account. As one licensee commented: “This situation is unprecedented – now we’ll find out which licensors truly believe in the word ‘partnership’.”
But let’s also try to look for some positives: over the coming weeks and months, stock will be king – as one retailer suggested, it may even be the opportunity some suppliers have been waiting for to clear out the stock that has been sitting in the corners of warehouses for a while (providing, of course, they are realistic about its value). And with some range extensions and new series being delayed, it will give suppliers and retailers the chance to tidy up the loose ends by selling through the previous series to leave everyone clean. It also appears likely that some minor collections may be delayed until 2021 to allow factories to concentrate their efforts on key new launches, so a retail focus on established, proven winners and a ‘safety first’ approach to selections seems the most likely scenario. Overall, a feeling is emerging that working thought the challenges collaboratively will give us all the optimum chance of successfully navigating the choppy waters we find ourselves in.
Sadly though, there is always someone that misreads the prevailing public mood: Wilko has shown wilful disregard for these troubling times by deciding to reduce sick pay for its staff rather than increase provision for it. Effectively, the new rules – which come into force on April 1st (but are very far from being a joke) – will mean that if a Wilko employee is ill more than once in a year, they will not be paid beyond the statutory minimum wage of £94 per week. This, in turn, will surely discourage staff from taking time off, even if they suspect they might be ill – I shall certainly be looking for somewhere else to buy my deodorant, printer paper and largely uninspiring own-brand toys in future.
As a great philosopher one said: ““In times of adversity and change, we really discover who we are and what we’re made of.” (Actually, it was Howard Schultz, former CEO of Starbucks, but hey, the sentiment is apposite). Maybe it’s time for some people to wake up and smell the Cappamoccachino: we’re stronger if we work through this together.