I have spent this week in London at the Distoy show. For the uninitiated, Distoy gathers together toy distributors from across the globe to preview next year’s ranges and strike distribution deals. However, the show’s audience is gradually broadening out to incorporate retailers, licensors, inventors, media companies, sourcing companies and many others whose businesses are inextricably linked with the toy trade (more on that later).
Attendees come from literally every corner of the globe. Anecdotally, one person suggested that there were more Americans than ever this year; I’m not sure if the visitor stats will bear that out, but it would make sense, as US companies seek to broaden their horizons and increase their options in a post-TRU, pre Chinese-tariff world.
The clandestine nature of Distoy precludes me from talking about specific products, most of which won’t hit the market until at least Spring Summer 2020, or in some cases next Christmas. Heck, we live in a time when some licensing companies are preventing us from featuring products until a few weeks before their consumer release (a complete nightmare for a trade magazine). However, a few general observations from the past few days shouldn’t contravene any draconian embargoes or increase paranoia levels any further, so here goes….
There were plenty of retailers at Distoy this year – not just UK retailers either. Some toy companies see this as a very bad thing, as they are concerned about retailers trying to agree direct exclusive deals with brand owners, cutting out the middle man. I can see their perspective, and it is not helped by some retailers starting to strike exclusive DTR deals with licensing companies. No-one wants to find themselves or their business model surplus to requirements. One supplier even admitted to me that he is becoming increasingly nervous about sending samples to certain retailers, as he worries that there is a chance they could be used as ‘inspiration’ by those retailers’ product development teams. That said, I had just as many companies suggest that not only are they happy for retailers to attend, but they would ideally like to encourage more to do so. They see this as the perfect timing to present Spring Summer ranges to buyers and, with all the samples in one place, the logistics work too. It will be interesting to see how this particular dichotomy develops.
Consolidation was an oft-repeated phrase this week, unsurprising given the acquisition of Carrera by Revell, and the strong rumours circulating in the Spanish press that Giochi Preziosi is about to acquire Famosa – Feber (although apparently the Famosa representatives present were denying this). My suspicion is that there are more similar deals to follow; the toy trade is no place to be right now unless you are fully committed. From a specific UK perspective, consolidation has had an impact on the opportunities for domestic toy companies at Distoy; there are simply less avenues to explore than there used to be. Over the past few years, a number of companies have effectively been removed from the game through mergers, acquisitions or setting up their own UK operations: Just Play, Basic Fun, Moose, Goliath, Play Monster and Skyrocket, to name just a few.
As anticipated, talk of the US introducing tariffs on Chinese-made goods was rife; the general consensus is that Chinese factories are taking the threat seriously, with some allegedly even holding off on ordering components or building up stock levels. If a line takes off suddenly, there is the very real possibility that factories may struggle to react quickly enough to meet demand. Under any circumstances, that can be a problem; but when consumers want new product faster than ever (and are arguably getting bored faster than ever), the last thing anyone needs right now is a significant lag between demand and supply.
What came over loud and clear at Distoy was a continuation of the way the business has been heading over the past couple of years. It’s all about new, new, new. Speed, flexibility and innovation remain key to success. Tweaks, add-ons, extensions and new collections are integral to breathe new life into existing ranges, and to prolong their success. If you just stick with what you have and dally too long, the consumer will have moved on to something else. Licensing is not dead, but it is certainly not in as strong a place as it was a few years back; I saw three or four very strong new licensed ranges this week, but that was about it. I saw far more innovation and trend-driven developments. The first half of the year hasn’t been easy, perhaps exacerbated by a lack of big launches, but a lot of new product will soon be hitting shelves, which should revitalise sales and offer fresh momentum in the second half of the year.
On a personal level, it was great to see both Sinco’s Marc Sivner and Andrew Hardwidge – who has just started his own agency business – at the show, with their respective health scares now well and truly behind them. It was also lovely to hear how many of you enjoy reading the Blog: when we launched eight years ago, we didn’t set out with the explicit aim of establishing an audience across the globe, but I am delighted to hear that what we do is resonating with the international toy community.
Finally, as you might expect, I’ve taken a lot of ribbing over Watford’s Cup Final defeat (although Joe Kissane appears to have taken it harder than I did, being a Man Utd fan), but seriously, how do you compete with a team like that? I could say the same about Creative Toys’ Hugh Evans in our Fantasy Football League, taking his third trophy in four years by a quite staggering 100-point margin. We may have fallen short in Fantasy Football this year, but Toy World retained its title as champions of the Mojo Nation Music Quiz this week, winning for the second year in a row. At this rate, we’re going to need a bigger trophy cabinet – maybe we can borrow Man Utd’s? (Sorry Joe, couldn’t resist). As we edge towards the all-important second half of the year, I hope we will be talking about plenty of other winners over the coming months.