Understanding The Second Coming Of Fidget Toys

Understanding The Second Coming Of Fidget Toys

At the time of writing (May 2021) Fidget toys are BACK! A quick look at the sales charts on Amazon.com & Amazon.co.uk suggests that Fidget toys are the hot items right now. Amazon.com has 4 Fidget toys in the top 10 best sellers for toys, and for Amazon.co.uk it’s 7 out of 10 of the best sellers.

So, what is driving this massive resurgence of Fidget toys? There are some obvious drivers to consider:

  1. Schools go back – the Playground Effect

The toy business was up overall during the pandemic, but there was a clear shift from kid driven toy purchases to more parentally approved purchases. Science and activity kits, board games and puzzles sales went up, but kid driven categories like collectibles and impulse toys were down. Historically, a massive driver of trends and fads in the toy business has been the viral effect of kids talking to kids in the playground at school or elsewhere. When schools & other activities were locked down and not available, this massive driver for toy sales was shut down. Once lockdowns eased, most notably in the world’s biggest toy market – the USA – then this powerful Playground Effect came back, and Fidget toys came back.

 

  1. Toy Stores re-open

Mass market generalist retailers are less critical for the starting phases of toy trends. They tend to come on board a little later when things go really big. That’s because this type of toy sells due to kids trying them out in toy stores. When toy stores reopened, suddenly there is a specialist retailer focused on getting kids playing with toys, not just shifting boxes out of the door!

 

  1. Locked down kids released to spend their pent-up pocket money

Economists have reported a massive growth in household savings during the pandemic due to lack of opportunities to spend money combined with some feelings of needing to put money away for a rainy day. The same though is likely to have occurred with kids. Whatever birthday money or pocket money they have received has clearly been burning a hole in their pockets, and so in the same way as general consumer spending has increased in those countries which have come out of lockdown, so we should logically expect the same for kids and their pocket money toy purchases.

 

  1. Tactile appeal is everything

Tactile appeal and sensory feedback are massive underlying drivers of successful toys. Children are more responsive to their sense of touch than adults generally speaking. Textures on toys are critical, and one of the recurring product feedback suggestions we give is to add more physical textures to toys to increase tactile appeal. The sense of touch is so stimulated by Fidget toys. The analogy we use with our clients is of that person in a meeting who can’t stop clicking a pen in and out repeatedly…this becomes really annoying for everyone else, but it is so compelling for the person with the pen it is hard to stop. Within that impulse lies the appeal and compulsion for Fidget toys.

 

  1. Innovation in play takes time

First time round the Fidget toy boom came and went so quickly (as is often the case with these things), that there was not a great deal of time for really high-quality product development. Several years later, creative minds have had time to stretch the concept and to work out new compelling executions of the basic idea. So, this time round the bar is set higher in terms of play experience, which hopefully will make the resurgence last longer.

 

Our prediction overall is that Fidget toys will keep coming back time after time, so don’t throw away any tooling or tool plans, because you don’t know how quickly the trend may come back! Every few years or so Yo-Yos make a comeback, as do plenty of retro products. Fidget toys are just one more classic play pattern set to re-emerge every few years in the future!

 

We run a Consultancy business for toy & game companies. We work with major toy & game companies through to start ups and one person bands. For more information on how we help toy & game companies grow their distribution around the world: www.KidsBrandInsight.com/services

For more articles & insights on the toy and games business, sign up here for our free e-newsletter sent straight to your inbox: https://forms.aweber.com/form/54/1325077854.htm

 

 

China’s Decreasing Birth Rate: Less Of A Growth Restrictor Than Might Be Expected?

China’s Decreasing Birth Rate: Less Of A Growth Restrictor Than Might Be Expected?

China just released Census data from the work of 7 million census takers in late 2020. The major highlights of the data are two-fold: Firstly, the overall population growth rate reduced, although this was marginal – from 0.57% between 2000 to 2010 to 0.53% for the period from 2010 to 2020. This in itself is hardly news, because due to the long term one child per family policy which was only relatively recently rescinded, birth rates have been low. Which brings us to the second major finding – only 12 million babies were born in China in 2020, versus 18 million in 2016.

So, it looks clear from this data that China’s population maintains very modest growth primarily through increased life expectancy. Bearing in mind life expectancy in China was a shocking 45 years of age as recently as the 1960s, the country’s current life expectancy of 77 is expected to keep on rising. Based on projections we found this could be into the high 80s by the end of the 21st century.

China is not alone in seeing increased life expectancy and reduced births. This is a problem across many countries in the modern world. China though is not like any country. The meteoric rise of the economy and living standards has been a phenomenon like no other in history. With China poised to become the world’s biggest economy at some point in the not-too-distant future, anything which threatens China’s future economic growth is a threat to the global economy.

More specifically though for the toy business, a hefty drop in the number of children being born means less kids to play with toys. While this may seem on the face of it apocalyptic (it certainly would be in the USA or European toy markets), we have to remember that China’s toy market is still growing and maturing, and as living standards and disposable income continue to grow in China, the number of people who can afford to buy toys for children grows, as does the total spend per child in those more affluent families. Think of two graphs going in opposite trends – one moving down (birth rate), and one moving up (disposable income & spend per child). The net result is less catastrophic than the headline birth numbers might suggest.

The second perspective from a demographic point of view is that due to the ticking time bomb of ageing population, China’s government seems likely to need to more effectively incentivise Chinese people to have more children. While we haven’t seen evidence of this to date, it seems likely steps will have to be taken over the next decade to boost the birth rate and to support the economy and demographic balance of society.

One additional point that is important to understand is that the total number of births in China remains is still high versus other countries. While 12 million births in China is a big reduction, it still remains by far the second biggest number of births globally behind only India. To put this in context, for the period from 2015 to 2020, China had 4 times more total births versus the USA. With most international toy companies far from reaching market saturation in China, it seems likely that the total $ market value of China’s toy business will still grow over the next decade, albeit at a reduced rate due to the decreased birth rate.

We run a Consultancy business for toy & game companies. We work with major toy & game companies through to start ups and one person bands. For more information on how we help toy & game companies grow their distribution around the world: www.KidsBrandInsight.com/services

For more articles & insights on the toy and games business, sign up here for our free e-newsletter sent straight to your inbox: https://forms.aweber.com/form/54/1325077854.htm

 

Cinema’s Are Back: Good News For The Toy Business?

Cinema’s Are Back: Good News For The Toy Business?

After some dark days in the last year or two through the covid pandemic, cinemas are slowly but surely making a comeback. In the UK, Odeon cinemas has announced a full reopening across its estate on 17th May (2021). Over in the good ol’ U. S. of A., AMC movie theaters are close to fully open, with more than 7 million visitors reported in Q1 202, albeit with more limited seating capacity due to social distancing measures, but nevertheless it looks like movies are back.

The immediate challenges abound of course. Firstly, amending the business model to deal with significantly fewer customers per screening will not be easy. Also, and perhaps more fundamentally, due to movie release slates being all over the place, these movie theatres will be desperate for as many big releases to come through as soon as possible in 2021. At the time of writing, Godzilla vs Kong is the major toyetic movie showing. Just over a month from opening, and box office figures are obviously far lower than we might have expected pre pandemic, but nevertheless are surprisingly good in the circumstances. US box office takings so far are c. $90m USD, which is fairly modest, but including international, total global takings are over $400m USD. Intriguingly, China accounts for c. $185m of this global total, which is more evidence of the growing commercial presence of China in the entertainment business.

We can expect that with movie releases so disrupted that whichever movies come out in the first half of 2021 may stick around until well into the 2nd half of the year. There is plenty of content backed up though, so with China seemingly in control of the covid situation, and with the USA & UK well ahead of the game on vaccinations, we should see some degree of normality heading into the back end of 2021.

For the first time ever, the previously unthinkable situation of simultaneous release of movies in cinemas and for home viewing is obviously a challenge for movie theatre chains looking to bounce back, but for the toy business it offers both increased security and also incremental opportunity versus how things were in the past.

The challenge for anyone with a master toy license for a major movie in 2020 was the lockdowns and uncertainty, alongside lack of distribution. In 2021, while circumstances remain far from ideal, the reopening of cinemas alongside simultaneous direct to home viewing should see licensed toys regain market share in 2021 and heading into 2022 with all major studios having content backed up, at least in the short term, things look more promising going forward than they have at any time in the last 12 months.

 

Have you listened to our PLAYING AT BUSINESS podcast? We analyse key areas of the toy and game business, we interview leading people in the business and we discuss major trends and changes across toys & games. You can listen to numerous episodes here: https://playingatbusiness.libsyn.com/

For more articles & insights on the toy and games business, sign up here for our free e-newsletter sent straight to your inbox: https://forms.aweber.com/form/54/1325077854.htm

 

The U.S.A. 2020 Census Results Have Been Released: Growth Opportunities Ahead For Toy Companies

The U.S.A. 2020 Census Results Have Been Released: Growth Opportunities Ahead For Toy Companies

The results from the 2020 Census in the USA have been released. Aside from changes in the balance of political representatives from state to state, the headline result is that the U.S. population grew from 308.7million in 2010 to 331.4million in 2020.

So, what does that mean for the toy industry? Well, although the population growth was the slowest since The Great Depression, the reality is that more people means a bigger economy in general, and more specifically more people to buy toys & other gifts. Now for sure the demographic structure of population in terms of birth rates and increased life expectancy doesn’t guarantee that a bigger population automatically equals more children. However, what it absolutely guarantees is more people, and people tend to have families, including kids. Maybe there will be more grandparents living longer, acting as secondary purchaser of toys for a child for longer on average. Maybe it is more Aunties and Uncles, or maybe it’s more young adults set to become professionals. The bottom line though is that in 2020 there were more than 20m additional human beings in the U.S.A. versus 2010, and there is no way that can act as an inhibitor to toy sales.

The bottom line is that the U.S. population looks set to continue to grow over time, albeit perhaps at a slower rate than seen previously, and this cannot fail to be at least a moderate growth driver for the toy & game business.

 

Do you need help to grow sales for your toy company? We help people from all around the world to sell more toys, both in their home markets and into export markets. For more information on how we do this, check out our services here: www.KidsBrandInsight.com/services

 

Have you listened to our Playing At Business podcast? We talk about selling toys & games, interview successful people from across the toy business & we look at key trends in the toy & game business: https://playingatbusiness.libsyn.com/

 

 

Why Losing The Disney Princess Doll Rights May Have Been The Best Possible Thing For Mattel

Why Losing The Disney Princess Doll Rights May Have Been The Best Possible Thing For Mattel

When Disney awarded the Disney Princess Doll rights to Hasbro back in 2014, it was seen by many people in the toy business as a major loss for Mattel. This company which was so synonymous with toy dolls had lost one of the biggest opportunities in that category.

But retrospectively, this loss of the Disney Princess Doll rights may have been the best thing that has happened to Mattel in recent years. At the time of writing, Mattel just released Q1 2021 results, and they are really good, with Doll sales highlighted as driving a significant portion of the year-on-year growth.

If we look back to 2014, Barbie was somewhat in the doldrums, and Mattel had arguably been slow to adapt the Barbie brand and iconic look of the Dolls to the social media era, whereby inclusiveness rules if you want to get social media support and avoid backlash. Looking at Barbie in 2021 versus 2014 is like looking at the same brand decades apart, the updating of Barbie for the kids and parents of today and the world they live in has been nothing short of brilliant.

Only those within Mattel will know whether needing to put so many creative and development resources into the Disney Princess product lines took away focus from Barbie, but what we can say is that since the loss of those rights, while Mattel may have lost a reported $500m sales opportunity, they seem to have benefited with topline sales growth for Barbie, greater profitability on those sales and therefore increased brand equity.

 

Do you need help to grow sales for your toy company? We help people from all around the world to sell more toys, both in their home markets and into export markets. For more information on how we do this, check out our services here: www.KidsBrandInsight.com/services

 

Have you listened to our Playing At Business podcast? We talk about selling toys & games, interview successful people from across the toy business & we look at key trends in the toy & game business: https://playingatbusiness.libsyn.com/

 

 

Massive Retail Store Closures To Follow The End Of The Pandemic?

Massive Retail Store Closures To Follow The End Of The Pandemic?

There have been a number of reports in the media about impending store closures on a massive scale after the pandemic dissipates. Check out www.RetailDetail.Eu for example, they highlight a worse case scenario where the U.S. loses 150,000 retail stores, Germany loses 80,000 and the UK having already announced the loss of 15,000 stores.

These seemingly apocalyptic figures may prove to be right, or they may turn out to be exaggerated, but what is clear is that the pandemic has (probably permanently) changed shopping habits. For some countries where technology was already a massive driver for retail (like China for instance) the pandemic is likely to have less impact, but for most major western markets the outcome of these crazy times is likely to be a permanent acceleration in the shift to online/mobile shopping.

With national lockdown recently easing in our home market of the UK, we took a look around retail and found things to be pretty desperate overall. A quick trip around the shopping area in the centre of Shrewsbury in the UK suggests at least 25% of stores (of any category not just toys) have not reopened following a 3-month national lockdown.

The reality though is that while retail in general seems likely to see store closures, the toy business is booming in comparison with other retail sectors, and once physical retail becomes a routinely available option once again post pandemic why wouldn’t it remain viable? The world around toy stores may be set for massive change, and all remaining toy stores must have already embraced a physical/digital hybrid model to still be trading, but when you take a look at toy store chains around the world, they have a better chance than many other categories of retail because toy sales have boomed during the pandemic, and we all know the underlying drivers suggest there is unlikely to be a catastrophic drop in demand.

Those who have been in the toy business a while know that there has never been a time when toy retail has been easy. It is supremely competitive and has been for all of living memory. While high streets and shopping malls around the world may have to deal with a significant change from retail to entertainment and dining/coffee outlets, at this stage it is hard to see physical toy retail disappearing en masse.

Our recent interview with Rick Derr of Learning Express toys for our Playing At Business podcast suggests that physical retailers can thrive if they adapt & learn new ways to compete and play the game. Check out that interview here:

https://playingatbusiness.libsyn.com/running-a-successful-toy-business-with-rick-derr

While we’re all waiting to see what the world will look like post pandemic, we can at least take heart from the reopening of specialist toy stores in various markets. This week we visited a Smyths Toy store in the UK, and found it to be impeccably merchandised, full of happy families and full of must have toy products. It was a truly joyous experience, and that type of joy will not drift away after the pandemic. Toy retail will remain tough but nevertheless, there are significant reasons why there is still a place for toy stores going forward, for which we should be thankful.

 

Do you need help to grow sales for your toy company? We help people from all around the world to sell more toys, both in their home markets and into export markets. For more information on how we do this, check out our services here: www.KidsBrandInsight.com/services

 

Have you listened to our Playing At Business podcast? We talk about selling toys & games, interview successful people from across the toy business & we look at key trends in the toy & game business: https://playingatbusiness.libsyn.com/

Augmented Reality & the Toy Business: Opportunities Ahead

Augmented Reality & the Toy Business: Opportunities & Limitations

Augmented reality has been around for quite a while, dating back to at least the late 1980s in a technically limited format of course. The best-known iteration of augmented reality in the world of kids and entertainment is of course Pokémon Go, with more than 1 billion downloads. During the peak of Pokémon Go, people around the world were randomly wandering around trying to find Pokémon characters. There are many theories about why this iconic A.R. experience became so popular, but the combination of a highly collectable set of characters and ‘secret’ characters spread about the real world which nobody else can see were clearly completely compelling.

Obviously, sales of Pokémon toys & games, especially the collectable card game, soared alongside the success of Pokémon Go, yet augmented reality remains only an occasional feature/add on for toys. Why is that then, and where do the opportunities lie with this technology?

Looking back to Skylanders which between 2011 and 2016 was phenomenally successful in terms of integrating toys and interactive play experiences (albeit via different technology) it is abundantly clear that merging toys and interactivity together can be very compelling. The challenge though with Skylanders was that the game format relied on a fully developed video game experience which is a $multi-million development cost way beyond the reach of 99% of toy companies, and those toy companies who could afford it were themselves badly burned by failed explorations into the world of video games.

Where augmented reality toys offer much broader opportunity is in the far cheaper development costs. Whereas a full video game development budget would be $millions or even tens of millions, an augmented reality app & integration for toys is likely to cost thousands. When you consider the cost of tooling on a toy product line can be $tens of thousands for even something fairly simple, and when you consider marketing budgets of 5-15% of sales value, it is perfectly clear to see that augmented reality can be implemented with toys easily either via the product development or marketing budget. Why then don’t more toy companies use augmented reality in their products?

The toy business is not often quick to adapt. In an industry where many product formats have not really changed over decades, the culture and management ethos of many toy companies is more backward looking than forward compared to many industries today. If you can sell perfectly good quantities of toys without investing in extra funds in interactivity, why wouldn’t you? The answer of course is new opportunity.

Augmented definition: “having been made greater in size or value.”

Adding augmented reality can make some play experiences more compelling, and that in itself should be enough to ensure toy companies at the very least evaluate what A.R. can do for their products.

The reality is that many toy people look at toys with augmented reality as gimmicky, but as with every technology implemented within the toy business the point is to make the play value greater – to augment the experience.

There are some clear areas of opportunities within the toy business from A.R.:

Firstly, the area of ‘edutainment’ is worth considering. While children naturally tend to want to learn, some topics are more interesting than others. Technology which brings stories, scenes, people and things to life can be of serious benefit. For instance, a science kit could have an add on of an augmented reality Albert Einstein, Newton or Edison, but it could also have an A.R. representation of the human body, a map and so much more. This seems to be one of the most promising areas for augmented reality in toys.

One of the most powerful impacts of technology is to bring toys and toy characters to life. Augmented reality can certainly offer a lot in terms of deepening immersion and interaction with particular characters.

Social play experiences i.e. board games can be enhanced by A.R. – Spin Master’s Hedbanz game would be a good example of this. The player might be wearing a pig on their head but add an app with A.R. and suddenly the player also has a massive hilarious pig snout.

There are many opportunities with A.R., and of course the technology is only going to get better, with more wearable tech solutions on the way to offer huge opportunities for play integrations with toys.

This article was inspired by our interview with Wikitude, a leading Augmented Reality company, for our Playing At Business podcast to be released soon.

 

Can we help you better understand how to get ahead in the toy business? We offer a limited number of one-off toy business consultancy calls where we can run through your sales plans, review & feedback on your products, share knowledge & insights on the global toy & games business, as well as share key contacts from across the toy business. If you are interested in this service, find out more here: https://kidsbrandinsight.setmore.com/

Have you listened to our Playing At Business podcast? We analyse key product categories in the toy business, discuss key trends and interview amazing people from across the world of toys. To find out more: www.PlayingAtBusiness.com

 

The U.S.A.: How To Enter The Biggest Toy Market In The World

The U.S.A: How To Enter The Biggest Toy Market In The World

The U.S. toy market is unlike any other. Aside from the fact that it is by far the biggest market in the world for toys & games, it is also home to two of the worlds biggest toy & game retailers, as well as thousands of independent ‘Mom & Pop’ specialty stores. Any international company looking to grow export sales has to have a plan of attack for the U.S. toy market, because it is by fear the biggest opportunity they have.

There are many challenges though. Let’s take a look at some of these before we look at solutions:

  1. Geographic size – the U.S. is not just huge as a market, it is also physically huge, making logistics a major challenge – both in terms of internal transit time, but most importantly in terms of cost.
  2. Inaccessible mass market retail – major retailers like Walmart & Target are not keen on adding new suppliers, their metrics are driven by reducing suppliers normally, not adding more.
  3. Legal & tax framework – it is usual to have to adapt to local laws, company structures and tax regimes in entering new markets. The U.S. has some very rigid laws and regulations.
  4. Finding 3rd party distribution can be difficult – there are several reasons for this, but basically there are fewer distributors than in other markets. In many markets it does not make economic sense to tool up toy products for just the home market, so from the very start most non-U.S. companies are thinking about selling for export. In the U.S. however, the size of the market means that product development just for the ‘local’ market is obviously viable – therefore it is easier to justify product development, and so most companies would develop their own products to make much higher margins. As a result, whereas many international companies develop some of their own products & distribute a lot more for other overseas companies, in the U.S. this is less prevalent.

There are more challenges of course, but there are enough listed above for consideration.

The question then is how to get to market in this massive but challenging market? When we look at distribution options there are actually a limited number. Here they are (listed in order of least risk/least work):

  1. Distributor model – while there are fewer distributors in the U.S. than in many other markets, there are still a few really good (and some very average) distributors. The obvious advantages of the distributor model are that they take the stock risk, and pretty much do all the work. The primary risk is that they do a bad job with your products and sully the biggest market for you going forward.

 

  1. Sales rep model – due to the size of the U.S. landmass, the sales rep model is most common. Often reps will cover a couple of states, and so a network of sales reps, or a national sales rep company can give you access to an ongoing raft of purchase orders from retail with minimal leg work & staff overheads on your behalf. The challenge is that some reps are better than others, and if you have a product which is not an easy sell, they are likely to push harder on easier to sell products as they don’t get paid unless they sell something. And of course you still have to process and fulfil the orders, take responsibility for marketing and anything else not involved in the sales process.

 

  1. Direct to retail – some companies resent paying rep commissions and seek to sell direct from the start. This is a hard but perhaps ultimately rewarding path. For most companies we would not necessarily recommend this due to the time needed to set up distribution this way versus instantly accessing existing sales relationships via sales reps.

 

  1. Direct to consumer – this model is not new – mail order and TV shopping have been around for a long time, but the internet has allowed direct to consumer sales models to ramp up considerably. Arguably Amazon as one of the biggest and fastest growing major retailers is as much a direct to consumer selling platform as it is a true retailer in the traditional sense. We see a lot of start up companies or Chinese factories trying to use Amazon but not getting much success – Amazon is a system based on algorithms, and so to be successful you need to know how to best manage the algorithms.

 

So, there are many ways to sell to the U.S. toy market, but each comes with challenges, opportunities and risks. Prudent analysis, and above all choosing the right distribution model is required to achieve sustainable success.

 

Do you need help to grow sales for your toy company? We help people from all around the world to sell more toys, both in their home markets and into export markets. For more information on how we do this, check out our services here: www.KidsBrandInsight.com/services

 

Have you listened to our Playing At Business podcast? We talk about selling toys & games, interview successful people from across the toy business & we look at key trends in the toy & game business: https://playingatbusiness.libsyn.com/

 

 

 

How To Sell Toys

How To Sell Toys

For some people selling comes naturally. For others it takes hard work to develop the right skills and attributes. Effective salespeople in the toy business tend to be persuasive, not easily discouraged, are normally great networkers, tough enough to manage the hard commercial situations and tough buyers you find out there in the cutthroat world of retail and last but not least, are normally excellent at distilling down product benefits and points of difference/advantage to a quick sentence or two.

These attributes can be learnt or adopted with practise by nearly anyone. After that there a number of simple tactics which tend to help to sell more toys in an industry where there are often literally tens of thousands of competitive products to pitch against:

  1. Don’t be just another salesperson doing just another sales pitch

Unless you have the biggest most iconic toy brands, or unless your marketing spend is huge, you really don’t want to be just another salesperson doing a ‘same, same’ sales presentation. Think of it this way the buyer probably has at least dozens, if not 100 plus salespeople trying to contact them in some instances. You have got to be exceptional if you want your company and your products to get exceptional attention and action i.e. more listings for your products.

  1. Find a way to be not just another product

Retail buyers routinely review tens of thousands of products every buying cycle. Unless you have the biggest most iconic toy brands, or unless your marketing spend is huge, you really don’t want to be just another product, because many more products are not selected versus those which are chosen. There are a number of ways you can try to be not just another product – start with your competitive positioning/differentiation analysis, how is your product different or better versus all the competition? How will your products deliver a better experience for consumers? How is your product more likely to sell off the shelf/e-commerce platform versus all the others? Can you use narrative & story telling to make your product seem special, like it has huge momentum and potential? If you can’t you had better have all the attributes of a good salesperson listed in the opening paragraph above, because you’ve got a tough gig!

  1. Get the buyer to tell you why not if they won’t take your products

Experienced sales people are used to the bubble of preview season, whereby buyers tend to react positively to your products, because after all they probably are good. But then when the buyers go back to their office, something happens to dampen their enthusiasm, and you don’t end up with quite as good a set of results as you expected from the positive vibes you received. This is because the job of the buyer is to distil and dismiss products down from potentially many thousands to a more limited selection driven by shelf space/focus & other metrics. Sometimes you have good products but they just don’t make the cut. But the key is to get as much feedback as possible as to why your products were rejected in the end. Because this shows you a). where the buyer’s preferences are for future reference/exploitation b). gives you insights from expert eyes on why your products are not stacking up above your competitors c). if the buyer tells you what they are looking for, and you come back with what they asked for, there is much more chance they will take the product.

  1. Use social proof – demonstrate your success elsewhere

The concept of social proof is based on the premise that people often don’t want to be first to do something, but they will often follow the crowd when others are doing the same thing. For instance, one of our team tells a story of presenting a new product to a well-known retailer, and the buyer’s feedback being “If our competitors take the product, we will”. In many ways online reviews are the ultimate in social proof, but the same principles sometimes apply to toy buyers. The principle of social proof also applies to selling to distributors, often people don’t want to be the first person to sell your products, but if you can show them a track record of success in other countries it will help to persuade them.

  1. Be relentless in your follow up (in a non-annoying way)

The buyer is not necessarily ignoring you, it’s just that you are one of many trying to speak to them, aside from the many (often pointless!) internal meetings they will be taking part in. Here’s the reality of selling to retail buyers – unless you are a major supplier like Hasbro or Lego, whose sales teams will probably be communicating with the buying team frequently – you will actually not get much interaction or time with the buyer. You may get to present your products just once, or if you are lucky, maybe twice, and on that minimal contact your entire year’s success or failure may depend. You may even get to talk to the buyer on the phone once or twice, but you will be lucky if you get any more interaction than that. So, if you need to speak to the buyer, you need to be relentlessly persistent (in a non-annoying way) to get some of their time instead of the dozens of other smaller suppliers trying to grab some of their time. They aren’t being deliberately rude, it isn’t because they don’t like you or your products, and it isn’t some kind of conspiracy to keep you out of the toy business! It is just hard to give you much time due to the nature of the toy business, the many products and many suppliers. So, the bottom line is to be successful you need to crack on, not give up and to be relentless in a way which does not come across as annoying, psychopathic or unprofessional.

 

Do you need help to grow sales for your toy company? We help people from all around the world to sell more toys, both in their home markets and into export markets. For more information on how we do this, check out our services here: www.KidsBrandInsight.com/services

 

Have you listened to our Playing At Business podcast? We talk about selling toys & games, interview successful people from across the toy business & we look at key trends in the toy & game business: https://playingatbusiness.libsyn.com/

Ongoing Global Chip Shortage: Analysing The Effect On The Global Toy Business

 

Ongoing Global Chip Shortage: Analysing The Effect On The Global Toy Business

There is currently a major global shortage of chips required to make high end electronic items. Major consumer electronic companies are struggling to supply to demand due to the shortage – for instance, Samsung are reportedly reviewing their new phone launch plans, new gaming consoles from both Sony and Xbox are also badly impacted. Analysts are suggesting that this shortage is going to persist at least through 2021, and most probably into 2022. New chip factories are probably on the way partly due to rising demand, but also due to geopolitical security concerns – so much depends on the supply of silicon chips these days that any supply issue can quickly become a national security issue. New factories though take up to 2 years to build, set up and ramp up, so there is no immediate solution on the horizon.

The reasons for this shortage are classic supply & demand, and don’t really concern us here. What we are interested in though is the impact of the chip shortage on the toy business. Here’s our analysis on this:

  1. Console & games sales will be negatively impacted – historically speaking, new console launches nearly always negatively impact the toy business as consumer spending is diverted to pay for new consoles and then typically an extensive array of games. When supply is restricted on or around a new launch three things tend to happen a). immediate and ongoing spending go elsewhere and often don’t come back b). pricing goes up to sometimes ridiculous levels pricing many families out c). game developers don’t buy into the new platform to the degree they would have if supply were plentiful – because video games development costs a lot of money, and every new version costs even more. Now the reality is that major gams developers will still have to develop and launch games for new consoles, but they will tend to need to pair back spending if the instal base of the console is not that high. The bottom line on all of this is that whereas new console launches normally herald negative sales impact on the toy business, the chip shortage should significantly reduce that impact.

 

  1. A limited number of top end electronic toy products will also suffer supply issues – thankfully the vast majority of toys sold have no electronic components, and even fewer feature the chips which are now in short supply. This may hamper some companies more than others and may lead to the postponement of some upcoming new launches at the high end of the toy market. One of the issues for toy companies affected is the lack of leverage versus the major consumer electronics companies whose volumes and spend are so much greater, and who will therefore be more able to secure available supply.

 

  1. Tablet & Phone sales will be impacted – any children looking to get a new phone or tablet will find that supply is not as strong as it normally would be, which generally speaking could be expected to drive up pricing. Again, without going into all the details of how phones are made and the important role that chips play, the bottom line is that of supply of these high-end gadgets is restricted that should act to increase demand for top end, higher price point toys.

 

So overall it is hard to see how the global chip shortage can be a bad thing for the toy business in 2021 overall. There may well be some repressed demand for consumer electronics heading into 2022, and that could act as a drag on toy sales, but for now, the situation seems to be a potential positive for the toy industry in 2021.

 

Can we help you better understand how to get ahead in the toy business? We offer a limited number of one-off toy business consultancy calls where we can run through your sales plans, review & feedback on your products, share knowledge & insights on the global toy & games business, as well as share key contacts from across the toy business. If you are interested in this service, find out more here: https://kidsbrandinsight.setmore.com/

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