These are tough times for people across the world as the Covid-19 pandemic wreaks havoc on the global economy and threatens health and happiness regardless of national, religious or ethnic boundaries. The toy and game business is not immune to the current situation either.
While there are clearly some opportunities during these tough times to supply toys and games to families who are looking for ways to entertain and occupy their kids while stuck at home, there are also a number of threats and challenges to our business. Not least of which is the impact on physical retail. The current situation is likely to accelerate the movement to online retail, which has both good and bad implications for toy and games companies. Supply chains are also at risk of disruption for the next few months at least, and so this situation need to be carefully managed.
To try to help toy and games companies get through this period of time in tact and to be ready to go again when the world returns to normal we came up with the following list of tips and tactics:
- CASH IS KING – those businesses and business people who went through the global financial crisis just over a decade ago should have this glib but critically important statement clearly at the forefront. Because when time’s get tough some businesses fail and don’t pay their bills, and those who don’t fail are probably not paying their bills as quickly as they do in normal circumstances. We’re not suggesting massive cutbacks to preserve cash, but toy and games companies should definitely review their expenditure and credit control during this time to maintain cash as much as is feasibly possible.
- OPPORTUNITY ABOUNDS – there are countless toy and game companies that actually made great strides through the global financial crisis. Survival of the fittest applies during these times, but if you are one of the fittest you should be able to ride this out and end up stronger. In particular though, with large amounts of families housebound there has been and should continue to be an upsurge in demand for our products at this time. For sure we can and should be supplying free online materials for families to help them through this time, but we also have a moral imperative to ensure our businesses do well to preserve jobs and employment to reduce economic damage coming out of this horrendous pandemic! There should be no question of under selling or giving away the shop, the world needs what we do, and the more of us who are still in business throughout this time and when the pandemic is finally over the better that is for the world. JFK was quoted as stating that the Chinese characters for ‘Crisis’ contains two parts – one meaning danger and one meaning opportunity. The reality is that while the toy and game business is going to see change and disruption, there is significant demand right now, so we need to adapt to the current reality to take advantage of the opportunity and come through this stronger.
- MANAGING SUPPLY CHAIN DISRUPTION – 2020 has already seen significant supply chain disruption with large parts of China effectively locked down and delays in factories getting back up and running in China. Now other manufacturing hubs are seeing lockdowns and delays. Our understanding from reading and listening to various medical health and virological experts is that after an initial lockdown period of a few months, things are likely to go back to a new normal of people being free to work and go out again, but with a few more restrictions than they may be used to. At that point we may get some resurgences from the virus up and until we see a mass produced vaccine which works deployed across the globe. Therefore, we expect some continued supply chain disruption, and recommend that diversifying supply chain across multiple geographies is a good thing for both the remainder of the Covid-19 pandemic and afterwards – if you can’t make ’em you can’t sell ’em!
- LOOK AFTER YOUR STAFF – this is a point which should not really need to be made, but your staff need your support right now. We’re all going through quite a traumatic experience, and people handle that in different ways. This is not the time to make panicky cuts in staff levels, this is the time to double down and support and nurture your teams through this crisis, so that at the other end of this what makes you strongest – i.e. your people – will continue to make you stronger post Covid-19. Working from home works better for some people than others. Some of your people are going to struggle with the isolation of being locked down, regular team calls are good for getting work tasks focused on and addressed, but also good to keep people sane in these unprecedented circumstances.
- LOOK AFTER YOUR CUSTOMERS – not all of your customers will make it through this troubling period of time. More of them will with your support though. Maybe a multi-buy or discount will help those struggling with the loss of physical retail sales, maybe just acting like you care will help. Perhaps your online marketing team can be spared to put some work and support into helping them set up or enhance web stores and/or local marketing campaigns.
At this point we don’t know how long the Covid-19 pandemic will go on for. What we do know is that there seems to be a huge degree of certainty that a vaccine will be found and that effective treatments are not far away. In the short term we have a medical disaster on our hands in some localities, but this too will pass. For toy and game companies we need to survive this testing period of time in terms of our own health and well being, but also as businesses.
This article is written for and published by Kids Brand Insight. For more information on Kids Brand Insight and what we do: www.KidsBrandInsight.com
We have run Consultancy and Coaching projects for dozens and dozens of toy and game companies, and are actively and continuously helping companies get through the current difficult times.