How Children Have Changed & What That Means For Toy Companies

How Children Have Changed & What That Means For Toy Companies

INTERVIEWING CHILDREN & FAMILIES ABOUT TOYS

I first encountered the toy industry via market research, I was running focus groups with children about a toy promotion back in the late ‘90s. Since then I have conducted more than 1,400 focus groups with children about toys and seen many brands come and go, and some last the distance. Technology when I entered the toy industry was very ‘clunky’ i.e. slow and temperamental! I still have an interactive Yoda toy from this time which was cutting edge, and it is astounding how loud the movements of the toy are versus today’s slick high-tech toys.

Some of the first children I interviewed back from 1998 onwards are now becoming parents themselves, and this thought encourages reflections on how different is the new generation of today versus those kids of the late 1990’s. Biologically speaking, I doubt there is much difference between children today and 20 years ago. But toys are a cultural indicator, they reflect the times to a degree. And the human world in 2018 has changed quite significantly in the last 20 years.

KEY CHANGES AFFECTING CHILDREN:

The Internet Revolution

The children of the late 1990s were not that likely (yet) to be highly active on the internet, although it was in the early stages of meteoric rise. Fast forward to today and children (like adults) take the internet completely for granted. They have instant access to nearly any information, this has had the effect of creating a hugely impatient modern day generation of children. They are far less likely to take the time to concentrate on highly detailed instructions or frustrating activities. Playthings need to work quickly, instructions need to be very intuitive and flawed products will be almost instantly rejected.

Screen time addiction/reduction in time spent playing off screens – the Playstation generation of the late ‘90s were no strangers to screens, however, the screens were not so portable, not so addictive and the software (remember when apps were called software!) was expensive, so there were usually far fewer games available versus the practically unlimited number of apps available on tablets & phones today. Today’s generation of children are addicted to screen time on a vast scale, and therefore we have a whole generation of addicts who need to put down their ‘fix’ to play with toys. Therefore, there is a challenge for toys to remain relevant to kids.

Screen time backlash from parents – from a parental perspective though, the screen time addiction has created more support/more impetus for playing with toys, as parents use toys as an antidote to excessive screen time. Due to inflation over 20 years, toys today are now usually a throwaway purchase as often as they are a really considered purchase, and so economically they are far more accessible. So, this has led to children having vast collections of toys that they play with far less versus previous generations.

Social Media – mass adoption of social media has significant impact on children today versus the 1990s. The biggest single impact we can point to is unboxing videos, which have both changed the toy launch marketing model but also lead to a new type of product as ‘surprise’ driven products have become the hottest sellers for the last few years. From a content perspective, children’s content viewing has increased, but with a tendency to watch more ‘informal’ content, more driven by self-made personalities. This is an ongoing challenge to the classic toy business model of ‘massive movie = massive toy sales’.

Political correctness/Changes in gender perceptions and stereotyping – social norms have changed significantly since the late 1990s. The biggest change affecting children (in many major Western markets) is the shift in gender stereotypes, which is still underway at the time of writing. The classic stereotypes of boys should be tough & rough and therefore have tough & rough toys, and girls should be gentle & have softer toys have softened significantly. It isn’t necessarily that children have changed innately, but more that the gender roles they are assigned by society have loosened up, at least partly driven by the power of social media to name and shame those companies and institutions which maintained the status quo in this area. There are two harsh commercial realities though that toy companies should consider: 1. Today’s parents were kids primarily in the 1980s and 1990s, so many still carry the old gender roles as their default perspective 2. Reflecting the classic psychology debate of ‘nature versus nurture’ in child development, to the degree that nurture defines gender roles and behaviours, this has clearly changed and will probably continue along this path. However, to the degree that ‘nature’ is important, the traditional play patterns while no longer likely to be labelled as ‘for boys’ or ‘for girls’ are still likely to prevail to a degree.

Different character matrixes – following the social changes of the past two decades, one definite observation I have made is that the character matrix for hit movie, TV & entertainment properties are likely to be quite different in balance/make up versus twenty years ago. For instance, Black Panther’s predominantly Afro-American characters would have been far less likely twenty years ago. This can surely only be a change for the good, but it does perhaps make it harder for toy companies to predict what will work and what won’t.

KIDS ARE STILL KIDS

In summary then, children are fundamentally still children. They may live in a different media landscape, but they still have the same fundamental needs – to develop their sense of the world and themselves, to develop their physical skills, their brains and their relationships with others. For this reason alone, toys are as relevant and as necessary as they have always been, but if the next twenty years sees changes as dynamic as the last twenty years things could get very interesting!

Do you need help to find the right mid to senior level people? We can help…we have been helping people from across the world of Toys, Games & Licensing to find new roles since 2011. Our client list reads like a ‘Who’s Who’ in the industry, think of a Toy company and we have worked with them in some way. Along the way we have met thousands of really talented people who could be your next hire.  Get in touch for more information via the ‘CONTACT’ page if you need help to hire new people, or check out www.ToyRecruitment.com 

It’s Good To Be Different: Why Independent Toy Stores Need To Work To Differentiate Themselves From The Crowd

It’s Good To Be Different: Why Independent Toy Stores Need To Work To Differentiate Themselves From The Crowd

Independent toy stores are often viewed as the lifeblood of the toy business, and rightly so. While generalist retailers can often deliver the greatest sales volume, their commitment to the toy department and their allocation of space are variable dependent on what else is happening and how their business is doing overall. Of course, independent toy stores have no choice but to fill a shop full of toys, and therefore they are the only guaranteed outlet for our products along with toy specialist chains.

The size of the independent distribution channel varies by country – from the vast array of ‘mom & pop’ stores in the USA, through to the one per town in Germany (both markets where independents are rightly high up the pecking order), through to my own home market, the UK, where there are only around 10% of the total independent stores vs USA & Germany. Even in the UK though the independent toy stores have a greater focus and more ‘clout’/attention from toy companies than perhaps the potential sales volume suggests. There is no doubt that toy companies in general highly value & seek to help specialist toy stores & chains achieve advantage/sustainability versus cost cutting generalist retailers.

Independent toy stores of course do need all the help toy companies can offer, as it is hard for independent toy stores to thrive in this day and age when everything can be bought via the internet at the lowest price on offer. There are some in the toy trade who believe that independents should be able to stand on their own two feet, and should be left to sink or swim – I don’t believe the toy industry is as short sighted as to adopt that perspective en masse, but there is a kernel of truth in the need for independents to differentiate or die! Toy specialist retail chains will often request or be offered exclusive products – maybe a brand extension or a particular licensed product which won’t find full mass market distribution, but which will still appeal to kids – this allows them to differentiate their range from grocers and generalists such as Walmart, Carrefour etc.

Independent retailers won’t get offered an exclusive for their one store, so clearly they need to find another way to differentiate their offer. Generally speaking there are two key ways they do this – firstly, many become affiliated to buying groups, via these groups they can get better terms/pricing from suppliers and better product offerings. Secondly, they can really work on their in store setting to create a really compelling experience/destination for children and families. This is easily said, but often somewhat harder to actually deliver – many independent toy stores are family owned, so staff are often family who aren’t always available to do more than keep up with the basics of shop keeping. Yet above all this is the one thing that independent stores can do above bigger competitors – such corporate stores have very little autonomy at store level typically, everything is planogrammed by someone at head office.

An independent toy store therefore has one key advantage, a customized, flexible offering –fidget spinners, loom bands or whatever is the latest must have toy are easier for independents to take advantage of. These fads offer a comparatively brief but lucrative selling window, and an independent store can really take advantage of the opportunity – with window displays, ‘try me’ outside the store, special promotions/in store events – all offer good opportunities to achieve incremental sales, whereas such a trend is often in and out before bigger retailers can truly capitalize on the opportunity.

One other area where independent retailers can draw people into store is that ‘WOW’ factor – there are some products that you won’t ever see in Carrefour or Target or Argos, some toys that are either very niche or very expensive but really compelling/aspirational for kids to see or play with in store. Generalist retailers don’t need to create the wow factor, they work on pricing, in stocks and having the right hot toys, because they already have huge footfall. Independent toy stores need to work harder on attracting footfall, and then the basics of retailing still apply – good merchandising, good range of products that are appealing and prompting/offers to get products off the shelves and through the tills.

One thing is for certain, toy companies will continue to help the toy specialists, but toy specialists should be very focused on helping themselves by actively seeking differentiation versus their bigger generalist competition – it isn’t ever likely to be easy, but that’s the game!

Do you need help to find the right mid to senior level people? We can help…we have been helping people from across the world of Toys, Games & Licensing to find new roles since 2011. Our client list reads like a ‘Who’s Who’ in the industry, think of a Toy company and we have worked with them in some way. Along the way we have met thousands of really talented people who could be your next hire.  Get in touch for more information via the ‘CONTACT’ page if you need help to hire new people, or check out www.ToyRecruitment.com 

Toys & Games: Alternative Distribution Channels

Toys & Games: Alternative Distribution Channels

We in the toy business can tend to get very focused on our existing (traditional) retailers. In markets like the USA, France and the UK, just a few retail chains per market have a very significant market share (i.e. Walmart & Target in the US, the hypermarché and toy specialist chains in France and in the UK) and tend to demand a large degree of focus and care from our sales teams.

The German toy market is unusual when compared to these other major toy markets, in that it has a very fragmented retail base, with its preponderance of independent toy retailers and no one retailer accounting for a very large share of the market, it is somewhat unusual. This difference shifts the challenge from managing one or two highly demanding super-sized retailers to ensure you can leverage as many listings/shipments as you need, to a challenge of managing a fragmented sales network and the need for more substantial sales infrastructure.

One distribution factor that is present in mostly equal measure in all these markets though is the concept of ‘alternative distribution’. Away from much cherished toy specialists and highly valued but very demanding multi product retailers, is a different world where toys can be present but aren’t necessarily integral/essential to the retailer in question. While Toy specialist retailers obviously must stock toys, and the mass market generalist retailers use the toy category to drive in store traffic and to ensure they capture as much ‘family’ spending as they can, why would a book store, a furniture store or a multi-media retailer stock toys – especially when toys are sold on a ‘firm sale’ basis i.e. the retailer buys them and keeps them, not like sale or return to supplier which is typical for books or multi-media for instance? Moreover, do these retailers merit focus and attention when they tend to take a narrow range of products from a limited number of suppliers?

The value to toy companies of such customers probably comes down to business strategy and place in the market. The 80/20 rule would probably suggest that such retailers are not worthy of the time of the sales departments in larger companies like Mattel, Hasbro or Lego for instance. Such non-core customers are more likely to be passed onto wholesalers by these big players. However, for smaller companies there may well be value in targeting such alternative distribution, because the value of the potential opportunity may well be more significant to a company that doesn’t have full distribution into all traditional channels. My own experience would suggest that sometimes it is easier to be one of a few suppliers in a particular category than it is to be one of many. For smaller companies, a broader base may mitigate the risk that gigantic customers pose in terms of ongoing sales/listings stability and inventory.

These alternative retailers may sometimes appear to be uncommitted to the toy category – some years they are in, some years they are not, but the reality is that they do offer incremental opportunity. Sometimes they may increase their toy line around events i.e. a major book launch, or a particular season of the year. Toys can help them broaden their offer to the consumer and draw in more families to their outlets.

While consumers may not be looking in such types of stores for toys specifically, the research I have conducted suggests that the average consumer does not think ‘I’m in a book shop, I am only here to buy books’, rather they look at and eventually purchase items which they want or even need, regardless of where they are when they buy them. Certain types of toys can fit very well with a particular retailer, i.e. the Lord of the Rings and The Hobbit film toys (& other merchandise) appear to have achieved significantly more in store space than the general line of toy products offered usually due to the clear link between the movies and the books they are derivative works of.

Toys may not seem such an obvious fit with some of these alternative distribution channels, but they still offer revenue opportunity for those willing to step outside the usual and place a sales call!

Do you need help to find the right mid to senior level people? We can help…we have been helping people from across the world of Toys, Games & Licensing to find new roles since 2011. Our client list reads like a ‘Who’s Who’ in the industry, think of a Toy company and we have worked with them in some way. Along the way we have met thousands of really talented people who could be your next hire.  Get in touch for more information via the ‘CONTACT’ page if you need help to hire new people, or check out www.ToyRecruitment.com