EL CORTE INGLES: THE WORLD’S BEST TOY DEPARTMENT…?

EL CORTE INGLES: THE WORLD’S BEST TOY DEPARTMENT…?

During a recent visit to see clients in Spain, I greatly enjoyed visiting an El Corte Ingles store. Anyone who has done business in Spain or with Spanish distributors will have heard plenty about the importance of this classic department store. With a group turnover of more than €15billion p.a. (across all departments), El Corte Ingles is a major force in Spanish non-food retailing, with just under 100 stores spread across Spain & Portugal primarily.

One of the things which is most satisfying with El Corte Ingles is the sheer breadth & scope of the Toy department. In the store I visited recently, the entire top floor of a very large footprint was dedicated to toys of all categories. This is much more of a rarity now than it was 20 or 30 years ago. There is no doubt that from a global perspective, the growth in e-commerce has hit department stores as hard as any retail channels, yet in Spain & Portugal El Corte Ingles is still successful and massively committed to their toy departments at the same time.

No doubt someone somewhere will read this article and argue that another store has the best toy department, but all I can say is that El Corte Ingles appears to be offering as good a toy department as any, and long may that continue!

Have You Checked Out Our Toy & Game Biz podcast: PLAYING AT BUSINESS?

Our Playing At Business podcast has been going since 2018, making it one of the first podcasts focused on the toy & games business. We cover all kinds of topics related to our industry on the podcast. To find the full episode list, just click here

https://playingatbusiness.libsyn.com/

Here's some specific episodes which are among the most listened to:

EP 78, CONSUMER PLAYTESTING: THE SECRET WEAPON OF SUCCESSFUL TOY & GAMES COMPANIES

Toy & games companies generally don't test their products enough with consumers. We all know how much testing goes into ensuring products are compliant with safety standards, but what about testing to see if they are compliant with functionality, fun and general appeal to kids & their parents?

Consumer research playtesting is the not so secret, but shamefully under-utilised weapon of toy & game companies. All the major global toy companies have extensive consumer research programs, but as we discuss in this podcast, research doesn't necessarily have to be expensive to be useful.

https://playingatbusiness.libsyn.com/ep-78-consumer-playtesting-the-secret-weapon-of-successful-toy-games-companies

EP 72, HOW TO FIND & VALIDATE GOOD TOY FACTORIES

Toy companies (both big & small) rely heavily on the factories they work with. Every time they produce a toy your reputation and potentially your business rest on the factory & their complying with safety, ethical and quality standards. Competitive pricing is also a concern of course, manufacturing spend is the biggest cost for toy & game companies, so comparatively small savings in percentage terms can add to up to significant money.

In Episode 72 of the PLAYING AT BUSINESS podcast we take a look at how to find and then validate good reliable toy factories. We have worked with many different factories in different factories over the years, and we have introduced more than 100 toy & game companies to new factories. The things we learnt during this process are shared in this podcast.

https://playingatbusiness.libsyn.com/ep-72-how-to-find-validate-good-toy-factories

EP 71, THE INEVITABLE RISE OF INDIA AS A TOY MANUFACTURING HUB

The toy business is moving from a single hub (China) sourcing model to a multi-hub model. India is the only other country with comparable population size, with abundant cheap production line labour and existing industrial capacity and domain expertise in plastics. There are many more reasons though why India's rise in toy manufacturing is an inevitability.

The current manufacturing solutions in India are not perfect, but as the toy business begins to clamour for ever more production capacity outside of China, only India has the potential to scale up capacity to levels like we have seen develop in China over the last 30 years or so.

More on all this in Episode 71 of the Playing At Business podcast.

https://playingatbusiness.libsyn.com/ep-71-the-inevitable-rise-of-india-as-a-toy-manufacturing-hub

EP 68, UNDERSTANDING THE TOY MARKET IN FRANCE WITH YANN FRESNEL

France is one of Europe's 'BIG 3' toy & game markets. In this episode we speak to Yann Fresnel (of Toy Influence), who has extensive commercial experience in the French toy market. We discuss his career in toys, what companies need to understand about the market in France and also look at how his company helps with market entry in 'La Republique francaise'.

This episode contains a lot of very useful and insightful information - for example we discuss how the Games category accounts for nearly one fifth of the entire toy market in France. For more key information and tips on how to get ahead in the toy market in France, listen to this episode now!

https://playingatbusiness.libsyn.com/ep-68-understanding-the-toy-market-in-france-with-yann-fresnel

Alternative Toy Distribution Channels

Alternative Toy 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 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 like Toys R Us, 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 Toys R Us 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!

Check out our Toy & Game business Consultancy business here: www.KidsBrandInsight.com/services