HOW TO DEVELOP MORE HIT TOY & GAME PRODUCTS & FEWER FLOPS...

HOW TO DEVELOP MORE HIT TOY & GAME PRODUCTS & FEWER FLOPS...

Our Consultancy call service offers you the chance to ask any questions you have about your business, your products, export markets, manufacturing – pretty much anything about how to get ahead in the Toy business, We can also give you some additional contacts of key people across the toy business from distributors to factories to product developers. If you want to find out more on how this service works, just click here: https://www.kidsbrandinsight.com/services

THE PRODUCT SELECTION PROCESS: HOW TO FILTER OUT PRODUCTS WHICH WILL FAIL & IDENTIFY POTENTIAL SMASH HITS?

There is fairly true cliché regarding the Toy business – it’s sometimes seen as better to throw plenty of stuff out there against the wall and to see what sticks, because so many Toys in the marketplace are transient. We have a gigantic annual product churn in this business, with the majority of SKUs being new each year, despite how wasteful and inefficient that is.

There are a number of factors creating this gigantic annual churn: Firstly, our industry is strongly driven by fads and trends that come and go quite quickly as the fickle demands of children change like the winds or seasons! Secondly, the movie business remains a major driving factor in Toy sales, and needless to say the shelves need to be cleared each year to make way for the next raft of movie Toys based on the next year’s movie slate. Thirdly, due to the weather patterns and school timelines, the Toy industry is naturally split into 2 major selling seasons – one where kids are primarily indoors and one where they have more access to the outdoors, this naturally changes product selections in retail on a bi-annual basis. Fourthly, Retailers traditionally press Toy companies for ‘New News’, because of the up and down nature of the Toy industry they are fundamentally incentivised to pressure Toy companies into chasing the next big thing.

So there are a number of factors providing impetus to an ongoing stream of product development for Toy companies. The challenge then is to balance this with prudence, avoiding wasteful (costly) developments and focusing development on those products which give the greatest chance of delivering hit products to market and reducing the risks of catastrophic launch failure. Now if you stick around long enough in this business you will experience your fair share of massive successes and total stinkers! I have plenty of both on my résumé.

In case you have not yet experienced either great success or great failure with your products I can briefly highlight the range of feelings you go through. At one end is pure exhilaration, self-fulfilment, ego fuel, acclaim and soaring emotions. The other is lonely, embarrassing, wounding to your professional self-worth and even traumatic to recover from in some instances.

It is therefore an ongoing surprise to me how little some Toy companies do to ensure they have the best chance of huge success and the least chance of catastrophic failure!

FORMALISING PROCESSES, INPUTS AND SIGN OFFS

There is no secret about how you can setup your business to launch more hits and fewer flops – you implement a product selection process which is not casual, informal and slapdash, but instead you formalise the process by which products are added to your product line, and you formalise the inputs required to get official sign off. Furthermore, you formalise key dates or sign off events to ensure you don’t forget to take time to properly assess, ‘pressure test’ and approve your product line.

Now there are probably two perspectives on that last statement:

1.      If you work for a major Toy company, you will maybe take that formalised process for granted, and if anything, you may wish for a bit less formality and more flexibility.

2.      If you work for a less corporate company, you will either see the obvious benefits of formalising product selection, or you will brush it off.

It’s those in position 2 who this article could benefit.

Because what normally happens in smaller companies is that there is an ad hoc product selection process based on a combination of: owner or senior management whims, retail requests, passion projects which get driven through and average products which nobody finds a clear objection to. This casual and meandering product selection strategy is what increases the chance of product launch failure.

WHAT SHOULD A ROBUST PRODUCT SELECTION PROCESS CONSIST OF?

1.      Include All Key Stakeholders - Key stakeholders should include: senior management/owners whose money is being spent, someone ‘nasty’ who likes saying no, isn't emotionally invested in products and who is happy to ask awkward and unreasonable questions (this is normally but not exclusively someone from Finance!), product development teams, engineering, sales, marketing, QA, export sales managers AND target consumers.

2.      The process should have clearly defined mandatory inputs & responsibilities for making those inputs - inputs should include: clear evidence of analysis on market/competitive positioning i.e. why is your product likely to compete well versus the many other products out there, or to put it another way, why would a Retailer put your product on shelf/how will you get stand out in the vast array of products listed on e-commerce platforms and why would a consumer spend their hard earned money on your products; key financial info including Pricing (including competitive pricing analysis whereby you prove that you have a competitive price positioning), margin and forecast sales volume, tooling & inventory investment; QA inputs - anything special to look out for, any product specific requirements or risks to be aware of; Sales input (domestic & export) including what Retailers are looking for, Sales objections, barriers to getting the product listed; marketing plan and budget; and last but not least, consumer insights – have you tested the concept AND the play experience with the target consumer i.e. Kids, Families, Adults?

3.      Clear fixed non-negotiable Timings and Formalised Meetings – the timings of the Retail sell-in process or peak seasons for consumer sell through are not variable. The key preview meetings and trade shows are held at the same point in time every year (barring the recent Covid induced disruption). So there should be no flaky mañana mañana about the product sign off events in your business. Dates should bec locked in stone, because the Retail selling window is largely fixed, so your product selection events should also be fixed accordingly.

Now admittedly we do often get late entrants to the product line – a new License signed or a new inventor concept or newly signed distribution item which arrives really late. We shouldn’t turn away from those opportunities, because moving fast should be an advantage for a smaller/medium sized company vs a corporate global company, BUT that should be the exception, not the rule. You can most probably afford as a company to roll the dice and take an unplanned, entirely speculative punt on something, but that should only be the cream on top, not the entire cake! If you know your main previews start in early or mid-September, you can work back on the necessary timings to ensure your sign offs take place.

Now this has been quite dry so far – talk of processes and sign offs - some of you reading this might be nodding off already from boredom and mental fatigue, so let's try to liven this up with some examples of products I have worked on where skipping the above steps lead to failure. I now find some of these failures amusing, but at the time I found many failures deeply upsetting, stressful and dramatic!

LATE CONSUMER INSIGHTS, CONFUSED POSITIONING AND POOR EXECUTION WHICH SHOULD HAVE CULLED A NEW BRAND LAUNCH, BUT DIDN’T

My first full time job in the Toy business was as an in-house market researcher for a Toy company. My job was to take new concepts out to consumer test with kids and families. I was briefed on a new brand launch by the product development team and went out to test the product. Sometimes it is just obvious that a product concept is fundamentally flawed. This project was one of those – the product concept was based on irony – the product featured an animal known for being slow, but the irony was supposedly that this animal was fast (for no particular reason), and then the Toy itself had variable speeds, so kids could race the toys, but they would in theory have variable speeds from slow to rapid. The execution was very poor though, so the Toys actually went a). slow, or b). a bit less slow – it was not dramatic, it was not exciting, kids did not like the type of animal, it wasn’t cute or funny, and the irony was not understood at all by the target audience (younger kids don’t get irony often, at least not in the way they understand it a few years later when they are full of irony and sarcasm!).

So the bottom line on this product was that it was clearly crap and very likely to fail commercially. I fed this back politely but clearly to the product development team, and I was then hauled in front of some senior management people to justify my apparently over negative report recommending the product be dropped or at least launched in just one trial market first to reduce the financial risks of failure, even though it was quite late in the process. The company decided to launch the product anyway across multiple markets, and when the product stank up the shelves and sat there robustly refusing to move despite considerable markdown/clearance funding, I was exonerated, and the company booked a significant loss, both financially and in terms of kudos with Retailers who questioned how we could have got it so wrong with that product.

If the right questions had been asked, and the appropriate inputs sought at an earlier stage, this failure could clearly have been avoided – the product was mechanically not up to scratch, the concept was very unlikely to appeal to the target market, and there was no analysis of the positioning of the concept beyond ‘the product development team who are all adults find this funny’.

SMALL PROJECT, BIG PROBLEMS, COULD HAVE BEEN AVOIDED!

At one point when I was managing a large portfolio of brands and products, I was called to a team meeting to discuss a very minor SKU which contributed very small sales on a minor brand. None of us took the meeting very seriously because the subject was fairly insignificant on the surface. We made a number of arbitrary decisions because none of really cared that much about the topic, and we presumed the implications were limited. One of the decisions we made was to change the outer packaging format so that the product shipped in a CDU (counter display unit) instead of the usual outer, which required work on the shop floor to make the product saleable. What we didn’t realise was that our Sales team was having an ongoing argument with a major customer about packaging, costs and impractical in-store displays. To cut a long and stressful story short, we created a big relationship problem with our Number 1 customer due to lack of attention, and because we did not bother to loop in the Sales team who would represent the customer’s needs in our process if we had bothered to include them!

THIS ALL SOUNDS VERY BUREAUCRACTIC, HOW MUCH OF THIS DO WE ACTUALLY NEED…? 

The major Toy companies tend to run 3 primary stages of product sign off:

1. Concept - this stage seeks to validate the basic ideas and presumptions behind the concept to decide if the concept merits development resources.

2. Final designed product – this stage should bring back a designed product which looks & works like the final product, but before committing to tooling investment and inventory – in effect this is the launch or don’t launch point in the process based on as close to final reality as we can get.

3. Nearly final manufactured product – this is a final check & validation of the product before it ships out to retail and/or to consumers. I have been involved in some serious screw ups because we missed out this stage. The more key stakeholders who can see and approve the product just before it ships, the better it will be. From expensive and stressful legal cases through to product recalls or unnecessarily terrible product reviews due to printing errors, the final sign off should be approval to ship the product.

The biggest mistakes I have made and also seen in this business is skipping one of these three stages of due diligence, sign off and approval. Over time I've had to fly out to factories to do the final sign off the product on the production line due to tight timelines, but it's always worth doing to avoid the risk of really screwing something up & shipping an unsaleable product!

THE BOTTOM LINE

So apologies that the answer to the question of ‘How can we develop more hits and fewer flops’ is not exciting, glamorous or creative. The bottom line in terms of delivering more hit products and fewer flops to market is formally taking time to diligently assess the product and its chance of success/improvements to increase the chance of a successful launch. Most small to mid-sized Toy & Game companies would benefit from more formal signoff meetings/processes. I have advised dozens of companies on implementing this, and while some drift away from this over time, and some implement less rather than more of this strategy, all clients I worked on with this agreed that it made their decision making much more effective and increased their successful product launch ratio.

Our Consultancy call service offers you the chance to ask any questions you have about your business, your products, export markets, manufacturing – pretty much anything about how to get ahead in the Toy business, We can also give you some additional contacts of key people across the toy business from distributors to factories to product developers. If you want to find out more on how this service works, just click here: https://www.kidsbrandinsight.com/services

#hittoys

#hitgames

#successfultoys

Geopolitics & The Toy Industry, Navigating An Ever More Complex World

Geopolitics & The Toy Industry, Navigating An Ever More Complex World

Our Consultancy call service offers you the chance to ask any questions you have about your business, your products, export markets, manufacturing – pretty much anything about how to get ahead in the Toy business, We can also give you some additional contacts of key people across the toy business from distributors to factories to product developers. If you want to find out more on how this service works, just click here: https://www.kidsbrandinsight.com/services

THINGS USED TO BE SO MUCH SIMPLER…OR WERE THEY?

If you watch Television news nowadays, it’s hard to avoid constant reportage of Geopolitical tensions amid a seemingly very disrupted world. Things had seemed so simple previously – ever since the collapse of the Soviet Union ended Cold War 1 & heralded the age of a Unipolar world with the USA as the single military superpower.

Today the world is much more complex than it was. But it’s also easy to forget how difficult and tense society was before the Soviet Union collapsed. I remember well hearing the testing of nuclear air raid sirens in the UK as a kid back in the 1980s – frankly it was scary to grow up within the constant shadow of a potential nuclear holocaust. Schools played public service broadcasts on VHS (!), showing what would happen if a nuclear war actually happened.

The reality though from a historical perspective is that the comparatively calm period of the 1990s through to around 2010-2015 was the exception in human history. Planet Earth had rarely been so calm, and so comparatively peaceful.

And why does all this matter for those in the business of Toys & Games? Because we’re in a more complicated environment for doing business, and relatively few Toy companies produce and sell their Toys in just one country. In fact, nearly every Toy company I know where the company has been in business for more than 5 years is in effect a global business. Many are manufacturing in China, Vietnam, India or other Asian countries, and selling across North America & Europe at least. So the reality is this, you may not care about all the ins and outs of Geopolitical wranglings, but you certainly feel the effects of the consequences. Surely it makes sense to get more educated about what is going on in the world to pre-empt the risk of your business being ever more disrupted by the tides of geopolitics.

If you’re currently paying too much for container shipping out of Asia (again!), the 2 primary reasons for those cost increases are 1. Usual supply & demand economics and 2. Supply impacted by a live and hot Geopolitical situation, namely the circumventing of the Suez Canal by ships due to attacks on shipping by the Houthis from Yemen, who in turn say they are attacking shipping due to the Israel-Palestinian conflict, which in turn was caused by a long history of Geopolitical wranglings including Britain’s end of Empire period, the involvement of the United Nations and the fallout from World War 2.

Can higher shipping costs today really be linked to events from so long ago? Yep, absolutely. So you have a choice – to follow the Geopolitical trends to get ahead of the risks and opportunities your company faces, or to wait until things flare up and belatedly try to react to the situation on the hoof each time.

Below are a few broad Geopolitical issues to follow to keep an eye on what issues might affect the Toy industry next.

US PRESIDENTIAL ELECTION: TRUMP OR BIDEN

On one level you could argue that whether we get a Trump or Biden presidency next is an internal political matter for the American people. As a Brit I am certainly not going to give you any subjective opinion on U.S. domestic politics.

However, things are not quite as simple as that, because America is by far the world’s biggest Toy market, and so what happens in the forthcoming election WILL affect the world of Toys both at home and far away. We’re not going to look at the domestic policies of either candidate or either party here, because that just gets too contentious, but U.S. foreign policy is a big influencing factor for the Toy business.

Let’s look at Trump first – his first presidency saw him confront what he (and many others) saw as anti-competitive trade and economic policies from China. Generally speaking, Trump’s presidency was the first to see a clear switch from an open positively intended relationship from the U.S. towards China to a more adversarial and competitive outlook and relationship.

First time around, President Trump hit imports from China in numerous sectors with tariffs. He didn’t directly bring in heavy tariffs against Toy imports from China, but he was moving ever closer around the edges of the Toy categories, and some companies who sit across both the Toy biz and some other industries were affected.

As a strategic Sourcing consultancy, my Toy Team Asia business greatly benefited from President Trump’s tariffs and threats of further tariffs. My phone was red hot as companies squirmed and reacted to the real risk of significantly increased landed costs for importing Toys from the world’s biggest Toy manufacturing hub. For the first time under Trump’s 1st Presidency the Toy industry started to question whether it was sensible to rely nearly entirely on China for Toy manufacturing.

From the perspective of a second Biden Presidency, should that happen, we might not need to be so worried about the risk of sudden imposition of tariffs, but we can still see an administration focused on strategically competing with China, it’s just that the rate of change may be slower from a Toy manufacturing angle under Biden versus Trump.

The other major area which affects the Toy business is Trump’s stated desire to get peace in Ukraine, but we’ll come back to that when we look at that conflict further below.

GREAT POWER COMPETITION, DECOUPLING & MOVES IN MANUFACTURING

There is a lot going on in terms of the inter action of the world’s great powers right now. Much of it is beyond the scope of interest of the Toy business, but what is really clear is that over the last decade, we have moved from a situation where the USA & China had many mutual interests and some lesser areas of tension into pure two super power competition, and the aligning of nations on one side or the other broadly speaking. Many historians and geopolitical analysts are now referring to the state of the world today as ‘Cold War 2.0’.

The major impact of this for the global Toy business is a changing role for China. Having come out of the shadows and opened up in the late 1970s and early 1980s and having unleashed a huge hungry and poverty-stricken populace on low end manufacturing, China became the world’s manufacturing powerhouse.

Today though, many businesses, many retailers and many factories see the friction between the ‘Free world’ and the ‘Autocratic’ world as too risky to allow the previous status quo to continue.

Ten years ago, when I began the process of informing Toy companies they would be moving production out of China in the next few years whether they liked it or not due to the way the world was evolving, many laughed at me. Now, many of those same companies have sourcing offices and even new factories in distant geographies far away from China, and their communications with me give the impression that they never had any doubts on the need for strategic sourcing diversification!

China remains a critical partner to the global Toy industry however, and I want to be clear about that – I love Chinese culture, I grew up as part of the Bruce Lee generation. I have always loved mystical Eastern cultures and I have great friends and business partners in China, but the world has irrevocably changed, and while today I believe China is still producing in the vicinity of 80% of the world’s Toys, that market share is dropping, and the rate of decrease in share appears to be accelerating.

I have written extensively on the new winning geographies, which include Vietnam, Indonesia, India & Mexico. If you want to know more about this transition, just watch this video I posted a while back:

https://www.youtube.com/watch?v=IR3kBOd12ss

China, Taiwan & the USA

Aside from some production moving out of China, the other massive geopolitical risk factor when it comes to the USA & China is the issue of Taiwan. When relations between China & the USA thawed in the late 1970’s, Mao & Zhou, the leaders of China at the time said to the U.S. leaders, we don’t need to make Taiwan an issue that comes between us, because the reality is that Taiwan is part of China & will return to China eventually regardless of what either country does, so we don’t need to rush that issue or prompt a crisis, it will just happen eventually. In the meantime the U.S.A. adopted a policy of strategic ambiguity, neither declaring military support for Taiwan or not supporting Taiwan. This limbo situation suited both sides originally, China had other fish to fry, and the U.S. rarely needs further overseas entanglements, but at the same time benefited from a status quo in which China was not able to get past the ‘1st island chain’ to have a clear run at US pacific interests.

Today though the situation has changed, and the risks of conflict in the South China sea have increased as China’s strength has increased, as has her assertiveness, and strategic ambiguity is now in itself ambiguous – does President Biden support strategic ambiguity, or as he has sometime suggested, does he feel unambiguous in support for Taiwan?

The issue here for the Toy business is that if there were to be a conflict, or even a blockade of Taiwan in the world’s busiest container shipping waters, then the world as we know it would change overnight. Heavy economic sanctions would likely ensue, military tensions would rise, shipments would be at best rerouted to longer less direct routes (and we already know that causes massive shipping cost increases and affects demand for shipping capacity), and at worst imports from China could be entirely blocked.

Hopefully peace and mutual interest will prevail, but I have heard of major U.S. retailers telling suppliers to move a minimum fixed percentage of production out of China on a greater scale than they have been doing to reduce the commercial risks of a conflagration in and around the first island chain. As we know, stock market listed companies have whole divisions of staff who analyse risk, and they will take steps to reduce risk, regardless of whether the risk morphs into actual reality or not. So the bottom line is that even the risk or threat of a conflict in, near or around Taiwan has a real impact on how major commercial entities will interact with China.

THE MIDDLE EAST IN CONFLICT

Geopolitical tension in the middle east is nothing new. Most of us who have been around the block a time or two have seen a decades long carousel of conflict, turmoil and terrorism in or coming out of this part of the world. We don’t have time to go into all the reasons for why the middle east is one of the world’s most turbulent regions, but I think we can all accept as a provable fact that this is a more turbulent region than most.

From the oil crisis of the 1970s, through two gulf wars, the never-ending saga of the Iranian nuclear program and the tragically seemingly endless Palestinian-Israeli conflict, peace and tranquillity never seems to be just around the corner in this part of the world.

The latest round of turbulence has had a significant effect again on the Toy business due to the issues with Houthi attacks on ships looking to transit the Suez canal. This is a much quicker, and therefore much cheaper, route from Asia to Europe, and the East coast of the USA. Rerouting container ships & oil tankers around the bottom of Africa has pumped up shipping costs again. We don’t seem to be back at the outrageous levels we experienced coming through the pandemic, where container costs were as much as 1000% higher than standard, but we are getting people being hit with c. 200-400% of historical costs.

At this stage, these costs are effectively already baked in for 2024 peak season, but hopefully the cost structure which developed to get through the last container shipping crisis has left some room for movement here, but regardless of that it isn’t making things any easier!

In terms of the prospect for a resolution to the issues accessing the Suez Canal, well, who knows! The good thing is that it is in the interests of many major powers to see this situation resolved. Whereas China’s state may see other conflicts as being strategically in their interests if it weakens their main competitors in the West, clearly shipments from China passing through the Suez Canal is important for China’s critical manufacturing sector. Historically, manufacturing was a bigger part of China’s economy, but today it still represents around ¼ of China’s economy, so doubtless whatever China can do to encourage the resolution of the Houthi attacks on shipping will be done, and this hopefully outs the U.S. and China on the same side for once on that specific issue.

Looking beyond that it’s currently hard to see how the friction between Hamas, Hezbollah, Iran & Israel will blow over, as all sides seem to be set on hard-line paths to conflict and destruction sadly. I’m not holding my breath for peace in this region, but I hope to be proved wrong on that.

On final point – despite all this tension & conflict, we still have a Toy business worth approximately $1bn USD in this region, and that is a testament to the determination and strength of Toy people. When I started in the Toy business some 25 years ago, this part of the world was regarded by many major Toy companies as being more or less insignificant commercially, that is clearly not the case anymore.

WAR IN UKRAINE AND THE THREAT OF BROADER WAR IN EUROPE

Remarkably, the unleashing of destructive war in Europe on a grand scale for the first time since the end of WW2 has had surprisingly little impact on the European Toy market overall (albeit it has been tragically destructive for Ukraine & her people). No doubt some companies stopped trading in Russia, for example, Hasbro announced in an earnings call a more or less immediate end of more than $100m in business in Russia soon after the conflict began.

But the trade gossip suggests that many companies are circumventing lost sales to Russia by having record sales into Russia’s neighbours like Kazakhstan. One company told me off the record that while they stopped selling to Russia directly themselves, sales into Kazakhstan have increased by c. 500%...I’ll let you connect the dots…

As unbelievable as it seems to have to state this after so many decades of peace following the mass scale destruction and slaughter of World War 2, we do have to consider the genuine risk of broader war in Europe between Russia & NATO, because both parties and their various constituent parts have made various comments on this. It seems to be very unlikely that either NATO or Russia would be crazy enough to engage in direct conflict between each other. Some quick research will show that if all of NATO fought a conventional war against Russia, Russia would lose emphatically, but of course Russia has the world’s greatest collection of nuclear weapons, and therefore direct conflict should remain unthinkable for both sides, but then again history is full of miscalculations and strategic missteps.

The lyrics to Sting’s famous song ‘Russians’, from the tail end of the Cold War spring to mind:

“Believe me when I say to you I hope the Russians love their children too”

Let’s hope that common sense prevails, but the reality is that any broadening of conflict in Europe would be terrible and risk massive impact in terms of the societies, economies and populations of Europe. Expect the Toy business to be massively impacted if things go wrong here and war spreads, but fingers crossed they won’t!

As a Consultant though, I am increasingly advising my clients to grow their business outside Europe to reduce the %age of their business at threat if conflict spreads further or if economies of European nations are hit by wider conflict. Sad times.

ECONOMIC TRENDS: POST INFLATION (?)

Another major consideration is the global economy. Major economies had high inflation coming out of the pandemic at a level most of us haven’t seen in our adult lives. This in turn pumped up interest rates, made borrowing more expensive and reduced consumer demand across the board.

The good news is that inflation rates have come down considerably, and the direction on interest rates in many countries is starting to look like heading notably downwards also, but as of yet, there is no sign of a major uptick in consumer spending. It may take a couple of years for everything to shake out and for demand to significantly increase again.

The truly surprising thing about the past couple of years is that we Toy people take pride (and reassurance) from the fact that our industry is so provably recession resistant. It wasn’t fun working through the global financial crisis of the late noughties, but other industries were much more badly affected than ours. The last few years have seen our industry impacted in a way which most of us never saw before.

Again though, the good thing about surviving hard times, is that when tough times abate, those left are tougher, leaner and more likely to take advantage of opportunities on the next boom period.

BRITAIN & THE EU POST BREXIT

A look at geopolitics and the Toy business would not be complete with at least a paragraph or two on the ‘B’ word. Has Brexit been the economic miracle many suggested it would be, absolutely not! But on the other side it has not provably been a disaster either, for either Britain or for the EU.

Yes, many companies had to double up warehouses on each side of ‘Le Channel’. Yes, bureaucracy has increased if you want to send anything over the pond, and yes it’s a pain in the backside as a Brit to have to queue longer to get into other European countries, but much to my surprise, I have not seen any massively negative issues looking at the Toy business as a whole…it’s more just the imposition of annoying barriers to things we used to take for granted, and I guess you can consider those as ‘First world problems’ in the grand scheme of things.

REASONS TO BE CHEERFUL

The Toy business has been through a tough couple of years. The world is getting more complicated, not less so, and so it’s not always easy to look forward in confidence these days. But one thing which always fills me with optimism for our industry is when I run Focus Groups on Toys with kids & parents. I have completed various research projects this year, and aside from all the bigger picture challenges out there, the reality is that kids still REALLY love Toys, and parents like them playing with many different types of Toys. Kids also tend to own hundreds of Toys in general by the time they are moving out of the age of playing with Toys. This always makes me feel like things are going to work out well eventually for the Toy business, even if there are a few more clouds around than there used to be.

PLAYING AT BUSINESS PODCAST

Episode 107 - Which Toy & Game Trade Shows Should You Attend?

The topic of trade shows has been a hot button as the pandemic disrupted the normal schedule and lead to much debate about which shows were needed and which weren't, as well as the timings of these shows. In this latest episode of our Playing At Business podcast we take a look at how things have shaken out, and we consider which shows will benefit different types of companies. This episode was written and produced because the question of which shows people should attend was so common, henceforth we will be directing people towards this episode for the answers...!

https://playingatbusiness.libsyn.com/ep-107-which-toy-game-trade-shows-should-you-attend 

SPIELWARENMESSE.DE - SPIRIT OF PLAY 

Here's a couple of articles I wrote which were recently published on Spirit Of Play the official Blog of the Spielwarenmesse-Nuremberg Toy Fair:

WHY SOME PRODUCTS AND TRENDS COME AROUND AGAIN AND AGAIN

This article takes a look at why certain products and trends keep on coming back into the market.

https://www.spielwarenmesse.de/en/mag/trends/why-some-products-trends-come-around-again-and-again/

TOY MANUFACTURING: TRENDS AND STATUS

This article looks at how and why Toy Sourcing has changed, and where we are heading towards:

https://www.spielwarenmesse.de/en/mag/markets/toy-manufacturing-trends-and-status/

AND FINALLY...

Our Consultancy call service offers you the chance to ask any questions you have about your business, your products, export markets, manufacturing – pretty much anything about how to get ahead in the Toy business, We can also give you some additional contacts of key people across the toy business from distributors to factories to product developers. If you want to find out more on how this service works, just click here: https://www.kidsbrandinsight.com/services

Which Toy Trade Shows Should You Attend?

The following is the script for Episode 107 of our PLAYING AT BUSINESS podcast.

It's written to make the podcast work as best as it can, so it doesn't read like a typical article, but some of our followers have asked for the script to be shared so they can access the information without having to listen to a full podcast episode.

To listen to this & other podcast episodes, just click here:

https://playingatbusiness.libsyn.com/

WHICH TOY TRADE SHOWS SHOULD YOU ATTEND?

·       Hello, and welcome to The Playing At Business podcast.

I’m your host Steve Reece

·       For today’s podcast We’re going to take a look at the major Toy trade shows & discuss the factors for you to consider in deciding which shows to visit and exhibit at.

·       Before getting into that, just a couple of up-front bits and bobs:

1.       I have a series of Linked In Newsletters offering long form report style analysis & commentary on the Global toy & game business – just search on Linked In for Steve Reece toys or Toy Industry Journal Newsletter & you should find the newsletter. Please feel free also to send me a Linked In connection request, and then you should see everything I post on Linked In in your feed (algorithm allowing!). At the time of recording we have 36 editions of that newsletter you can check out, and with more than 5,500 subscribers from across the Toy & Games business this is a Free resource you would be crazy not to tap into!

·       Now a quick plug for our Consultancy business services:

1.       Would you like to ask me about your business and your challenges in the Toy & Games industry? I have an entry level Consultancy service which helps companies of all sizes and budgets to ask me about anything which they need to know more about – whether it’s reviewing a product concept, discussing how to grow your business, how to get export sales or anything else about this industry. I have conducted so many of these Consultancy calls now that I feel like the value we can get you for a relatively small sum invested is better than it has ever been. To find out more about this Consultancy service, just go to www.KidsBrandInsight.com/services

2.       Thirdly & finally in terms of our services alongside helping companies with their export sales we also work as head-hunters or recruitment consultants to help you find the right senior people to power your growth. As we speak I am finalising recruitment for a major Asian company for a senior international role. For more details just get in touch via: www.KidsBrandInsight.com/services

·       Anyway, that’s quite enough up front rambling, let’s get into the topic of today’s podcast:

·       Probably the question I get asked most by my clients who often come from outside the Toy & Game industry, is there are so many trade shows, which ones should we attend?

·       Today’s podcast seeks to answer that question.

·       But I’m not going to tell you exactly which shows you should lock in for your business, because I have listeners who are start ups in one country or another through to people who are high up in major Global players.

·       There is no one answer, no one size fits all decision here.

·       Instead what I want to do is to look at some of the key trade show events on the calendar, describe their characteristics & opportunities and try to outline which type of company is most likely to benefit most from each show.

·       Of all the areas of the Toy & Game business that have been most discussed through and after the Covid-19 pandemic it is trade shows.

·       Needless to say we encountered significant disruption during the pandemic, and physical trade shows were largely cancelled for a time.

·       What happened then was a lot of industry navel gazing arguing and disagreeing about which shows we needed and which we didn’t.

·       Things were up in the air for quite a while, but now it looks like things have settled down & now the place of each show in the calendar looks like being fixed into place for the foreseeable future, and actually things are not all that different overall, with just a few key changes which we’ll run through.

·       So the way I’m going to do this is to run through a typical selling cycle, from the earliest trade show in the selling cycle through to the end of the cycle.

TOY & GAME COMPANY PREVIEWS

One selling event which doesn’t get enough discussion are the thousands of previews which take place in Toy & Game co showrooms from September onwards each year. The benefits of these previews are that you get focused buyer time, and the buyer knows you have all products and data available to answer all their questions.

·       I don’t remember visiting an established company which didn’t have an in house product show room on site.

·       The challenge of course is persuading buyers to leave their offices & to spend a probably inefficient amount of time with just one supplier. Needless to say you are going to have to be an established supplier with sufficient new news and breadth of product line to merit the buyer’s time to visit you.

·       Sometimes for smaller companies, you may do a roughly equivalent visit to the Buyer in their offices to do a quick i.e. 30-60 min presentation of your new lines for the following peak season.

·       Which is where the newest established or at least newly formalised LA PREVIEWS events come in (April & Sept).

·       Historically, the major Toy companies of Los Angeles would run their own preview events in their show rooms in and around the beach districts of LA.

·       Mattel & MGA have been major drivers but also buyer magnets to L.A. for previews around September and October for peak season (as well as an earlier time period around April for spring-summer season).

·       At a similar time as the autumn previews, the Toy Association historically ran the Dallas previews event, which was a formal gathering of North American Toy & Game companies in one place and time to maximise efficiency for buyers and their suppliers.

·       The shakeout post Covid is that the Dallas show is now gone, and instead, both the Toy Association, but also international Toy & Game companies have formalised a gathering in LA in September, with many companies having an extended preview season in L.A. of c. 8 weeks or so.

·       So, the bottom line on the LA previews is this: if you are an established company, with established retail customers in North America, as well as international distributors who are now visiting this event, and you can book in a lot of appointments in advance with existing contacts and partners, then you should benefit from this extended event – although it is expensive & time consuming based on an extended presence of multiple weeks.

·       I think now this show has been more or less cemented into the annual calendar & supported by the Toy Association it is now a fixture, and if you want to sell into the North American market, at the right time in your company’s development it will become must attend.

·       If you are newer to the industry or don’t have many existing contacts though, then I think this show is going to be a tough show for you to gain traction from. That’s just my opinion, but this is not like one hall or exhibition centre you can hang around at, it’s several buildings with private closed showrooms. OK there will be some social and networking events, but if you don’t have a show room you won’t get much opportunity, and if you book a show room speculatively it can be quite hard to get enough traffic to your showroom to merit the costs & time invested.

·       Ok, so after the LA show there are some national shows. I’m going to quickly skip by these as there are a lot of them, most countries have one. In the UK we have the BTHA UK Toyfair in January, France has the Deauville ‘Preshow’ event in November, India has two shows – etc.

·       Now there are some shows which act as both international gatherings and also national shows, and some shows which are more focused on Sourcing products, but we’ll cover that as we go through.

HONG KONG

·       Aside from the Dallas show, I think the main loser from the Covid-19 shakeout is the January gathering in Hong Kong.

·       Visitor numbers to that gathering have been down considerably post pandemic so far.

·       Before the pandemic, the January gathering in Hong Kong (as well as another gathering around October for the Mega show) was a major destination for international buyers making their FOB purchases.

·       Originally HK was the trading hub from where buyers could easily buy from agents to factories in China.

·       Eventually as China opened up commercially, many buyers would meet both factory suppliers & international Toy companies in HK before heading over to the mainland to visit factories and buy direct for some lines.

·       In the end this became just another trade show really, and many companies felt they had to be there in order to get Buyer time and not lose out to competitors.

·       Going forward, I think this show will revert to more of an FOB show, with far fewer retail buyers attending – so you are likely to still get buyers from major retailers attending but rather than the entire buying team spending 2 weeks out of the office, it’s more likely to be one or two of the buying team with a focus on buying direct from factories and buying from the HK based product development companies.

·       So again, you can work out from that whether it makes sense for your business.

·       For newer companies, I would tend to say it doesn’t really make sense for you to attend unless you can see something I have missed!

SPIELWARENMESSE IN NUREMBERG

·       This show held in Nuremberg, Bavaria in Germany, held in late Jan/early Feb each year has been the biggest Toy trade show with somewhere between 2,000 to 3,000 exhibitors.

·       The show acts as Germany’s national Toy & Games trade show, but also is THE major European/International Toy show.

·       I’ve visited this show 20+ times, and it’s the number one show for me & my business.

·       The show attracts something like 60,000-80,000 people.

·       So if you attend this massive show will only ever meet a fraction of the people there and only ever get to exploit a tiny sliver of a percent of all the opportunity there at that show.

·       European retail buyers attend in their droves. There are some US buyers as well, along with retailers from across international markets.

·       There are literally thousands of distributors in attendance, and so if you are trying to get export distribution this is probably as good a place as you can be.

·       It’s not the cheapest show to exhibit at, but if you are a relatively new company and you want to grow your international sales, you WILL get a lot of walk by traffic at this show.

·       The format is a mix of a few private exhibition booths, along with most which are semi or fully open stands.

·       Accommodation is notoriously hard to find & expensive for the show, but nevertheless for most companies I would put this show as number one.

NEW YORK

·       Of all the uncertainty and grumbling about the show schedule through and after the pandemic, the NY toyfair received the most unjust speculation and turbulence.

·       Let me try to briefly explain what the issue is with the show for some people:

§  The show was traditionally in mid-February (for a LONG time).

§  The issue with that timing is that many of the big companies are more focused on mass market retailers like Walmart & Target driving volume. And mid-February is too late for the buying cycle of those major giants.

§  To me though this is a failure to understand and appreciate the NY show for what it is. It’s an opportunity for the US’s massive Specialty & mid tier market to preview products and buy late enough for how they work, but early enough for suppliers to manufacture & ship stock in time for Fall.

§  So the bottom line to me is this – there are previews in September/October – now in LA, as was in Dallas. The NYC show is different, and there is clearly financially a place for both.

§  My attitude is if you don’t want to sell to specialty or mid-tier accounts, don’t take part in the NYC show.

§  But for smaller and newer companies the NYC show is an incredible opportunity to access the world’s biggest Toy & Game market and buyers who can springboard small companies into much bigger companies.

DISTOY

·       This show is comparatively new. It started in the noughties when a few of the UK’s established Toy & Game companies got together to organise a selling event to their international distributors to be timed at the point in the development cycle when they had finished products instead of mock ups and prototypes.

·       It was originally a small show & was fairly exclusive. AS the Managing Director of an up and coming company, I remember skulking around outside the event trying to find international distributors in passing.

·       Eventually the show grew and grew as a mid year event for international distribution, with no focus on retailers.

·       The show is literally running as I am recording this podcast, so I’m going to reserve comment on this show largely, and will post my thoughts elsewhere eon this show.

·       As we come to the end of this episode now, I just want to emphasise that there are other smaller, more specialist or more local shows. I have just tried to summarise the main shows, explain what they are about/how they work and to suggest what kind of companies will benefit more from each show.

OUTRO

·       So, that’s all we have time for this time, thanks for listening to Episode 107 of The Playing At Business podcast.

·       If you’d like to ask me direct questions to address your Toy & Game industry questions and your business challenges, you could take a look at our Consultancy video call service just check out  www.KidsBrandInsight.com/services

·       That’s all for now, I’ve been your host Steve Reece, this has been the Playing At Business podcast and we’ll see you next time. Thanks and bye.