D2C: The Growing Importance of Selling Toys & Games Direct To Consumer
It has become ever easier for toy companies and even toy inventors to connect directly to their end consumer. This trend is both highly disruptive and arguably in the best interests of a vibrant toy business.
The closer product originators can get to commercially validating their products the better the variety of products on offer will be. In the old way of working, toy companies would screen out a lot of ‘risky’ concepts before developing a fraction of the concepts they looked at to begin with. Then risk averse retailers buying large amounts of stock at significant financial risk would filter out even more of the products which were deemed too risky or a bit ‘out there’. As a result, the whole toy business operated with more narrow parameters than they do today.
The difference today is that we can so much more easily develop a product and test the waters of consumer demand a long time before we need to consider talking to those larger organisations who can help us drive large sales volumes but who are structurally and inherently unlikely to take big risks.
Clearly crowd funding is one much vaunted method of validating and funding a new toy or game idea. If you don’t get it funded you drop it, but via platforms such as Kickstarter and Indiegogo the key decision makers are consumers of products, not all those distribution gateways which used to sit between an original concept and the consumer.
But even for toy businesses themselves, it has never been more important to have a direct to consumer offering alongside a community of fans of your company, products and brands. Needless to say, potentially cutting out your major retailer customers and selling directly to their customers is combustible (!) and needs to be handled strategically and with tact. The point though is that there should be an opportunity for win-win on that front. By interacting directly with the end consumer you can connect your company more closely to consumer demand, and in the end without consumer demand neither you nor your retail partners have a business.
Following on from our previous article looking at the opportunities and challenges offered by Amazon, we should also consider the question of what Amazon actually is (read that article here in case you missed it AMAZON – THE CHALLENGING POWERHOUSE OF TOY RETAILING …is it a retailer, or is it more of a search platform for consumers to find the products they want? Amazon’s massive product range and (comparatively) easy to access platform allows even the smallest of businesses to step up and start selling to consumers.
The reality of the toy business today is that we have never been closer to understanding consumer demand, which is a good thing. We now have platforms and media which allow us to test new products and perhaps more importantly let the consumer get closer to selecting our product lines and new directions for us. The challenge with selling direct to consumer is that it becomes even more of a marketing challenge. Amazon can be a powerful selling tool, but you need to understand and execute good marketing to avoid your product being lost. Successful crowdfunding requires a heavy marketing program to gain as much support as possible for the moment when you go live.
So D2C offers a significant opportunity and advantages for the toy and games business, but it requires a strong marketing driven approach.
We run a Consultancy business for toy companies. We work with major toy companies through to start ups and one person bands. For more information on how we help toy companies grow their distribution around the world: https://www.kidsbrandinsight.com/blog/toy-co-growth-booster-program/
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