The Value Of Department Stores To The Toy Business

The Value Of Department Stores To The Toy Business

Department stores have historically played an important role in the toy business. One of the many benefits they tend to bring is supporting a broader and more diverse product portfolio. Since department stores tend to have higher overheads and therefore need to work with higher margins than discount stores or grocery retailers, they are structurally incentivised to take a significant ratio of products you won’t find in cost cutting bargain basement retail stores. By listing a different product range department stores support the broader health of the toy industry overall, as well as acting to inherently encourage new suppliers and new ideas more than some retail channels.

These though are difficult times for department stores. At the time of writing, Debenhams in the UK have just entered into the liquidation phase of the administration that began earlier this year. While Debenhams has struggled for a few years, the pandemic and resultant lockdowns appear to have been the final nail in the coffin. Debenhams leaving the market will leave a big gap, which doubtless other retailers will be quick to try to fill, but they won’t all have the same impact on the market of diversifying product ranges and accessing different consumers.

Department stores are a primary venue for the most undervalued, underutilised and arguably most effective marketing method – that being the in-store demonstration. Due to having more spacious environments, and due to being a nicer and more relaxing environment versus a grocery retailer or discount store, shoppers will often dwell longer to try something out if it looks interesting. Logically the best place to spend marketing funds should be at the point of sale, yet while toy companies queue up to pay for advertising on Amazon to raise their profile, very few fully commit to encouraging shoppers to buy in physical stores. Normally those companies who do focus on in store marketing and demonstration are among the most successful companies in the industry.

Following on from this, one area of improvement for many department stores is to make more effort to physically reach out to bring shoppers into stores. Often they have more staff versus discount chains, and you can often find staff milling around without customers to serve, yet outside the door hundreds of people can be walking past (in normal times that is, maybe not currently depending on local lockdown rules). Department stores could utilise the fun and wow factor of many toy products to entice people into store. A good example of this is Hamleys flagship store in London, at the door at point of entry there is always somebody doing something funny like juggling, blowing bubbles or something else to create a sense of fun. Perhaps Department stores could learn from this approach and take more steps outside stores to entice shoppers in.

Department stores have historically been an important part of the toy business, but times are tough, those store chains which evolve will have a better chance of being a part of the toy business in the future.


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