Trends

Good news: Independent industry driven analysis of toy purchases at retail in Australia in the last financial year reveals significant growth in $10+ product purchase points.

All price point bands above $10 show growth in the research results. Even at the $50+ point, which accounts for 25% of revenue, we see 3% year on year growth.

Elsewhere in the report is evidence that the toys category is strong. I see this also in the benchmark data I access and from my own stores at a local business level.

What is most interesting is the insights as to licence and key brand opportunities. With toys being a fickle category and prone to quick growth and quick decline, having good data can be key to driving success.

I think any newsagency in any location could offer a consistent toy range and use this to attract new shoppers to the business.

While I am still working on a benchmark ratio, I am leaning toward to suggesting a reasonable goal could be toy revenue equal to at least 50% of card revenue While I know stores significantly above this, most the of the newsagency channel is below so I think a modest benchmark revenue goal is more useful at this time.  In considering this, toys means toys plus puzzles, plush and collectibles as that is how the analysts assess it.

And to be clear, the toys I am talking about here are those from major suppliers, not cheap generic brand toys you might put on a spinner on consignment.

I spent all yesterday at Spielwarenmesse, the International Toy Fair in Nuremberg, Germany, a specialised toy and related products trade fair. Across the twelve massive halls (I walked 15km) the fair hosts 2,800 toy, game, hobby, plush, collectible and related exhibitors, around a third of whom do not do any other trade show.

Brands represented in Australia through local offices or distributors have on show at this fair a bigger range. This is vital if you want to go deeper than is currently available in Australia.

I know of several local distributors who like retailer feedback for when they are planning what they may or may not take from suppliers at this fair in Nuremberg.

The most valuable outcome from being at the fair for me, however, is spotting the trends in several key categories strongly represented at the fair. It is at Nuremberg that you can see what will be hot through Christmas 2017. Having this information now, in February, can be a competitive advantage and that is why I want to be in Germany at this time of the year.

I saw several break out products that I am sure will be the bestsellers through Christmas. Australian distributors won’t launch them for another month or two by which time production for the second half of the year will be locked away.

Time is everything in today’s marketplace. Having knowledge ahead of others has a value. This is why I invest to be at events like this one in Nuremberg today and Paperworld in Frankfurt earlier in the week.

I appreciate I am not being specific in my comments here. That is deliberate. However, I will say this: toys are a growing category in retail and especially in newsagencies. In 2017, the term toys means something quite different to what it referred to just a few years ago.

Through toys we can attract new shoppers. Most of that will happen from suppliers who are not natural newsagency suppliers, suppliers who are probably not calling on newsagents today.

The best part about toys in my opinion is the brands that offer deep engagement. Do it well and consistently and the value of the customer reaches way beyond the first sale. This is where the retailer needs to be more than a shopkeeper, they need to share the passion and enable to long-term relationship with the brand. This is what specialty retail is all about.

The Shopkins products available through GNS are worth stocking. Having these on display and promoting them through Facebook pitches your business with a relevance that pushes back on the community perception of newsagency businesses. They display well and offer an up-sell for people purchasing Shopkins products sent through a magazine distributor. We have then in a couple of locations: at the counter and in our toy department.

From a category perspective, Shopkins is in a category called building sets. In a recent confidential toy industry report, building sets overtook outdoor & sports toys in sales. Sales for the building sets category is up 8% year on year. Shopkins is the top property,. It overtook Barbie. Shopkins has added $6.5 million of value in the year to 30 June.

This is why the GNS range should interest proactive newsagents.

License magazine has published the top toy licences for boys and girls for 2014. It’s a shopping list for newsagents who want to be strong in this space.

2014 Top Toys for Boys

1. LEGO
2. Cars and trucks
3. Teenage Mutant Ninja Turtles
4. Video games
5. Hot Wheels
6. Xbox One
7. PlayStation4
8. Transformers
9. Remote-controlled vehicles
10. (Tie) Marvel action figures–Tablet/Apple iPad

2014 Top Toys for Girls

1. Disney Frozen
2. Barbie
3. Dolls (generic)
4. Monster High dolls
5. American Girl
6. LEGO
7. Tablet/Apple iPad
8. My Little Pony
9. Disney Doc McStuffins
10. Apparel

While independent newsagents will struggle to get into some licences because of how suppliers operate, the list provides an excellent goal shopping list when planning for 2015. Sure, there are some entries that do not play in Australia – but overall the list is very useful not only in the toy category but elsewhere in the business.

It’s easy to be lulled into a sense of saturation when you consider the number of mobile phones per capita in Australia and other first world countries – thinking that more retail space selling the devices is not needed.

The reality is that telcos and others are expanding the retail footprint selling mobile phones. This is helped by churn – people switching telcos, new devices – the continued rise of the Android and additional purpose need – the desire to separate work and personal use and therefor have additional devices.

I’ve been looking at the UK market this morning and see that Phone 4U is rolling out 100 new retail locations this year. I understand that a couple of Australian telcos are also targeting retail footprint growth this year.

I mention this for consideration by newsagents looking for changes in-store this year and for additional traffic drivers. becoming a telco specialist will work well in some situations, especially high street and regional and rural situations. I know several newsagency businesses that are local telco destinations and they appreciate the new traffic this brings.