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Remember the days before Wal-Mart had over 3,300 stores blanketing the country? Back when educational toys and other consumer products were purchased on Main Street, business seemed easier and life was slower. Now discounters are grabbing big market share, consumers live fast lives, and post-September 11th jitters have changed our behavior. For specialty retailers and manufacturers to succeed, they must be best at what differentiates the specialty niche.

Product innovation is king

Retailers, manufacturers and reps agree that innovative product drives parents, teachers and others into stores – and keeps them coming back.

According to Laurie Eberhard, Learning Express owner in Dayton, Ohio, many consumers shop both specialty and mass because “the (educated, upscale) parent is doing it all. They don’t want their child to miss anything.”

Frank Adler, vice president of sales and marketing at Uncle Milton Industries, agrees, adding, “Retailers need to look at the excitement and creativity that a product line brings into their store.”

How can retailers identify the latest innovations? Rick Ludwig, vice president at ACE Educational Supplies in South Florida, says his number-one source is knowledgeable sales reps. Major trade shows, like Toy Fair and NSSEA Ed-Expo, vendor e-mails, samples, and catalogs are also important. Kathy Prestia, store manager of CM School Supplies in Southern California, says, “I’m looking for products that are significantly different, with a fresh look and a new approach.”

Manufacturers are increasingly using websites to make it easy for retailers to find and buy these innovations. They include retailer locators to help consumers find local stores, and many, like www.folkmanis.com, also include extensive awards lists that testify to a brand’s break-through qualities.

Retailer-manufacturer partnerships

Kyp Henn, a veteran sales rep and former toy retailer, says that manufacturers and retailers that offer guarantees help build everyone’s business by creating loyal customers. This guarantee – accepting product returns if there are any problems – is an official policy at Learning Express stores and at some vendors, including Hagerstown, Indiana-based Tedco, Inc.

Communication is critical for any successful partnership. Most manufacturers welcome retailer calls and e-mails and will use this feedback to improve product, shipping and other operations. In addition to regular mailings, faxes and calls to retailers, many educational supply and toy companies are taking advantage of new opportunities for dialogue with stores by teaching retailers “how to play” with their brands in learning workshops held during industry conferences like the ones sponsored by ASTRA, Thoroughbred and NSSEA.

Trend spotting

The Darwinian adage “Adapt or die” defines specialty retailing today. Take a close look at recent trends like post-September 11th cocooning, increasingly time-starved consumers, the hourglass economy and, of course, Wal-Mart’s blistering growth to over $200 billion last year. How can your store take advantage of these changes?

With more families staying home after September 11th, they’re looking for more at-home entertainment, including toys and games – your store can satisfy their needs. Helping consumers find the right product quickly is something Wal-Mart fails at – when you do it right, this will create solid repeat business for your store. Debbie Aaron, owner of ZZ Toys in Fernandina, Florida, agrees and says there’s another reason that it’s more important than ever to make sure shoppers get the right product: “Kids stay at a play level a shorter period of time now, so retailers must know the product better, play with it and train their staff.”

The hourglass economy is polarizing retailing to the mass and upscale markets. This means your store can stand out at the high end by offering the best product, great service, super-fun special events and other value-added, time-saving experiences not available at big box stores.

There’s a reason some specialty stores succeed wildly, while others disappear. With the specialty retailer’s dedication to carrying a variety of innovative new products, and to providing the best service along with a compelling, trend-savvy shopping experience, this breed of store is here to stay.

Susan E. Reynolds is president of SR Marketing, a Walnut Creek, California-based public relations and marketing firm. Her agency is a leader in building favorite children’s and family brands, and was recently named a “Top 20 PR Firm” by the East Bay Business Times. Results include client sales increases of up to10 times industry averages, and client brands that achieve best seller status and national awareness through major media coverage, web and video services, and other non-advertising brand strategies. You can reach Susan at 925-932-7675 and sreynolds@gosrmarketing.com.

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Top three tips for turbulent times

#1 When was the last time you, as a consumer, felt really taken care of at a big box store? Probably never. That’s why customer service is the specialty retailer’s key to success in today’s economy. Rick Woldenberg, president and CEO of Learning Resources, a Vernon Hills, Illinois-based educational toy manufacturer, observes, “Specialty is impregnable. Discount retailers can’t terminate the market need for high-service stores with innovative product.”

#2 Keep customers involved with your store and products. Manufacturers, including BRIO, PlastWood and Action Products International will work with your store on creating Play Days, informative demos, special contests and other sales-builders. Learning is fun. Make your store fun with out-of-the-box toys, giveaways and changing displays that draw customers in to try products.

#3 Keep your store fresh, exciting and easy to shop. Featuring manufacturer-provided point-of-sale materials that highlight press coverage endorsements and awards for specific items helps your customers find the best quality product for their child or classroom. Make sure you send customers monthly mailers and/or e-mails that make it easy for them to shop your store. Announce special events, promotions, the latest products and special services like gift-wrapping and shipping.