Specialty Toy Industry Trends
Are You Spoonfeeding Your Customers?March/April 2003
by Kari Anderson
Customer service is the cornerstone of specialty toy stores. It’s the trump card that independent store owners can use against their big-box competition. Of course customer service includes giving your customers what they want, or does it? What if your customers want to buy products from you that they’ve seen advertised on TV, or they want to buy toys that are violent in nature? What if they’re asking for movie-licensed characters or other items that could just as easily be found at the Wal-Mart down the street? Do you try to please your customers by giving them what they want, or do you spoonfeed them only high-quality, unique, educational, specialty toys?
The pie is only so big
Debbie Scholl, owner of FUNdamen-tally Toys in Houston, Texas, says that selling mass-market products to those customers who ask for them isn’t as simple as it sounds. “You have to ask, ‘Can we keep the customers we have and add on that layer of mass product?’ If you put in a section of Parker Brothers games, for example, you would have to take something else out because the store is only so big. Every now and then I get people requesting Scrabble or Monopoly, and I send them to Walgreens. I don’t want to commit thousands of dollars to carrying mass just to sell one game every two weeks.”
One thing that Debbie is wary of when it comes to dealing with mass manufacturers is the big investment she would have to make just to start carrying the products. “Recently, I was contemplating bringing Crayola in, but I had to guarantee that I would buy 10,000 pieces in a year. That was too big of a commitment. I’d rather buy in small quantities and turn the products more often. You can’t test the waters with mass manufacturers. You either have to jump in with both feet, or don’t go in at all.”
It’s not as hard as it seems
Miles Altman, owner of King Arthur’s Court Toys in Cincinnati, Ohio, devotes nearly 10 percent of his store to products from mass manufacturers like Hasbro, Mattel and Fisher-Price. He says that contrary to popular belief, buying from them isn’t as hard as it seems. While he admits that their minimums are higher, he says that the number of turns he can expect from these products justifies their purchase. “All of these mass brands turn faster than specialty brands. The turns on Fisher-Price are twice what they are on LEGO or BRIO. It might be a little harder to meet minimums with the mass manufacturers, but because the products turn faster, we know we’re going to sell them.”
An advantage to carrying mass merchandise is the brand recognition that customers have for these product lines. Miles believes that specialty stores can benefit from this. “Specialty manufacturers aren’t doing diddly to pull people into our stores. Mass manufacturers are working hard to create recognizable brands,” he says.
The mass products on the shelves of King Arthur’s Court are limited to classics such as Play Doh, Barbie, Magic 8 Ball, Lite-Brite, and Tinker Toys as well as games like Candyland, Scrabble, Pictionary, Scattergories, Mouse Trap, Chutes and Ladders, UNO, and Othello. “We concentrate on the core lines. We’re not trying to get the hottest, newest thing. The things that sell are the old classics,” Miles explains.
Is your inventory driving customers away?
Knowing who your customers are can help you in knowing what they want. “We’re selling to baby boomer grandparents and there’s a lot of nostalgia associated with classic mass-market toys,” he says. Because he knows that there’s a demand, Miles makes it a point to include them in his product mix.
“Hasbro, Fisher-Price and Mattel make high-quality toys too,” says Miles. “It doesn’t make sense to make customers go a mile away to buy something that they could buy here. Don’t drive your customers away by not carrying what they want.”
Diane Hale, owner of Playnix, Inc. in Englewood, Colorado, agrees. She suggests that the term “specialty” may be getting in the way of true customer service. “Are we customer-service oriented or are we hung up on ‘specialty’?” she asks. “We specialty retailers force customers to go to our mass competition when we don’t carry those items. I believe we’re doing a service to customers by carrying products that they want. Many of my customers don’t want to shop at Toys ‘R’ Us; they’d rather buy that TV-advertised toy in a specialty store.”
Dealing with an identity crisis
This begs the question, “Can you carry mass products and still be considered a specialty toy store?” Miles says emphatically, yes. “Specialty is not defined by product mix, it’s defined by the environment you create for your customers and the service you give them. I don’t think that we should give competitors the power to label us according to the products we carry. For example, if Target or Toys ‘R’ Us sells Playmobil or Rokenbok, it doesn’t make them specialty. It’s not what you carry that counts, it’s how you carry it.
“We haven’t lost any customers because we carry ‘mass’ merchandise,” Miles continues. “I’ve never had a customer say, ‘You’re not specialty because you carry mass products.’ They’re not aware of that label. We label ourselves.”
Differentiation based on product mix is getting increasingly difficult as more and more specialty manufacturers begin appearing in stores like KayBee Toys and Toys “R” Us. Diane Hale says that the influx of specialty products in mass-market chain stores doesn’t bother her. “I don’t mind Playmobil, Learning Curve, and ALEX being in Toys ‘R’ Us because the prices are the same as what I’m selling them for.”
What’s hard for her is when big box retailers mark down mass products that she’s selling too. “If the mass retailer has a sale, then you have to have a sale,” advises Diane. “If you order mass merchandise, you have to be able to sell it by October because in the mass stores, that’s when leftover merchandise goes on sale. If they lower their prices, then you have to too. A $5 difference is okay, but if it’s more than that, you end up looking foolish.”
What about guns?
One common characteristic of a specialty store is the lack of violent toys, but is it okay to carry play guns if that’s what your customers want? While some retailers, like Debbie Scholl, shy away from anything that resembles a firearm (including water pistols), others (like Diane Hale and Miles Altman) say that it all depends on the context.
“I carry toy rifles that are in the style of Davy Crocket and Daniel Boone,” says Diane. “We’re in the Midwest and these men were an integral part of our history. I’ve had some customers complain, but I say to them, ‘Where would we be without Davy Crocket?’ I suppose Playmobil’s pirates could be considered violent, too, but I think they’re cute.”
Miles says he hasn’t lost any customers because of the toy guns he carries. “We do carry Western cap guns, and they sell very well,” he says. “Customers will sometimes apologize for buying guns, but they still buy them. I don’t think it’s a horrible thing to do.”
Drawing the line
If specialty retailers are saying yes to carrying mass-market toys and certain violent playthings, then where is the line being drawn? What won’t they give their customers? Debbie Scholl and Diane Hale agree that when the products they carry start showing up in supermarkets and bedding stores, it’s time to rethink their strategy. “There’s nothing worse than seeing your product in the grocery store,” says Debbie.
Diane agrees. “When I start seeing my toys in Hobby Lobby or Linens & Things, it’s overkill. At least when I see duplication in Toys ‘R’ Us, it makes sense, but when I find a product of mine in stores that are totally unrelated to toys, then it isn’t ‘special’ any more. It becomes just another toy.”
Choose unique products to keep customers coming back
According to Debbie Scholl, better product selection within the specialty realm is the key to keeping your customers happy. “If you select great products, then you don’t have to fall back on carrying mass merchandise,” she says. “When I’m choosing product, I ask myself, ‘What am I going to say to a customer to get them to buy this?’ If I can’t think of a good way to sell it, then I don’t buy the toy.
“I’ve spent seven years developing my specialty business,” continues Debbie. “My store is known for its unusual toys, and changing it to include more mass merchandise would be like changing its personality. I don’t want to alienate the customers who come to me for specialty toys. I like being different.”
Selling a philosophy
Idanna Smith, owner of Juggles in East Greenwich, Rhode Island, has very high standards for what she puts on her shelves. She doesn’t carry mass products because her store sits in the same immediate area as a mass market competitor. “No matter what we brought in, it would be in their store,” she explains. Other items she doesn’t bother with include a violent TV-licensed products, guns, armor sets with swords, and action figures.
“Choosing what you want to present to your customers is an active decision,” says Idanna. “I promote healthy play for healthy childhood through toys that build confidence, enhance decision-making skills and teach conflict resolution.
“I’ve lost some customers because of this,” she continues. “A lot of people buy based on what they’ve seen on TV and what their kids want. We lose a percentage of customers who want to buy violent toys.”
Despite those customers who decide to shop elsewhere, Idanna is firm about her position. “We’re cultivating our customer base, and trying to convert them to what we think is healthy play,” she explains. “That’s why we use tag lines and train our employees as to the value of play. It’s a philosophical thing. It’s not just about what sells. We care about the child who walks in the door, not just dollar signs.”