Chatting with the Industry Specialty Toys & Gifts spoke with specialty manufacturers and retailers to get their take on marketing, merchandising, and distribution strategies; industry trends; and how they keep their customers happy.

Who is your target consumer, and how do How do you differentiate your store to at - Jonny Girson you engage them in your store? tract and keep customers? owner, The Learning Towles: Those who are thoughtful about the Girson: Our targeted consumer and customer Tree things they buy. They put effort into what they are possibly two different individuals. The Prairie Village, Kan. pick out, and seek unique and special items. consumer is anyone, though primarily chil - We engage them with knowledge (both about dren, who plays with toys. The customer is product and child development). We want to anyone who will buy a toy for “the consumer.” let them know the provenance of what we I would say our typical customer falls into two carry. The more info we have, the better they main categories: adults ages 25-49 buying for feel. their kids, nieces, nephews, and kids’ friends. The second, but growing, market is the grand - Holliday: Our target consumers are mothers parent: adults ages 50-75. We engage both and grandparents. We engage them in our store groups by having an incredible staff who re - Tim Holliday by following a sales process that is proven to late well with our customers. They’ve been owner, work. This process starts with a greeting; con - hired to develop a relationship with the cus - Children’s tinues on with dialogue about them, their fam - tomers. We educate our customers with World ily, and so on to help us get to know them and friendly staff and many open demos where we Sarasota, Fla. their needs; and then it goes to product infor - can explain the features and benefits of what mation and demos, which we are big believers we sell. in. We also do specific in-store play days and What do you see as the major trends affect - other events to draw people into the store, so ing your business in the year ahead? people do not feel like they have to come in just to buy something. We also have a U.S. Kimber: The major trend that we witnessed Post Office inside our store, which we oper - last year was the shift of business from spe - ate. We engage the customers from the post of - cialty retailers and mass merchants to online Tim Kimber fice while they are in line, by playing games shopping. We expect that this will continue into owner and with them, demoing product, and providing in - the coming year, as we have seen just the tip of president, formation about our store. The hope, of course, the iceberg when it comes to the potential of PlaSmart, Inc. is to convert these postal customers into toy online platforms. Customers enjoy shopping customers. And with free gift wrapping and in- online; it allows them to compare prices easily, store shipping, we make it about as convenient find their desired item quickly, and have their as it gets to take care of gift shopping, espe - purchases shipped right to their door. cially for those from out of the area. However, the novelty of toy stores re -

SPECIALTY TOYS & G IFTS S6 MAY /J UNE 2012 Rena mains; they are places where children, parents, a bit more to get a high-quality, high-perfor - Nathanson and grandparents want to go to discover and mance yo-yo at a fair price. They realize that a CEO, enjoy toys. Online retailers offer convenience, $3 yo-yo is not a good deal at any price if you Bananagrams, but visiting a toy store is a fun thing to do, and are looking for a good play experience or to Inc. offers a unique experience that is difficult to increase your skills. If anything, the party recreate online. Retailers should not be daunted favor and low-priced yo-yos out there only by the emergence of online shops; rather, they perpetuate an old stereotype of the category. should exploit the trends exposed by the online When a retailer says “my customers won’t pay world, and use them to harness the qualities $10 for a yo-yo” and then only sells $3 pieces, and benefits that make them unique. they are limiting that customer, the category, and their own sales potential. Nathanson: I think a big trend this year will David be toys and games that offer a variety of ways Quercia: End consumers are going back to the Quercia to play, as well as different levels of play, al - basics of wooden toys to help educate and de - vice lowing children to grow along with products. velop their children’s minds at an affordable president, This is paramount to us and is reflected in all price. This is a trend that Hape is definitely Hape Int’l, Inc. our current and upcoming games. We also ex - benefitting from because we provide all of it pect and hope to see more of the “less is more” in every aspect. philosophy that we practice when it comes to To stay competitive in the industry, you packaging. have to be able to also provide something unique that sets your company apart. Hape’s Rywolt: Building distribution: we are attract - product and development team is based in Eu - ing new customers in a broad range of retail rope, America, and . The combination categories, mostly stores looking to meet the gives us an edge by providing quality toys impulse needs of new or casual players. Even with different perspectives. Todd Rywolt better still, our existing customers are getting president, on board with our new “Yo to Pro” program, Towles: Stiffer competition from Internet flash Yomega Corp. carrying a deeper selection of Yomega items sites and big box stores. Devaluing of some core to meet the needs of the people coming to their brands due to price slashing via Amazon. stores. They are finding they can sell three or Growth of importance of “buy local” campaigns. four models to the same customer if they have yo-yos for increasing skill levels on hand. Girson: The Internet, the fact that it’s an elec - “Hot Pockets”: There are specific com - tion year, and the economy. munities around the U.S. that are jump-starting interest in active play and skill toys. Whole Holliday: I believe that old-fashioned, knowl - towns are nurturing fun alternatives to seden - edgeable service is something that more and tary play. Suburbs around Atlanta, New more people are looking for. The Internet will Claudia York/New Jersey, Michigan, and northern Cal - never go away, but there is a lot of rumbling Towles ifornia seem to have embraced yo-yos and about shopping local, supporting your neigh - owner, skill toys; it’s really been fun to watch. borhood businesses, shopping small, and so aMuse Toys Quality, not quantity: It sounds cliché, but on. Of course, we promote all of those things Baltimore, Md. we’re seeing that even in tougher economic too, as they are what we are all about. Big times, people want good value over just businesses, whether the big box or the big In - “cheap.” They are more than willing to spend ternet company, may get a lot of the news and

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such, but at the end of the day, it’s the small We have in-store events and participate in or case products to a wide, but targeted, audience of businesses that really contribute to the bottom sponsor many school activities and events. We toy retailers. Trade shows are used as an oppor - line of the communities they serve. Our busi - have been a sponsor of our local PBS TV station tunity to present new items, receive instant feed - ness has been fortunate enough to have survived for more than 10 years—advice I received from back, and be able to present each item hands-on. a lot of different economic climates, as we have a fellow ASTRA retailer many years ago. We do - It is always invigorating to see positive reactions been around since 1964. God willing, we will nate toys and gift certificates to numerous local to both new releases and to our classic products. continue to change where we have to, but still organizations whose main purpose is to improve It has been our experience that email newsletters provide the type of service that we are known the lives and development of children. are also very effective marketing tools used to up - for, and be a part of our community for many date our entire customer base of new arrivals, years to come. specials, and other product-related news.

What are you doing to drive consumers to your Nathanson: We have been very fortunate that store, not only during the holidays, but word of mouth has been, and continues to be, a throughout the year? very successful channel for us. One person plays Holliday: In addition to the free play days that one of our games with four or five others, and we do every other week, and our in-store post they all want the game after playing it. Addi - office, we are involved in a number of things that tionally, Twitter, Facebook, Pinterest, and other give us visibility in the community. We have em - social media tools are a great way for us to en - ployees who are involved with Boy Scouts, gage with our customers and for our fans to en - which gives us good publicity. We have adopted gage with one another. We want to hear what a local park, which the employees keep clean. our audience thinks so we can factor that into We work with a local Christian radio station, our new products, as well as to improve upon where we answer phones during their pledge our existing ones. And quite frankly, nothing drive. We also work with Goodwill, where we aMuse Toys makes us happier than to see all the photos of set up display tables at their events, and I am an creative and witty Bananagrams crosswords that ambassador for them, which is good for them Towles: In-store events. We host local authors, people send our way. and us. With Easter Seals, we sponsored the De - such as Puck ( 123 Baltimore ) and Ellen Lupton signSense international design competition for (D.I.Y Kids ). We partner with key vendors Quercia: Hape launched an aggressive market - the design of a toy or aid for those with sensory (Haba, Tegu, Blue Orange Games) to create spe - ing campaign for 2012 to re-brand and market disabilities. This event was new this year, and we cial events: family game nights (Game Univer - our products. The market has taken notice, and all agreed that it was so good, and has such good sity), Tegu Mobility Truck (Tegu Block Party). we have received phenomenal feedback and are potential, that it is now going to be an annual We also work with local non-profits (Casey benefiting from the increase in sales. event. In addition to these things, we publish an Cares, Baltimore Child Abuse Center, Water - The trade shows have also been helpful. information-based newsletter via email, and we front Partnerships) in furthering community They’re a great tool to gauge how the economy do a lot of things on our Facebook page. Both of awareness of their mission by hosting fundrais - is doing based on the attendees and the orders these are used to keep engaged with customers ing events, which we heavily promote through we receive. Hape will have attended more than when they are not in the store. social media outlets (Facebook, Twitter, blog - 50 shows by the end of the year. gers, etc.) and to the press. It all comes down to the parents who buy Girson: We’ve been a member of The Good Toy the toys, the kids who want to play with them, What marketing channels are most successful Group since its inception. We send out four cat - and whether they are all talking highly of the to you? How do you use them? alogs a year to an ever-growing mailing list. We product. That’s why Hape is very involved with also try to send out about two emails a month Kimber: We have found trade shows to be very mom bloggers and toy testing with kinder - and use Facebook and Twitter as often as we can. successful marketing tools, allowing us to show - gartens. Word of mouth is still very effective.

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Rywolt: The most effective marketing element some of our products, our play days, and other but also serves to put us in front of our key de - for us is the in-store experience. Yo-yos and skill things that are interesting and let our customers mographic: intelligent, thoughtful, and loyal toys are a highly demonstrable category, and get to know us better. Beyond that, we spend a consumers. stores with a good yo-yo or kendama player on lot of time making sure that we have all of our What is your distribution strategy when it staff will drive much stronger sales. Demon - events publicized the best way that we can. This comes to specialty? stration videos can help capture this, though not is one of the main reasons we do these events. as well as hands-on experience. We created Yo We get them listed on several Internet event cal - Quercia: Hape is committed to the specialty to Pro countertop display units that explain the endars, in a couple of local event publications, market because it is where the end consumers various levels of yo-yo as simply as possible, and some additional places. This has helped have one-on-one interactions with the retailers. showing where each of our yo-yos fits on that spread our reputation and bring in new The stores usually have a strong community scale. We also created simple icons for our pack - prospects. presence and exceptional service, and cater to aging to explain the features and benefits. This their customers. should take a lot of guesswork out of yo-yos for Hape has different product lines to fit a retailers and consumers, who in the past found large variety of markets, from the small bou - the category to be over complicated. tique stores, to the craft and educational stores, Social media is helping us create a relation - as well as zoos, museums, and aquariums. We ship with our fans and new players. We share in - are behind our product 100 percent, and our cus - formation almost daily on Facebook, Twitter, tomers, the retailers, know that. I personally and our new company website. This allows us to conduct sales training with the Hape sales team, get almost instantaneous feedback from our most as well as with the sales reps, to convey the mes - passionate customers. It also gives us a forum to sage of Hape’s products. reach players in emerging markets in , Asia, and , which have been more Kimber: We strive to provide product differen - challenging to reach in the past. tiation by offering items to the specialty market Trade publications and subscriber email initially and exclusively for a limited time. We blasts have been good tools for us to communi - appreciate the unique experience that speciality cate our new products, packaging, and sales pro - retailers offer customers, and we want to en - grams directly to specialty retailers. They courage this by offering them unique product provide an opportunity to share new messages and first-to-market items. and reinforce our branding. Nathanson: We have always had incredible What types of consumer outreach garner the support from the independents and mom and strongest response for your store? Are you uti - Towles: aMuse has a significant social media pop stores. We wouldn’t be where we are today lizing online options in addition to traditional presence. Our blog (www.amusetoysblog.com) without their loyalty and belief in our products. newspaper ads/flyers? reaches customers from around the world, as So our strategy, if you could call it that, is to Holliday: We do not really do traditional news - well as around the corner. We use that space to treat everyone like family; assume the best and paper ads or flyers. We focus our attention on offer our expertise and provide readers—both you get the best. our email list for our informational newsletter. current and potential customers—an insight to This provides parenting tips, fun facts, and other our mission of deliverying beautiful, purposeful Rywolt: We manage larger specialty customers things that we get good feedback from. We also play while showcasing many of our retail and in-house, and work closely with a wide network focus our attention on our Facebook page, community partners. Underwriting on our local of sales reps for the balance. Good reps offer spe - which we use to engage our customers and public radio station (WYPR) is something we cific expertise and relationships that our small in - prospects in fun ways with information about not only enjoy doing (supporting public radio), ternal team can’t replicate. We maintain an active

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do differently to cater to you and your cus - relationship with our reps, taking their advice on consumers are demanding. We know that people tomers’ needs? what is working and what needs to change. We are now factoring in the environment when it also try to join them for meetings with buyers comes to their standard of living and even when Holliday: Toy manufacturers can help us in sev - when possible, because ultimately we have the it comes to buying toys for their children or eral ways, some of which we are seeing more ac - deepest knowledge and passion for the product. It loved ones. tivity on recently, which is nice. Specifically, makes for the strongest possible presentations. Consumers, especially first-time parents, having and enforcing a MAP (minimum adver - are now more educated about the quality and the tised pricing) policy, free demos, low minimum Are you utilizing online retailing to grow your safety standards of toys. So Hape wants to make orders (especially to try new product), shipping business? Are you selling products direct to sure that the toys are safely produced as well as on time (not being backordered for extended pe - consumers, or through an affiliate, such as safe for the environment. All of our products are riods), and free or reduced cost items to support Amazon? produced with water-based paint and we have play days, as this is a great way to get manufac - Towles: We have an e-commerce website. At several collections that are produced with FSC turers’ products in front of customers. the moment it represents a small percentage of wood. We are aiming in the very near future to yearly sales. We are currently in the middle of have all of our toys 100-percent environmen - Towles: Back to basics. Foster a healthy re - changing our site to be completely integrated tally friendly. tailer-manufacturer relationship that empowers with the point of sale system stores to further their brands’ used in our store fronts (Mer - market penetration. Provide re - chantOS), allowing us to man - tailers with well-written and age site inventory more professional-looking marketing effectively and have an online materials to share with staff and presence that better represents consumers. Help retailers be - our brand. come true brand ambassadors. Be more transparent about dis - Holliday: We do not actively tribution plans. Are they spe - sell any toys on our website. cialty only? Will they be Our site is used for informa - dropping inventory on flash tional purposes only. The only sites or big box stores at any online sales we have are from Children’s World point during the coming year? our participation with the Do they have MAP policies? Shopatron network, and from customers who Girson: From time to time we see various Will they enforce them? With more information, may or may not have went to our site, but call us “buzz-words” or “hot topics” coming up in our we can make more informed choices about what to have us pick out a gift and either ship, or have industry. Though our customers are more aware we choose to carry. ready for them to pick up. Just yesterday, we had of environmentally friendly toys, I believe that Are you seeing an increase in technology-dri - a person call in, and we took care of three birth - for the most part this is only one factor in their ven toys in your store? Do you feel that tablets day gifts that our staff picked, all over the process of choosing which toys to buy. A couple and app-based products will have a greater im - phone. The customer came in today, picked up of years ago, “green” was very in. Now it’s just portance for holiday 2012? their gifts, and was on their way. another available category, as is “Made in America.” Though many would like to buy Girson: Yes, I do see an increase in technology- Is there a greater demand from your customers green toys, or those made in the U.S., pricing is driven toys, but have to say, I still think, in the for environmentally friendly toys? Are they be - usually more of an overriding factor in the de - big scheme of things, toys are far more valuable coming a bigger part of your product mix? cision-making process. when kids are using their own imagination and Quercia: Hape not only agrees that it’s better to creativity rather than having the electronics do What would you like to see toy manufacturers “go green,” but we want to provide what the end all the thinking for them. That’s not to say we

SPECIALTY TOYS & G IFTS S12 MAY /J UNE 2012 have our heads in the sand and refuse to em - selling in their stores, or witnessing which read the immediate reactions of their fans. brace technology. I am selective, and will only trendy toys the kids are playing with these days, bring in product that falls within my general se - it’s all useful knowledge that helps me keep up Nathanson: It’s a combination of reading trade lection criteria of quality, usefulness, longevity, with the industry. resources, listening at all the toy/game and trade and value. We are waiting for some tablet app- It also helps that Hape is a member of sev - fairs, and talking with our customers, both re - based games to come in. Though I expect to sell eral toy associations, so I take advantage of the tail and consumers. a fair amount, I do not see technology-driven benefits that come along with having those products being a major percentage of what we memberships; read all the newsletters and mag - Kimber: In order to keep tuned into the pulse of sell in the foreseeable future. azines, attend networking events, and most of the consumer base and the industry itself, we all, keep in touch with other members. rely on websites and newsletters for informa - How do you keep abreast of the latest trends tion. We are always networking within the in - in the toy industry? Rywolt: We read publications like The Toy dustry, with industry events and trade shows Quercia: Being in this competitive industry, Book and the ASTRA newsletter regularly, and becoming the cornerstones of many productive you have no choice but to stay on top of your get our up-to-the-minute news fix from online relationships. These elements are all tied to - game. Whether it’s information that I receive sources. Another great resource are the toy fan gether by memberships in industry associations. from renowned designers and inventors, to the pages on Facebook, where companies share We rely on ASTRA, NSSEA, and TIA to keep G feedback from my customers of what items are their latest introductions and you get to see and us in the loop.

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