Rethinking toys for what it's not: traditional, simple and static - Editorial

DSN Retailing Today, Feb 9, 2004 by Tim Craig

Go ahead. Call me a bleeding heart retail lover. I deserve it. Over the holidays, I brought my son and daughter to the local mall where we did all of our toy shopping at FAO Schwarz. And after we dropped a couple hundred dollars, my kids were ecstatic--and I was feeling pretty good about myself, having done my part to support an ailing retailer.

It's a funny thing with me. Like people who feel compelled to bring in stray dogs or call the police when an suspicious vehicle circles the neighborhood, I somehow view it as my civic responsibility to unload cash at dying retailers. When Caldors was on the ropes, for instance, I was out there buying up cheap sweaters and athletic wear like it was going out of style--which in the case of Caldors wasn't far from the truth.

But these days, buying into the notion that dropping a few hundred sheckles into a dying retailer can help resuscitate a chain--especially within the specialty toy sector--can be a costly habit. Just look at the recent holiday season. Had I known going into the holidays what I know now--that KB, Kids "R" Us, Imaginarium and FAO were facing dire situations--my habit of helping out struggling chains could have run up quite a costly toy bill; it may even have forced me to join KB and FAO in bankruptcy.

Unlike most consumers, though, I'm not looking at the toy retailing situation and lamenting about where to buy toys next year (like most people, I'll worry about that come mid-December). I am, on the other hand, genuinely concerned about the future of vertical toy retailing--especially in the wake of the massive toy shakeout of the recent holiday season.

Within the last few years, the editors of DSN Retailing Today have praised the efforts of many top toy specialists for reinventing their approaches to merchandising. We acknowledged Imaginarium for helping put educational retailing on the map. We recognized KB for staying ahead of the curve when it paved the way in out-of-the-box selling options by signing on as a supplier to Sears and CVS. We've called FAO a fresh alternative to stack-'em high and watch 'em fly retail.

And we lauded Kids "R" Us for offering a bold new children's apparel concept when it came on the scene some 20 years ago.

We were right to praise these efforts. The aforementioned retail concepts have all been aggressive in their merchandising diversification strategies. But their efforts have simply not gone far enough--nor has the critical voices from retail analysts and the media watching over them.

To think that coming up with creative new merchandising programs--no matter how innovative--is enough to take on and beat today's value-oriented, seasonally driven mass retailers is simply a low-probability gamble. The truth is, the big-box broadliners now own holiday toy selling, and the onus is on the specialty guys to take back the business.

Why they haven't succeeded is a complex issue. But for starters, the holiday season has grown too big for its own good. what started as an innocent game of ramping up promotional efforts and merchandise assortments during the frenzied holiday season, has turned into a one-dimensional market. So one-dimensional, in fact, that many consumers now view the holidays as the only time to get a good toy deal.

For vertical retailers that rely on sales year-round, this is an especially big problem because it plays to the strengths of broadliners, which can treat toys like they would a seasonal department: up-stock in peak season and collapse thereafter.

That's why the task of defeating seasonality can no longer be viewed by the toy market as just another strategy. It now has to be treated like a dire imperative. There have to be many more examples of "out-of-the-box" selling, such as KB's inroads in drug stores or TRU's involvement in grocery, and there have to be many more examples of stand-alone, year-round retailtainment concepts like Geoffrey. In short, if vertical toy retailing hopes to get out of its tailspin, toy retailers have to stop thinking like toy retailers and start thinking like juvenile entertainment businesses. Because no matter how hard you fight with traditional means, you can't fight Goliath with kid gloves.