Educational toys boost sales for the intelligent retailer

Discount Store News, July 26, 1999 by Cecile B. Corral

A strong dichotomy is emerging in the toy industry. On one side are those who worship light sabers, turbulent video games and rowdy wrestling icons. On the other side are those who promote creative, non-violent play patterns that encourage wholesome learning experiences.

Caught in the middle are the retailers that want to please their every customer, whether it be with action figures wielding swords or with water-based finger painting kits.

The catch is how much valuable shelf space to devote to the educational and developmental toys, which very often are produced by little-known manufacturers, in the place of glossy, licensed products with blockbuster movie hits behind them.

Major discount chains such as Wal-Mart, Kmart, Target and Bradlees seem to be playing it safe for now, riding the wave of the entertainment-licensed action figure trend and heavily pushing summer seasonals, such as plastic kiddy pools and water guns.

Yet all the while, specialty toy retailers such as Connecticut-based Smart Kids Toys are thriving with sales of educational toys "for curious kids."

"Some of the mass market toys you just can't avoid," Mary DeSilva, owner and president of Smart Kids Toys, told DSN. "But parents and grandparents always are searching to give their children and grandchildren more valuable playthings they can learn from, as well."

Sticking its fingers into every pie is Toys "R" Us. Most of the chain's existing units still offer a very limited educational toy selection. At one of its Manhattan stores, toys with educational or developmental value are buried behind the glitzy toys emblazoned with popular licensed logos. But at its Alpharetta, Ga., prototype unit, customers are getting broader selection with a wider spectrum of categories. The new C3 prototype, which is expected to e fully rolled out chainwide by 200O, features the new "Learning Center," where parents and children can find educational, tutorial and creative toys that promote learning and that usually don't carry glossy brand name with a hefty ticket price.

At the TRU annual meeting in June, Keith Van Beek, executive vp and president of merchandising and marketing for the store's U.S. toy division, explained to vendors and investors that after conducting research, TRU found that the learning market is growing by 10% to 15% annually. He said that TRU will take advantage of that opportunity by not only stocking the department with a wide array of learning toys and aids but also adding interactive areas for parents and their children to sample merchandise before buying it.

"A lot of the bigger guys are going into the educational market, trying to reach teachers and parents who have educational concerns for their children and students," said Joe Gardner, vp of sales and promotions at Child's Play, a Maine-based manufacturer of educational books, games and audio-visual material. "We are definitely seeing the growth area in our business coming through the discount store market, and I think it's a result of the changing buying power of customers and the fact that many more people are shopping in discount stores."

Child's Play, which has been producing educational toys for children since 1972, sells products to Wal-Mart, Kmart and Target, as well as a long list of local and regional specialty stores.

But some newer manufacturers often find it hard to break into the mass retail market. Specialty stores will traditionally welcome negotiations with these newcomers to the toy industry because of their unique product selections.

"They are our bread and butter because they give us the products that make us specialty stores," DeSilva said. "They make the toy field interesting with their different products."