State of the Industry Kathleen McHugh President, ASTRA
Jay Foreman President and CEO, The Bridge Direct
How did the specialty toy industry fare in 2013? What is your outlook for 2014? The numbers from independent specialty retailers are not yet in as we go to print, but in general there is an optimistic feeling among ASTRA members. Anecdotally, the buzz is that 2013 was a better year and ASTRA retailers saw some of that 4.2 percent increase in overall retail sales in 2013. The positive signs in the economy for 2014 are encouraging, and I would expect to see our members focus on their sustainable competitive advantage, which is that they offer customers top-quality products and excellent customer service.
The industry has seen a surge in tech toys and youth electronics. In what new ways are you incorporating technology into your product development? We’re not doing it in too many ways. This story is written every few years and maybe with the exception of Furby, high tech in traditional toys doesn’t work. However, we are still marketing Simon, Lite-Brite, and View Master, which were all low-tech toys that have been in the market for years. Even interactivity in dolls and feature plush is no big deal. Give the child a basic sound chip and/or lights and mom a great value, and you’ve got a happy consumer. Tech will come and go—think Intel or Microsoft, Barney, Iz, or Dream Play. Kids and parents want to see play separated from a traditional toy and an iPad, in my humble opinion. I’m just old school—I still have a BlackBerry!
What trends in the toy industry are affecting specialty retailers in a positive way? While competition from online retailers continues to grow, consumers have not reduced brick-and-mortar stores to involuntary showrooms. Certainly, some customers pull out their smartphones in ASTRA stores and make their purchases online to get the lowest possible price, but the problem is not as extreme as we feared it would be. I think this speaks to the service specialty stores provide and the relationships retailers build with many of their customers, which generates loyalty. Our retailers are getting smarter about how to make their stores into destinations so customers keep coming back. What are the biggest challenges for specialty retailers and how can they be addressed? Owning a small business is tough work. Sometimes the biggest challenge is sustaining your energy and passion. In fact, we will feature a closing keynote at our Marketplace & Academy in June that focuses on this issue so we can send retailers home with strategies to enjoy their businesses rather than be slave to them. Another big challenge is that we still have not achieved sales tax fairness. It’s hard to compete if you have to impose this cost on customers while your online rivals do not. We are participating in efforts to bring the fairness message to Washington.
56 • THE TOY BOOK
Is enough emphasis being placed on creating new kids’ entertainment properties that can translate into successful toy lines? There is never enough, but in the end the consumer and the child only has so much bandwidth to go deep. If Doc [McStuffins] and TMNT are sucking up the oxygen, you have to just get ready when they exhale a bit to come in with something new. We can’t see enough great concepts, but there are only so many that can break through. What measures have you taken to keep pace with consumer technology expectations? To me, it’s social media outreach. We just want to make sure consumers can get information about our products quickly and easily, from where to buy them to what they do. Remember, a child doesn’t understand the technology in an iPad—they just know it’s easy to use. That’s the secret. Making things that are easy to use, easy to find, and easy to buy.
FEBRUARY 2014