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China Syndrome

What retailers are doing to protect customers—and their businesses

By Karyn M. Peterson -- Playthings, 10/1/2007

Ever since this summer's recalls involving China-made playthings, the mainstream media has been stoking a frenzy of concern over the safety of toys and children's products—and retailers have been bracing for impact. Fortunately, mass-market chains have welcomed consumers' heightened awareness, seeing an opportunity for dialog, while many specialty toy stores are actually reporting steady (and, in some cases, much stronger) business recently.

To keep customers informed, retailers like Toys “R” Us and eToys.com/KB Toys have added safety sections to their websites, while FAO Schwarz customers curious about toy recalls can find an interview with CEO Ed Schmults and the latest safety information on its site. Amazon and eToys take it a step further, notifying customers by email if they have ever purchased a recalled toy. Specialty retailer Fat Brain Toys offers a detailed list online of where all of its products are made. These efforts, retailers hope, will help keep consumers confident in the industry throughout the critical holiday shopping season and beyond. And for specialty stores particularly, this outreach to shoppers both old and new is already working out very well.

Specialty holds steady

“We have had a surge of people we have never seen before,” Gary Green, owner of North Carolina's Toy Box of Asheville, says of his business recently. “I think people are searching for more quality options now. They've finally learned that there is a danger to the lowest price provider, and so they're looking for things that not only are not made in China, but are better quality than they're used to finding in the big stores.”

Toy Box now laminates all information provided to it by manufacturers on their safety protocols, and displays it right on store shelves—whether the toys are made in China, Europe or the U.S. Some customers, though, “just don't want anything made in China anymore,” Green says. However, “We try to explain to them that there's thousands of manufacturing facilities in China and the problems aren't with all of them,” he notes. “There are some really fine manufacturers there, and we're proud to have their products.”

Green points China-wary customers towards U.S.- made toys (like Yomega yo-yos), European toys (like Haba) and green toys (like Plan, whose Thailand-produced wooden toys are eco-friendly.) “There are people that are just dying to open up a door of a store and find everything made in America just like it was 30 years ago, but it's not going to happen,” Green says.

At The Wooden Horse, Los Gatos, Calif., “Our business is going up, that's for sure,” manager Genevieve Collonge says. “We're definitely looking into more products that are made in different countries … it's so sad to see grandparents come in and their daughter-in-law or son-in-law has said, 'okay, nothing made in China comes in the house.' It's very restricting.”

Since so many customers are now paying much closer attention to what they're buying, the store has compiled a safety binder of manufacturers' statements, tests results that they have made available to retailers and information from the Good Toy Group, Collonge says. “We've photocopied that information hundreds of times and we're happy to do so. You don't have to buy anything. We just want people to calm down and we want to reassure our customers that we only buy from companies that are good watchdogs.”

Euro toys get a boost

Tom Levin, owner of Tom's Toys in Great Barrington, Mass., has had similar experiences. “Some people are very reactive, who won't buy anything that's made in China, which is extreme. That's not typical, but we do get that … it seems to be more of the grandparents.” As a result, “I think we're going to see all those European toys doing better this fourth quarter.” German-made Playmobil and Bruder toys are already big at his shop, and he recently created a display of additional American and European products for his customers, “just to show that, if they're worried, there are options.”

Miles Altman, owner of King Arthur's Court in Cincinnati, also makes a point of providing customers with detailed information from manufacturers, and, when asked, guides buyers to European-made or American-made products. Perhaps not coincidentally, since the recalls, “Our sales are up significantly … Our September has been really strong,” Altman says.

The same holds true for Steve Shelton's Magical Moon Toys in Logan, Utah. “Our business is probably up about 10 percent over last year,” he tells Playthings. And although some of the store's Thomas & Friends items were included in Learning Curve's recall earlier this year, the impact on sales was “very minimal.”

“I've had a few people come in and express their concerns about other toys in our store, but it hasn't been a widespread phenomenon,” Shelton says. “I've had maybe a small handful come in specifically trying to find something that's not made in China.” And since Playmobil and Bruder have always been popular at his store, he is well-prepared for demand, Shelton says.

Retailer responsibility

Shelton adds, “Most of my mainstay companies have sent out letters saying that they are rigorously testing their products and telling me that they're safe, and so I'm relaying that to my customers … if someone comes up with a Melissa & Doug product, and says, 'This is made in China, are you concerned?' I'll say, 'If I was concerned about it, I wouldn't have it on my shelf.”

The key to success is forging this trust with your customers, agrees Shirley Reilly, owner of Let's Play, Hillsboro, Ore. “We've definitely had a lot more people asking questions … we've had to explain that companies like Melissa & Doug have their own factories, and they're monitoring the quality and they always have. They're safe and always have been.” Reilly adds, “I've made a list of what we have that's made in the U.S. and Europe, [but] I try at first to convince people that you don't really have to boycott Chinese things.”

According to Kathleen McHugh, executive director of the American Specialty Toy Retailing Association. “At the onset of the recall crisis, retailers were primarily concerned for the well-being of their customers and getting the word out to them about any toys that might have been involved.” She adds, “We all agree the toys we sell should do no harm. We are committed to ensuring that our members are aware of their obligations during a recall and the steps they need to take to remove products from their shelves. We are also working with TIA to make sure our manufacturers are aware of their obligations under the current standards.”

ASTRA offers safety testing information from member manufacturers on its site as well as talking points for retailers, and will host sessions to discuss safety issues at its Marketplace 2008 conference.

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