Ready For The Holidays?
Toy retailers ponder their fourth quarter plans and talk about their expectations
By Pamela Brill -- Playthings, 10/1/2009
As toy retailers ready for the all-important fourth quarter, the hope is that consumers will bring glad tidings—and their pocketbooks—to their stores this year. Playthings spoke to retailers across the nation about their expectations for the upcoming holiday season and how they'll use what they've learned from last year to better their business this time around. Here's what they told us.
What are your projections for the 2009 holiday season?"Learning express is expecting to see modest comparable store sales growth, tempered with improved gross margin and turnover."—Sharon DiMinico, Learning Express, Devens, Mass.
"Creative kidstuff will be celebrating its 27th year and we are projecting a solid holiday season. We are expecting sales comparable to last year, as consumers seem to have settled into their new realities. We believe purchases will be very focused and planned—not as much room for impulse. Consumers will want quality products that offer much more play time."—Roberta Bonoff, Creative Kidstuff, Minneapolis
"We expect that parents will still want to spend on toys for their children, but they will be careful about how much they spend and they will definitely be looking for value. This year, parents will define value as product quality—toys that entertain for months, not minutes—and brands they trust."—Julia Fitzgerald, Sears Holding Corp., Hoffman Estates, Ill.
"We are projecting store sales to increase 2 to 5 percent in the fourth quarter. We expect our alternate channel sales (eBay, Amazon, ShopATron and our website) to increase 50 to 75 percent. Although our roots are 'brick and mortar,' our online sales should be about 12 percent of total."—Miles Altman, King Arthur's Court Toys, Cincinnati
"Our sales have been running approximately 7 percent over 2008 for the first eight months of 2009, and therefore we are forecasting a 7 percent increase in holiday sales. We have been cultivating a fledgling Web store during the past year. It has begun to grow in sales during the past couple months, so we are hopeful that MyFavToys.com will add 1 to 2 percent as well."—Samuel and Suzanne Cox, My Favorite Toys, Carbondale, Ill.
"We hope to be on par with last year." —Sallie Kashwa, Timbuk Toys, Denver
"I am very cautious about the upcoming holiday season. We are still hurting greatly from the economy. I am hoping to see the same numbers as 2008, which were down from 2007 but not horrible. If we can achieve the same numbers, I will consider it a successful season."—Lin Hanzelko, Timmy's Toy Chest, Lake Mary, Fla.
"We have been very fortunate; our sales are up 12 percent so far this year. In August, we were up 23 percent, so we expect our 2009 holiday season to reflect our year-to-date sales of up 12 percent."—Fred Rosenberg, Toys & Candy, On the Park, Kingwood, Texas
"I expect things to rebound significantly from last year. While the economy has not rebounded significantly, it has stabilized somewhat and I expect consumer confidence to reflect that. That should allow us to springboard into even greater progress in 2010."—Brent Taylor, Brilliant Sky Toys & Books, Lansing, Mich.
"I'm expecting it to be a great season. I'm looking forward to 'the year after the September of the economic turndown.' I'm projecting a 5 percent increase—minimally—over last year." —Elaine Hackney, Boing! JP's Toy Shop, Jamaica Plain, Mass.
"We expect our sales to be lower than last year, as has been the trend throughout the year. Our shop is based in a small city that has been deeply affected by state budget cuts as well as the general economic crisis. We are planning our inventory accordingly and have been steadily ramping up our stock in order to avoid big bills later." —Laura Miller, Imagination Village, Concord, N.H.
"We learned that mom really appreciated the Kmart Lay Away program that gave her another tool to provide Christmas for her family without breaking the bank." —Julia Fitzgerald, Sears Holding Corp., Hoffman Estates, Ill.
"Consumers are looking for value in every purchase. They are educating themselves, researching products and pricing online. With the consumer's product knowledge and our competition in mind, Learning Express' focus this holiday season will be on key price points, promotions and exclusive products." —Sharon DiMinico, founder, Learning Express, Devens, Mass.
"Simply that I have to shake it off. If I let last year's results have too much influence on this year's strategy, it just becomes a self-fulfilling prophecy. I believe it is critical to operate on the expectation of success. To do otherwise would ensure failure."—Brent Taylor, Brilliant Sky Toys & Books, Lansing, Mich.
"More than ever, it's important that I manage my inventory as tightly as possible. We always talk about just-in-time buying and keeping a watchful eye on each category. The 2008 season exemplified how critical—and valuable—it is to manage inventory well." —Elaine Hackney, Boing! JP's Toy Shop, Jamaica Plain, Mass.
"Price point will be critical to decision-making, especially this year; people are looking for exceptional value in every purchase. It is also critical this year that we, as retailers, are completely informed on safety issues, as our customers depend on us to do the homework so that they don't have to worry." —Laura Miller, Imagination Village, Concord, N.H.
"The primary lesson re-learned in 2008: If you don't have it in stock, you can't sell it. Through August 2008, we were up 10 percent over 2007 and had ordered accordingly for the fourth quarter. We decided to let the product come. Although we didn't maintain the earlier pace, we did end up for the year and slightly up in the fourth quarter. Had we slashed inventory, as many stores did, we would have been down." —Miles Altman, King Arthur's Court Toys, Cincinnati
"First, we learned that, especially in a relatively small, rural market, a short-framed advertising blitz for a holiday item on which we are counting isn't enough. In short, we learned to start selling the "idea" for specific gifts in July. We also learned that we should have done more to increase sales in early to mid November, given that Thanksgiving and Black Friday were very late in the month, leaving a shorter number of selling days between Thanksgiving and Christmas."—Samuel and Suzanne Cox, My Favorite Toys, Carbondale, Ill.
"I am ordering with a lot of caution. I am trying to bring in new items, but only ones I am truly confident about or have sales track records from other stores. I am trying to make sure that I am not out of any of my sure sellers. I don't want to miss out on any sales." —Lin Hanzelko, Timmy's Toy Chest, Lake Mary, Fla.
What will you be doing differently this holiday season as compared to holiday seasons past?
"This year we will stay focused on making it easy for mom to put together a Christmas that counts at Kmart. We added another tool for her to save for Christmas, the Kmart Christmas Club. We will also merchandise all of the hottest toys both in store and online, so mom can shop how and when she wants." —Julia Fitzgerald, Sears Holding Corp., Hoffman Estates, Ill.
"It's all about focus at this point. We will be narrower and deeper in our inventory, and focus on our best-sellers and hot new trends. We're counting on our tried-and-true products to see us through." —Sharon DiMinico, founder, Learning Express, Devens, Mass.
"More conservative purchasing. More social networking and marketing that can be done without spending a lot of money. We opened a new store this year so we will keep a lot of focus on the logistics of inventory disbursement between three stores. We will be sure the staff at the new store is prepared for a level of work they have never experienced or imagined." —Sallie Kashwa, Timbuk Toys, Denver
"We will be continuing to offer fun events for children to celebrate the importance of play. We are reducing the number of products in our catalog so that we can offer a more rounded merchandise assortment. We will place an even larger emphasis on the message that we are an efficient, experienced and effective resource for parents to shop for their children." —Roberta Bonoff, Creative Kidstuff, Minneapolis
"[I learned] very little. Last year's numbers were a result of a 'perfect storm' of economic pressures, not a result of our strategic decisions. I think the almost universal consistency of sub-optimal results across the industry bears that out. That being said, all of our marketing efforts are a fluid process, and we're always tweaking things to find that perfect balance of product, price and promotion. I just don't believe that balance has changed much." —Brent Taylor, CEO, Brilliant Sky Toys & Books, Lansing, Mich.
"On a personal level this year, I'm going to focus on how much kids anticipate the whole holiday experience, then strive to convey that to my customers. For the merchandise side of things, I'm looking at what I learned this year through ASTRA. At the ASTRA conference this year speaker Bob Neegen talked about various "small" promotional things that can add up to lots of new customers. One success he had was distributing $5 coupons at various events in surrounding communities. We want to go with that. We'll also be stepping up our communication via e-mail and Facebook." —Elaine Hackney, Boing! JP's Toy Shop, Jamaica Plain, Mass.
"This year, we will bring in a select assortment of brands that are more typically found in the mass market. People come to see us first because they know they'll receive top-notch service, but if we don't have the product their grandchild put on the wish list, they inevitably go to the competition. We will also be doing more email marketing." —Laura Miller, Imagination Village, Concord, N.H.
"In past years we have invested in newspaper and radio advertising throughout the season. We will still have a significant traditional media presence immediately before Black Friday, but we'll put more energy this year into our newsletter, mailings to schools, etc. We also plan to do more in-mall advertising so we don't get lost in the "every weekend is the greatest sale of the year" bind into which department stores have gotten themselves." —Samuel and Suzanne Cox, My Favorite Toys, Carbondale, Ill.
"I will probably look to create more offers, coupons and special events since they are truly drawing in the customers now." —Lin Hanzelko, Timmy's Toy Chest, Lake Mary, Fla.
"We are producing our own holiday catalog. This will triple our distribution, customize the selection of product and services, give us the opportunity to make last-minute changes on product, keep money local and reduce our cost of production." —Fred Rosenberg, Toys & Candy, On the Park, Kingwood, Texas
| Online-only Content What do you expect to be your biggest challenge this holiday season? “It is always a challenge to stay in stock with the hot toys up to the very end of the season. To combat this, we’ve planned our replenishment to handle demand on even the hottest toys.” — Julia Fitzgerald, Sears Holding Corp., Hoffman Estates, Ill. “With the uncertain economic environment and new testing regulations, our suppliers’ inventory levels may be unpredictable. Therefore, the biggest challenge will be keeping our key sale drivers in stock.” —Sharon DiMinico, Learning Express, Devens, Mass. “We see that our vendors have planned their inventories very conservatively. Therefore, the forecasts that we have place on goods need to be right. We want to be accurate so that we give our vendors the right information and we can all maximize the inventory turn for the fourth quarter. Retail has—and always will be—the right product at the right time.” —Roberta Bonoff, Creative Kidstuff, Minneapolis “My biggest concern is probably stock availability at wholesale. If manufacturers are hedging their bets based on last year, inventories could be lighter and that could mean lost opportunity at retail as we get deeper into the season. The advantage will go, as it always does, to the retailers that assume a little greater risk on early buys—provided they guess right on what to buy!” —Brent Taylor, Brilliant Sky Toys & Books, Lansing, Mich. “Staffing is always a challenge through the holiday season. We need to bring on more staff to get the job done. But we need the right people who can get it done while maintaining the upbeat tone we want throughout the season. And then there’s always the challenge of balancing work and the other important parts of life–and enjoying the season with my own family and friends.” —Elaine Hackney, Boing! JP’s Toy Shop, Jamaica Plain, Mass. “We can't compete on price and that will always be our biggest challenge in a down economy. Many people rate the ‘success’ of Christmas on the number of gifts or the size of the boxes their budget will provide. We work to educate our customers on the value of play and appropriate developmental toys. We win over customers showing then the value of purchasing high-quality toys that will last for years.” —Laura Miller, Imagination Village, Concord, N.H. “Our primary objectives for 2009 are to: ensure adequate stock levels, maintain employee enthusiasm, aggressively buy for and promote our alternate channel business and keep a watchful eye on all competitors’ pricing.” —Miles Altman, King Arthur’s Court Toys, Cincinnati “Perhaps our biggest challenge is to find the most successful mix between smaller gifts and larger ticket items. During the first eight months of 2009, our sales have been up but our average dollar amount per transaction has been down, a trend we must prepare to encounter this holiday season. Customers are obviously watching their dollars more closely. So it’s critical that we find the product mix offering gifts that are strong quality, creative, fun and reasonably-priced. It’s important to merchandise and personally sell these reasonably-priced items so that customers feel good about their holiday shopping and so that we also survive. This will take planning, hard work and good fortune. Another challenge will be mitigating the ongoing media headlines about how consumers are reluctant to spend: the self-fulfilling, hand-wringing syndrome. A third challenge will be again dealing with a calendar that gives us a late Black Friday, therefore calling us to maximize November sales.” —Samuel and Suzanne Cox, My Favorite Toys, Carbondale, Ill. “Maintaining a great selection, while working with a restricted [open to buy] budget.” —Sallie Kashwa, Timbuk Toys, Denver “Getting the customer in the store and leaving with packages. Since I am ordering fewer quantities, I am concerned whether last-minute reorders can be filled in a timely manner if needed.” —Lin Hanzelko, Timmy’s Toy Chest, Lake Mary, Fla. “The right inventory, the right levels of inventory, the right priced inventory.” —Fred Rosenberg, Toys & Candy, On the Park, Kingwood, Texas |
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