Steven Reece

Speaking At Spielwarenmesse: Toy Business Forum 2013

Steve will be giving the first program presentation at the Toy Business Forum in Nuremberg, at Spielwarenmesse 2013.

Steve will be on the podium in Halle 4, at 13:10, Thursday 31st January 2013.

The topic of Steve’s presentaiton will be: The Future of Toys: Which trends do we expect in 2020

The presentation is free to attend.

Steve will be around for 30 minutes after the presentation for a quick chat / introduction. If you’d like a longer meeting, please email our central email: steve.reece@vicientertainment.co.uk highlighting what you wish to meet about during the show, and we’ll see if we can fit you in!

Click here for more details: http://www.toyfair.de/highlights/toy-business-forum/day-1/?L=1

The Great Big Christmas Charity Toy Industry Reports Bonanza!

Christmas charity sale on our Toy & Game industry reports…

We’re offering the full collection of our Toy & Game Industry reports as a special offer this week to raise money for an amazing charity doing fantastic work with disabled kids.

The offer includes:

- The Practical Gude To Doing Toy Business In Europe.

- How To Grow Your Toy Distribution.

- How To Win Top Toy Licenses.

- The Practical Guide To Doing Toy Business In North America.

- 55 Features of Top Selling Board Games.

The normal selling price for all these reports is $1,400 (check out www.stevenreece.com/shop)

The offer is just $397 for all of these, plus free remote Consultancy work from me thrown in.

The offer is open until Friday 7th December, and we only have 11 on offer.  Once we sell all 11 we are done!

Click the link below if you’d like to check this out…

http://www.justgiving.com/Steve-Reece1

New Toy Distribution Paradigms

There are many cynical, wizened old souls who believe there is little new under the sun.

They also believe that without Walmart, Argos, Carrefour etc., there is little volume potential for Toys.

But I’m not sure they were ever right, and I believe they are even further adrift in this brave new world we are in. Moreover, looking forward beyond the Global Financial Crisis, I believe that the world of Toys is going to fragment further in terms of Toy distribution and retail/retail channel market share.

So firstly, let me tell you a quick anecdote about what lead me down this path for today’s article – I happened to need a reliable Wi-Fi connection, and in my experience, McDonalds has the best and most reliable, especially versus those more up market coffee shop chains who really should know better than to have crappy/intermittent connections…

Anyway, while sipping my cup of tea in McDonalds, I started to ruminate over the well known fact that McDonalds is the world’s largest Toy retailer/distributor in unit terms via Happy Meals (note not in terms of $sales clearly). They are supposed to move billions of units of Toys every year, which makes them a massive player in the Toy industry. Yet most Toy companies would not see them as a primary distribution outlet. In part this is understandable, as clearly McDonalds are focused on Entertainment event properties i.e. Movies, and aside from the obvious example, few Toy companies own blockbuster Movie franchises.

However, the point is more one of looking beyond the obvious and perennial distribution channels. The point is looking for more entrepeneurial and creative pathways to sell Toy products.

Often in the larger Toy companies, where there are very large Sales teams, they will have focused resources on different channels of distribution. The challenge though is getting away from the potential size of a single extra SKU in Walmart, Argos, Carrefour etc.

Yet therein lies a huge amount of risk as well. Those suppliers who were burnt by the demise of Woolworths and others took a beating. However, so did nearly every other established Toy company in the UK…as you would expect when a retailer with close to 20% market share disappeared nearly over night.

Looking forward a few years, we can clearly see a much more fragmented retail space due to the maturing of online retail, and the likely rationalisation of physical outlets and chains.

So why do we not spend more time chasing product driven or opportunistic sales.

For example, I once worked on a Bingo game. The game did quite well at retail in fairness, but it sold in equal quantity in the chain of Bingo clubs which co-Branded the product. The best part of that was the Bingo game was on it’s own at the front of the hall where something like 5million people per month walked past it…it wasn’t compared with 200 other competing products, it was just there on it’s own. Even better than that, that was presented back to retail as a major cross-promotion hitting 5m people every month, creating a much more compelling proposition for them!

That deal took me 2 phone calls to put together, and was significantly more profitable than our usual business.

You might say that was a one off, you might say it was specific to Bingo, you might say all kind of things to be honest, and frankly most companies do say all those kind of things as an excuse for not seeking out such opportunities themselves. There is always a reason/excuse not to do something in business, but I am often bewildered by the mental inflexibility of some people and some businesses.

Here’s a few examples – got a Car related product? Every country has at least one national motoring organisation akin to the A.A., who in turn have millions of customers/members. is there a special gift opportunity? Probably! The American Automobile Association have a reported 50million plus members!

Have an animal Toy of some kind? Well the American Society for the Prevention of Cruelty to Animals has 1.2million members, in the UK, the Royal Society for the Protection of Birds has over 1million members.

I’m not suggesting that each of these opportunities is akin to a listing at a major retailer, but I can guarantee that they will be more fun to put together, will be completely incremental business, will be far less competitive and will help you to rely less on a small amount of listings for a small amount of shelf space in just a few retailers.

I would encourage you to stop and think about how you can challenge the status quo within your own Distribution Strategy…

All the best

Steve

P.S. If you need help with Toy distribution, 2 things:

1. I have a number of published guides including ‘How To Explosively Grow Your Toy Distribution’, ‘Practical Guide to doing Toy Business in Europe’ and others, to be found at www.stevenreece.com/shop

2. Drop me a line if you need specific help on a product line, region or individual market: steve.reece@vicientertainment.co.uk

HOW TO MANAGE STOCK ON SUPER HOT TOY LINES

This week something unprecedented happened in our business….

We had to shut the doors on any new projects due to being at full capacity until early March.

Much as it hurts to turn work away, we’ve had to do it this week, which I guess at least means we must be doing something right!

Anyway, the critical point though is the importance of managing restricted supply versus demand strategically to preserved goodwill.

All this made me reflect on what happens when your company has a really Top selling Toy i.e. where demand drastically outstrips demand. I’ve been fortunate enough to work on several such Toys, and the sometimes surprising things is, there are pitfalls as well as massive upside in such a situation. Here’s my thoughts on how to best manage such a situation:

1. Everyone comes out of the woodwork when you have a top selling Toy – but beware…the ‘Johnny come lately’s” will come and go as soon as your product line is not quite so hot…so beware of how much opportunity you give to them versus others!

2. Put your loyal customer base first – they were with you before, so make sure they are with you after! Nothing will destroy your hard earned Retail relationships than shipping stock on a hot Toy to their competitors over them!

3. Leverage – do it with tact, but make sure you leverage further support for other lines in return for stock allocation on other lines, especially Brands you own (versus 3rd part products and Brands).

4. Have an objective rationale – tempers can get fraught when hot products go on allocation, but if you have a clear rationale for how stock has been rationed out, at least you can stand there and defend your position knowing that there is a clear business rationale and methodology for allocating stock.

5. Beware knee jerk stock ordering – you may have a hot seller now, but by the time your massive new order arrives in February, will demand be so high, and will demand remain high until next Christmas? If you can’t be sure, beware and proceed with caution. Also beware low profit solutions such as air freight and local manufacture…if you can pursue those options and still make a profit great, if not, why bother?

6. Difficult as it is, avoid rubbing the noses of unsupportive/contentious accounts in your current success – it’s very tempting to goad those who don’t usually support you, but seriously – don’t bother! When it comes to missing out on Top selling Toys, Buyers and Retailers in general have very long memories, and needlessly putting noses out of joint will cost you in the long run!

7. “After the battle tighten your chin straps” – beware the hangover following a massive sales performance. Avoid increasing overhead, keep costs low and be prepared for the possibility of a tough year to follow. Make sure your business banks the extra cash as a security cushion!

There you have it. Finding yourself in the rare position where demand massively outstrips supply can be a good or bad thing depending on how you manage it!

All the best

Steve and team

The Value of a Wake Up Call…!

Some of you may know that outside of this wondrous industry, my main hobby is martial arts. Not that I’m a violent soul, for me it’s more about the challenge, the physical fitness and the ability to think under extreme pressure.

Anyway, this week I went back to Boxing training after about 6 weeks out. Frankly I thought I was better than I was. I’m an average Boxer, who happens to be 6′ 2″ (1.85m), so I look better against smaller guys because my arms are longer!

I waltzed into the gym after 6 weeks out (during which time I pretty much just ate biscuits and sat on the couch!), and before long was suffering. Moreover, whilst doing a blocking drill with someone much quicker, better and fitter than me, I missed one of the blocks (despite the fact I knew what was coming), and received a full force punch in the face. Ouch!

My reaction was temporarily shock, then a brief inability to function & see, followed by a rush of pain in the nose and a passing headache which soon went. Just a few minutes later the instructor called for skipping (not easy when you are my weight,) and in we went to 5 rounds of skipping, and before long it was as if I had never been away, and not just been punched in the face! Basically, I got over it, dusted myself off and found hidden reserves to see me through a punishing few rounds of skipping.

Now before you start wondering why I’m writing about this on a Toy industry Blog, on my way home I drew several comparisons with my experience in the Toy business!

To quote Rocky Balboa (!):

“Let me tell you something you already know. The world ain’t all sunshine and rainbows. It’s a very mean and nasty place, and I don’t care how tough you are, it will beat you to your knees and keep you there permanently if you let it. You, me, or nobody is gonna hit as hard as life. But it ain’t about how hard you hit. It’s about how hard you can get hit and keep moving forward; how much you can take and keep moving forward. That’s how winning is done!”

Yes that might have been in a corny Boxing movie, but it’s also so true about business in general, and especially this industry with it’s relentlessness, where we are always looking forward to the next selling cycle!

It’s also the case that even in this business it can be a nasty place – boy scouts get taken to the cleaners.

Products hit and some miss, the misses can really wear you down, and the spectacular failures can really make your head go fuzzy for a while, although at least the nose bleed should be merely metaphorical.

Just because you know something is coming doesn’t mean you will automatically deal with it or find the solution…you still need to act. In the case of my Boxing analogy, I still needed to block the punch. In the case of the Toy business, just because we see there may be a slow sales cycle coming doesn’t mean we can sit on our laurels…we need to take strong positive action, or else take the blow that’s coming!

Just because you are knocked down one minute, one year or in one venture doesn’t mean you won’t or can’t recover quickly!

Finally, what drives success in this industry is many years of dilligence, innovation and massive amounts of effort, determination and defiance in the face of adversity – whether it be failed Toy lines, difficult retailers or an unhelpful bank. Every person and company who makes it and stays at the top in this industry has taken some blows…so just dust yourself off and keep going!

Disney buys Lucasfilm for $4.05billion – but what does this mean for the Toy industry?

Wow – what a coup for Disney. Having built their own not too shabby (I’m being ironic!) Brand portfolio, they picked up Marvel and now Lucas.

For those of you who don’t know (aliens etc.), Lucas’ key Brand Star Wars has been huge for decades. For sure the films have come and gone, and there is some debate out there over the 2nd round of films and their place in Cinema/cultural history, but the reality is Star Wars has been and will continue to be a massive Toy Brand…

…In my own home market of the UK, it has been No. 1 Toy Brand in the market, with or without movies.

Not many Kid/Family Movie properties get to do that.

So the reality is that Disney just scooped up a massive piece of Toy industry real estate. Even better, the cost of the deal is apparently forecast to only slightly affect their results for the next year or two, before churning out pure cash once the purchase price has been recouped!

But what are the implications of this deal for the industry as a whole, and for some of the key players in it:

1. Hasbro – have had a strong relationship with Lucas for decades. They reportedly retain rights to Star Wars Toys until 2020, so in the short term they aren’t losing anything it appears, and even better, the now forthcoming 3rd round of movie/movies is likely to benefit them significantly. From 2020 onwards however, I am guessing that they could lose the rights, or at the very least have to pay more for them.

2. Mattel – in the short term, this is one less Disney owned franchise for Mattel to get master Toy rights for, and bearing in mind that Disney, like all studios have a limited Movie slate, is not great news for them. 2020 onwards though, and maybe Mattel might get a piece of the galactic action. Aside from which, it’s not like Mattel have any shortage of strong Brands/Licenses slated regardless…

3. Disney – this deal seems like great news for Disney. Effectively Disney just bought a key competitor (when it comes to Toy Licensing especially), and the deal looks like great value, despite the high ticket price. The longevity of the Star Wars Brand seems beyond doubt. Moreover, while I don’t know enough about the movie business to criticise the last 3 Star Wars films, it’s clear that they weren’t as universally well received as the first 3 movies. I just can’t see Disney’s influence, even if only at a very senior management level, failing to massively positively influence the next round of Cinematic history with this franchise!

4.  Retail – frankly this has to be good news for Toy retail, because Star Wars has been a phenomenal shifter of units through retail for close on 35 years. The thought of more movies to come, with the steady yet creatively brilliant hand of Disney behind it in some shape or form should have retailers salivating!

5. Lego – one of Lego UK’s management team recently identified the Lego video games as a key driver of the Brand’s growth and upward momentum of the last few years. Star Wars has been a key part of that Video game franchise, and clearly been a key royalty driver for Lucas in the past, and should continue to be for Disney in the future, despite the disruption of console/tech gaming transition.

So there you have it, an amazing week in the Toy trade again!

All the best

Steve

Toy Brand Building Workshop A Hit

Today’s workshop went very well.

Marketing teams from two of the UK’s biggest and best renowned Toy companies were in attanedance.

Today’s topics included How to build Toy Brands for long term stability and profitability, key Toy Brand management tools, how Marketing its into brand building, and many other topics.

At least so far (!), feedback has been overwhelmingly positive.

At some point soon, I’m going to be running Webinars on Toy Brand building, so if you’d like to get an invite, just send me an email: steve.reece@vicientertainment.co.uk

I also have a Product featuring the content of the Workshop and key Brand building tools, which is available for purchase for $397. Eventually we’ll add this to our online store, when time allows…!

All the best

Steve

If you’re looking for an easy win product for 2013, I’ve been instructed to manage the sale of an established Brand in it’s entirety.

To date the Brand has sold over 700,000 units, with a TVC, existing packaging, formulation etc available as part of the deal.

If this is of interest to you & you’d like more information, please feel free to get in touch: steve.reece@vicientertainment.co.uk

Originality versus success – The Perennial Success Formula in the Toy Industry

The Toy industry gets a new generation of consumers every few years. That’s a really important fact. And while I’ve mentioned that before on this Blog, it’s worth saying again! Simply put, today’s pre schooler will be tommorrow’s (metaphorically, not actually!) target audience for 5+ Toys.

So here’s the thing about that – Toy companies really don’t need to reinvent the wheel. Because you get a completely new set of consumers every few years. And bearing in mind we have an annual selling cycle, 3 selling cycles will see you get a fresh start.

Don’t think for one minute I am suggesting or accusing the toy industry of being lacking in innovation and creativity…there surely can’t be a better place to find creativity!

But the point is where the innovation is…it isn’t often successfully deployed to find a completely new play pattern/play motivation or theme. It’s applied most commonly to successfully adapt and evolve a known formula.

Here’s some common themes, themes which applied when I was a kid, and apply for the current generation of kids today:

Goodies & Baddies (Power Rangers, Transformers etc.).

Dark & Light (Star Wars).

Pirates (where do we start!).

Superheroes (Spiderman, Batman, Superman etc.).

Kids playing at being adults (Barbie, Game of Life, Payday).

Nurturing furry animals (My Little Pony, Care Bears).

Cars/Vehicles (Hot Wheels, Cars (movies) and many more).

I could go on (and on!), but hopefully you get the point?

We don’t need to create new types of Fantasy/theme to be successful. We just need to execute exisiting play patterns better, cooler, tech enhanced or just plain better in some way, shape or form.

So every time I meet someone who starts a pitch with “You’ve never seen anything like this before.”, I tend to glaze over.

The success formulae are not complicated – kids tend to have an unsophisticated mindset which can be easily understood. So my suggestion is not to make things more complicated or risky than they need to be!

All the best

Steve

Brand Licensing Europe 2012 – From Strength To Strength

Apparently we’re in the midst of austere times with budgets as low as they’ve ever been, with very few supposedly having a good time.

Well it appears that nobody told the Brand Licensing industry this.

This year’s Brand Licensing Europe was a fantastic, buzzing show.

The Licensing industry and Licensing folk are not known for their liking of early mornings, yet when I arrived at the start of the first day the place was already jumping. There were more exhibitors than I remember from las time, and as ever, the meetings in the hallway were better than many of the fixed appointments!

From talking to friends and acquaintances it seemed everyone was in agreement that this was a great show.

So here’s the thing, if we’re in the midst of a recession, and things are so bleak, how com so many people are hunting/selling rights, how come so many companies could afford stands and how come so many companies had clearly invested heavily in the properties on show?

One thing is for sure, if a vibrant well attended show is a precursor of how the next selling cycles are going to be, things can only get better!

All the best

Steve