Some Toy Sale observations

This year’s Toy Sale battle amongst the retail giants is epic. Really, really epic. And it helps that it is supported by the release of Toy Story 3 (which, in case you didn’t know, is a 90 minute advertisement for the toy industry).

I’m not talking about the prices, which show absolutely beautiful finesse in procurement for toy retailing (and that deserves its own blog entry), but the boundaries they have pushed to be the leader in the pack by:

  • Purpose-built catalogue designs
  • Adding the internet to their deck of cards

I pay particular attention to Kmart and Big W, with other retailers in the race being Toys R Us and Myer. And I must stress that when it feels that Toys R Us are not on top of their game for what is essentially their specialty, something definitely will be changing in the company over the next few months if they are going to stay alive.

The July school holidays is marked on the calendar of every person who works in the toy industry. Children are going to be out shopping with their parents, and toys need to be around to try to win their hearts. It is also the start of the 6 month stretch towards Christmas, the time of the year the industry champions and relies on for its bread and butter. I am more inclined to believe that Christmas was invented by the toy industry, like how Valentine’s Day was invented by the gift industry.

What prompted me to write about this were two things, one Kmart’s way and one Big W’s way, which  will keep them competitive and dominate this year’s toy sale. And this plays further testament to the idea that it doesn’t take much to make a huge impact.

The Catalogue

This is going to be the bible for every child; they will be getting their markers circling what they want or cutting out the product out of the catalogue and giving it to their parents. I’m 24 and I still do that.

Children only see the product, and possibly any cool freebies that come with it. If they see that $100 Nerf gun or that $80 Barbie, all they will see is the Nerf gun and being able to shoot their friends with it, or the Barbie and being able to groom her. They don’t see the $100 or $80 pricetag.

Parents only see the prices/ deals, possibly any educational features about it. Most anyway (there is the adventures with Mr Hot Wheels, one of my favourite customers who is an account manager at Wrigleys who collects Hot Wheels cars, and Mr ThomasLegoMan, who is a lovely father who seems more keen about building that giant Lego city in the spare room than his son does…). If it fits the budget, yes, if it doesn’t, “go find a cheaper toy.

Which brings me to these specimens: the first, a page out of Toys R Us’ board game deals, the other two is Kmart’s.

Toys R Us Board Games Catalogue page

VS

Another board games page from Kmart's catalogue

Kmart Toy catalogue board games page

On both of them, I can still see the board games I want. Connect 4, Scrabble, etc. Heck, on the second Kmart page, there is space for me to draw my circles, like so:

I can easily circle my desired item.

It is pretty obvious that I want Hungry Hungry Hippos, and the price is strikingly clear at $18. Kmart cuts to the chase on the pricing; not clearly mentioning how much is saved.  But because it goes straight to the point, it doesn’t leave room for parents to think about finding a better deal.

With the Toys R Us’ one, it was a bit tricky.

Circling with Toys R Us was slightly trickier

The circle is now touching two other products. WHAT NOW???

This is exciting for a child: there are toys EVERYWHERE and there is so much happening on this page! A parent would see the same, but think otherwise: there are numbers everywhere and it doesn’t look as clean, with clouds everywhere, tabs and all this… TEXT. Like cleaning and tidying their kid’s rooms wasn’t enough, now they need to look at cluttered advertising. There is an obstructive layer screaming “be reluctant’ in place for the parents, but it is quite clear this catalogue is intended for children.

A clean look which is parent-friendly and the final bottomline: Kmart sells Hungry Hippos for $18, $9 cheaper than Toys R Us.

Catalogue Page Summary:

Myer – 32 pages
Toys R Us – 32 pages
Kmart – 70 pages
Big W – 132 pages

Utilising the Web

Big W have their catalogue online where you can make purchases and have it delivered either immediately or closer to Christmas time. This allows parents who normally struggle to secure that awesome deal instore to just go online.

Kmart’s Christmas layby allows customers to layby off the catalogue, irregardless of stock availability onsite and have it available around December. They can go online, compile the list and take it to a layby counter at any Kmart.

Kmart Layby Deal for the Toy Sale

This implies the following:

  • Customers don’t need to pay for most of it until December
  • Kmart is ‘taking orders’.
  • Therefore, Kmart does not need to carry as much stock as before
  • Therefore, Kmart can lower its margins further to take into account the reduced risk they would have had of stock that doesn’t turn over.
  • What clever bastards!

One of my biggest concerns is that if major brick and mortar retailers are now taking their business online, what room is there left for independent or smaller online stores?

This is going to be the trend for years to come, and I can’t wait to see how other giant retailers serving different industries continue to take advantage of the power of e-commerce and an aging Gen Y, who have essentially been brought up by the internet, start joining the workforce and have a lot more disposable income. I will be keeping this year’s catalogues as a reference and hopefully compare how the industry progresses.

One final thing: Kmart has captured the Star Wars demographic with the following offers:

8089 Hoth Wampa Cave before it has hit the Lego Shop@home website, and the Tantive IV exclusive. Like… woah.

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