The price of toys is going up, up, and up due to labor shortages in China and the growing cost of shipping.
All kinds of pressures are pushing upward on the price of toys. But, if you ever think toys at your local toy store are expensive, try buying the same toys overseas or in South America.
A $50 toy here in the good ol' US of A would be 50 UK pounds, or a little over $75 (more than 1 1/2 times the cost!) and that in a country with a lower average wage. In Venezuela that same toy would cost the equivalent of $100, twice as expensive.
What is even more amazing, in Brazil that same toy would cost three times as much - the equivalent of $150 due to 100% import duties, taxes, etc. This makes Brazil a very difficult toy market for US toy companies.
What will it take for Toys R Us to survive? A miracle, perhaps? Miracles do happen, just rarely.
Is there something that the major toy companies can do to help the giant retailer in their hour of need? It is expected to be another bruising holiday toy season again this year, and TRU's competitors will once again compete aggressively for any available toy dollars. What strategies might they employ to survive and even thrive?
I would love to help, but I am not sure that my two cents are of any interest to them, and yet they have a lot of supporters who would love to advise, consult, or assist in the interest of their success. The toy industry is a resource that they should consider making better use of.
Toys R Us stores generally do not provide an inviting or fun environment, they just have a lot of toys in one place. Nothing special - not like FAO Schwarz tries to be.
Toys are different, toys are fun, toys are special. Toys R Us and all the other major toy retailers sell toys as if they were auto parts rather than the engines of children's imaginations.
Retail as entertainment just doesn’t enter the equation and opportunity is lost as a result. Nobody is eager to go to a dull, dingy, unimaginative destination for any reason, toy purchases included.
It must be true, as we hear it again and again from credible sources. On the ropes, losing money, Toys R Us's fate hangs in the balance. Toy companies large and small are rooting for the toy retailer's ultimate survival and success, no matter how unlikely that may seem.
An industry without TRU might be a very different landscape altogether, with all the more power and influence being wielded, not to anyone’s benefit, by remaining retailers, Walmart in particular. Why have they found themselves in this situation? Is it self-inflicted or a byproduct of an ever-changing environment, and of our evolving culture? Likely both.
Thank Heavens that last-minute pre-holiday shopping boom happened, but why so late? What does this mean for this year, for the toy industry, for us?
Does it bode well for brick-and-mortar stores, since with just 4, or 3, or 2 days left before a holiday, online retailers just can’t be counted on to deliver absolutely, positively on time those must have toys? Or not?
One explanation offered is that typical toy consumers live busier lives today than ever before. This is likely true, and these consumers put off what they can until they cannot delay any longer.
I am not sure, but I think this shift in mentality, this waiting until the last 4 days before Christmas, is important - significant to the toy industry. I just wish I knew how.
I was talking with a significant player in the toy industry recently, and they reported that as late as the beginning of December 2012 they as a company were “terrified,” and I quote, "by the lack of toy sales." Then, in the last four days of the holiday shopping season, the consumers more than made up for the sagging sales and the year was saved.
It was not until the last four days before Christmas that toy sales skyrocketed. Why is that? One wonders, as I wonder, what happened in the American consumers' lives, their collective psyche, that en masse they went to the stores and, finally, opened their wallet to buy toys at the last minute.
