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Posted July 30, 2009
It is a scary retail landscape when the toy department of the 600 lb. gorilla retailer, Walmart by name, seems to be shrinking like an ice cube in the summer sun. Toy companies, in order to survive, are scrambling wildly to find new venues, new channels of distribution where their (and OUR) innovative, interesting, exciting, fun and even educational products may be sold. Auto parts, bookstores, hardware and home centers. No longer will the industry be so dependent on one retailer. If Walmart gets out of toys altogether, the toy industry shouldn’t even skip a beat. And at the current rate of shrinkage, Walmart will effectively be out of the toy business by this time next year. We should plan our business for this closest-to-worst case senario. If they don’t get out of toys altogether, Walmart will sell only the classics and the basics and the evergreens, as well as the most highly promoted new items each year. They will sell them at prices so low that no one else can make money on them. And the other retailers may well be driven out of toy retailing as a result. Walmart has way too much sway over the choice of toys that come to market and the over the health and future of the toy industry. What to do, what to do?
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