Or probably better entitled, How Walmart Bought Christmas for Good in 2008.
The Grinch Aint Got Nothing on Walmart
Only BJs’ and Walmart’s sales were up in November 2008 – while every other retailer in America was down. Let me repeat…. Walmart’s sales were up in November 2008 over last year. The sky is falling – we are heading towards another depression and Walmart’s sales were up. Hmmm…. Toy Industry is recession proof? Nope. Walmart is recession proof!
While the media has convinced everyone that the sky is actually falling, which certainly appears to be accurate, we also seem convinced that the only way a consumer can save money in these times is by shopping at Walmart. So, Walmart “lowers prices” on all these toys and, still, they sell more dollars than last year. While the rest of the toy retailers are down. Interesting….
Goodbye KB (although I think we said goodbye years ago, if I’m not mistaken). Goodbye Toys R Us. So long E-toys (didn’t we do that years ago too?). Adios speciality toy retailers.
Let me share a couple of stories. We put a particular item that featured a particular superstar – a no brainer, no lose, toy item – in our Christmas flyer (of which we had 30,000 printed). Retails for $59.99. My cost was $49.50. Not much markup, but a very nice, attractive item.
Big box is selling it for as low as $14.99! I have an email in to the manufacturer – that was ten days ago, still awaiting a response.
We carry LeapFrog Didj – a great new product this year with a minimum advertised price of $89. That means that NO ONE can sell it for less than $89.
Big box wasn’t moving enough.
So LeapFrog changed the map to way below our cost – now Amazon is selling at $49.99. Hmm….
Define Category Killer. One word: Walmart. Good for the consumer? Save Money. Live Better. That’s their slogan? Really? Save Money. Live Better. Has anyone ever set foot in a Walmart and felt like they were living better? Obviously, Walmart is talking about their customers, not their employees…. And are their customers living better?
If they are, it’s not for long. When the category is officially killed, how low will those prices be then? When Walmart is choosing the toys you can buy, and what you can buy them for – and no one else is around to balance…. Try to save money and live better then!
Speaking of saving money, when did that ever become the American dream? I guess that’s another blog entry for another day…..
All right, so another post from me bashing Big Box Toy retailer Toys R Us…. But, bear with me. Here’s the quote from Toys “R” Us Senior Vice President:
“At Toys”R”Us, we love kids, and we want to help parents make a big deal about their children this holiday season. Our new campaign shows parents looking for the perfect gift and incredible values that Toys”R”Us has something special for every child and every budget. It also reminds everyone about the magical experience in stores by bringing back the famous, ‘I’m a Toys”R”Us Kid’ jingle.” See Market Watch for more….
If Toys “R” Us is truly so concerned with helping parents make their kids happy, why don’t they revamp their service rather than changing their advertising pitch and reviving their old jingle?
This is how I think of Toys “R” Us. And yes, I sometimes go to Toys “R” Us because we don’t stock and sell every toy brand in the world and sometimes my little girls have their heart set on a toy for Christmas or a birthday that I can’t buy direct and don’t have in stock. In any event, I always thought it would make sense if you could walk into a toy store and say to someone working there, “I have to buy a present for a seven year old boy, can you help me pick something out?” The clerk would then respond with, “Sure, how much do you want to spend? Oh, yes, would you like this, that or we have this over here….”
Actually, we have a local toy store around the corner from our warehouse (yes, I go there too) and you can do pretty much that. But, try that in any Toys “R” Us and you’ll get a blank stare. As a matter of fact, try this one (this is my favorite). “I’m looking for a certain item by this manufacturer, do you have it.” Response: (Employee pointing) “I don’t know, if we have any of those they would be over there.”
That’s the Toys “R” Us I know. No nostalgia there. No love for kids – no help for parents to show them how to make a big deal out of their kids. Just another big box with a bunch of disorganized stuff on the shelves. Always employees that know little or nothing about the product and care little or nothing about the consumer. Most likely this way not because of the employees themselves, but because of another large corporation that believes in spending a lot more money on marketing trying to convince the consumer they care, rather than training employees to do just that.
In the wake of WalMart announcing dramatic price drops in the Toy category, KB announced it would drop prices on 200 toys. CEO Andy Bailen explained, “Clearly, more consumers are looking for affordably priced gifts and that is why we also just took over 200 great toys and lowered their prices to $10 or less.” What a great gesture to the consumer in this time of economic crisis!
Not so fast! Let’s look at some of the items on the list. The Are U Smarter Than a 5th Grader? game. This game came out for last Christmas. Toy sellers have been selling that at below cost all year to get rid of it. MLB action figures – it’s October. My Little Pony – it’s 2008.
Big Box toy stores are using the fear put into consumers by the DJIA dropping faster and faster every day (in the wake of any news, good or bad) to convince them to buy toys they can’t sell anyway.
Don’t fall for it. Purchasing toys that kids don’t want in order to save money is not going to help the consumer. Why not make smarter purchases from independent toys stores? Instead of buying a couple of outdated, useless, sub-$10 toys, why not purchase a product with an online component that is only $14.99 and allows children to play for months and months with other children on the web like VIPs or Groovy Girl RSVPs?
Both presidential candidates have gone on record about the importance of supporting small business and how it helps the economy. What will help the economy faster? Helping WalMart or KB unload some old stock before Christmas or supporting that local toy store in your town that can barely pay the light bill?
It appears our Christmas catalog is just about set for this year. I have to admit, it was a bit of a struggle to put together, but I am really pleased how it is coming out. We went with an eight page format: cover with a few select items (Bakugan and Groovy Girls RSVP among them), page 2 Boys, Page 3 Girls, Page 4 and 5 are for LeapFrog, 6 is Infants and Toddlers, 7 is Games (and a few books and CDs) and the back cover is plush toys.
Gile Toys 2008 Christmas Catalog
One of my big challenges this year was placing our Hasbro order. As a specialty toy store owner, I have come to believe that it is important to carry some mainstream items and brands. While most specialty toy stores stay away from such items, I give in to the fact that some kids want Transformers this year. And how can you have a toy store that appeals to girls without anything from Hannah Montana?
We usually carry a lot of Hasbro board games, but had to choose not to this year. For some reason, many of the Hasbro games are being sold well below market value already this season. We can’t put them in the catalog, in fear of losing credibility. We are printing up 20,000 this year and do not want to be stuck with an item that appears non-competitive in our catalog. The consumer usually has no concept of what an item costs us – nor should they. So, we just can’t take the chance. Furthermore, I don’t want to be stuck with a couple of pallets of games I can’t sell above our own cost – we’ve been through that before with Monopoly Here and Now – the 2006 release.
The good news is Hasbro toy assortments like VIPs, Transformers, Might Muggs, Star Wars action figures, etc. do very well. Assortments work for us because it is not usually very easy to find the most popular items in local stores. For instance, a Transformers assortment may only include 1 Bumblebee (the most popular Movie Deluxe Transformer last year) in 8. These are the first to sell in the local retail store. We have a large warehouse space to store many assortments and can make that same Bumblebee more available to the Gile Toys customer.
So, if you are looking for that unique plush or action figure this Christmas and all you can find is a bunch of Chewbaccas that nobody wants, look to the on-line, independent toy store. It is most likely your best chance to find that Bakugan your nephew can’t live without.