Toys are likely to be on most shopping lists once again this Christmas.
Yet as retailers enter the most uncertain festive trading period yet, many are searching for ways to lure in customers amid the Covid-19 pandemic, whether it be through improving ecommerce technology or launching new ranges. On the other hand, several retailers are gearing up to launch toy concession concepts.
Debenhams recently launched a new concession concept called Toys At Debenhams, just in time for half term and the peak Christmas trading season. Meanwhile, Big 4 grocer Asda partnered with toy retailer The Entertainer, which will see the latter turn the toy aisles in five Asda stores into branded concessions.
At the time of writing, reports are rife that the worsening state of the second wave of the pandemic could lead to another nationwide lockdown that could collide with the peak shopping season. While online shopping was already predicted to be significantly higher this year due to the pandemic in general, another lockdown could further accelerate it.
James Owen, owner of outdoor toy retailer Rebo, warned that panic-buying could lead to a dramatic shortage of children’s toys before Christmas. He told The Mirror earlier this month that shoppers should order in good time, but parents should not get carried away.
In addition to stock shortages, there are concerns delivery services may struggle with keeping up with demand and delivering toys and other Christmas gifts in time for the big day.
“Sales of toys and games tend to see the biggest in-store and online holiday spike in the week before Christmas,” said Suzin Wold, senior vice president of marketing at software firm Bazaarvoice.
“So during this year’s peak, brands and retailers can stand out by delivering a fantastic consumer experience.
“Initiatives like these enable brands to listen and engage with consumers in the early stages of product discovery.
“Through storytelling, visuals, and immersive in-store experiences, toy concessions present a good opportunity for these brands to create engagement.”
Although Asda’s partnership with The Entertainer, which will launch early next year, the move to accelerate the in-store partnerships strategy reflects a shift in customer behaviour brought on by the pandemic, with an increasing number of shoppers looking to complete multiple shopping “missions” on a single trip.
“The Entertainer are experts in toy sourcing and retailing so we are really excited to work with them and are confident their offer will prove very popular with customers,” Asda partnerships senior director Matt Harrison said earlier this month.
Catherine Shuttleworth, founder of retail agency Savvy, told Retail Gazette that Asda’s partnership was a way of “getting people to expand the basket”.
“Toy concessions present a good opportunity for brands to create engagement”
“It’s a really smart move. They already have high footfall of family shoppers who are going to spend on toys this Christmas,” she said.
She also said that the addition of The Entertainer in-store would increase spend and potentially create switch from Asda’s rivals.
“From The Entertainers perspective, it’s a smart move as it extends their brand reach into stores with higher frequency and footfall,” Shuttleworth said.
“It’s important to remember the big players in UK toys are Amazon and Argos and it’s highly likely they will take ten lions share of the market alongside The Entertainer this year.”
Meanwhile, Debenhams’ Toys At Debenhams concept includes brands such as Lego, Barbie, Disney and Paw Patrol. The department store chain said it refreshed its gifting and toy brand mix for autumn/winter 2020 and has a number of new offers launching in time for Christmas.
“We have thought hard about what will make shopping easier and more convenient for our customers and we want to make sure we offer a range that meets the needs of the whole family,” Debenhams managing director Steven Cook said.
“We are delighted to be able to offer a really comprehensive range of toys across all our channels as we build up to a ‘giftastic’ Christmas at Debenhams.”
Manfred Abraham, co-chief executive of business consultancy Yonder, said that for businesses like Debenhams that have struggled throughout the pandemic, adding extra lines of toys was not solely going to result in a bumper Christmas. However, he highlighted that it may be a valuable tool in attracting new customers to their stores.
“Where the Entertainer may have previously been concerned about the Christmas season, with uncertainty over whether its stores would be able to open, it’s now been able to secure aisle space in the shops on high streets which are most likely to have the highest footfall,” he explained.
“In terms of selling online, especially for businesses like The Entertainer, it’s business as usual.
“Competition will come from Amazon and others, but the main bonus for this business, and indeed others doing similar initiatives, will be having access to consumers who shop in Asda, but who haven’t walked into an Entertainer store before.”
Nevertheless, both Asda and The Entertainer may see an increase in weekend sales as The Entertainer doesn’t open on Sundays due to the religious beliefs of its husband and wife co-founders Gary and Elizabeth Grant.
However, the move poses the risk of diluting the specialist toy market. With everything eventually being under one roof and with one buying team, it brings into question whether there will still be a diverse selection available in any physical toy stores in the future.
Specialist toy retailers, such as The Entertainer and Smyths Toys, are left with a conundrum – how do they fight off the increasing competition from online and grocery competitors and grow their businesses while at the same time minimising their own rental risk on high street stores?
At the same time, grocery retailers are starting to see the benefits of partnerships, especially since Sainsbury’s acquisition of Argos a few years ago. This has allowed the Big 4 grocer to open more Argos branded outlets – both standalone and within Sainsbury’s supermarkets – and diversifying its product offering into toys, electronics, furniture and more.
Partnering with the toy sector is attractive to the department store or grocery market as it provides the customer with a one-stop shop and the ability to either attract incremental footfall on the back of a destination, or to persuade grocery shoppers to make impulse toy purchases.
It also provides a low cost and low risk means of expanding the business without major investment in property, which gives retailers the halo effect of brand awareness that will inevitably come from marketing campaigns in the lead up to Christmas.