Been busy… found a new obsession along with some toy nooze…

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Been busy… found a new obsession along with some toy nooze…

Its been a while, but in the last week, I finally got permission from Amazon to start selling again! I was banned sometime last year… that a whole ‘nother story, but now I’m back in action, and this time, I wanted to better streamline my process for updating quantities, changing pricing, and managing primary inventory levels across multiple 3rd party selling venues. Using some fancy formula finger work along with my penchant for spaghetti coding, I’ve created a whole basic management system using Google Sheets! More on this later as e-commerce interactions have been something of an on and off hobby of mine for the last 17 years.

In toy news, lots of good things!

1) Retro Nintendo consoles have just been announced for release later this year! This includes the popular NES classic that sold out immediately a few years ago, and a new Japanese ‘Fami-Com’ system that features all Shonen Jump games in celebration of the titular magazine’s 50th anniversary!

Retro gaming is definitely one of the hottest tickets outside the Disney juggernaut with great history, an appreciation for 8-bit designs, and a slew of wild, organically loved licenses of yesteryear. Nintendo has really been the only system maker who’s retro systems actually see any type of demand which goes to show how much of people’s childhood they control over the likes of Sega and Atari. I personally am looking forward to the Fami-Com edition. It won’t be available in America, so I might need to try and pull some favors with some connections in Japan to make this happen. I do feel it’ll be a hot ticket, and with TRU out of the picture, I can see other major retailers owning up to bigger chunks of business and also related venues like Hot Topic and Box Lunch which do cater strongly to gaming lifestyle goods.

2) TRU is closing out fast and it was revealed that the company will be shelling out around $350M just in bankruptcy fees.

No toy news would be complete without something on TRU nowadays. Its a rough time. With workers, executives, and politicians weighing in on the demise of TRU, the job loss count has been calculated to be anywhere around 30,000 (B. Sanders) to 133,000 (I. Larian). Seems like there’s still money to be had, but on the legal side of things. Painful to hear and it doesn’t make these growing pains any better. Note to all those former TRU workers: its easier than ever to get into selling online. You’ve got the experience, and the industry doesn’t have an official voice yet. Get heard, get to selling, and get paid.

2) MGA is killing it with their victory judgement of $1.1M and injunctions on overseas counterfeiters of the popular LOL Surprise product.

Though I’m pretty sure they’re not the first, MGA has proven that even in this day and age with internet everywhere and the ambiguity of world wide licensing control, protecting one’s IP is still achievable and enforceable. For the longest time in my own specialized industry (anime collectibles and media) bootlegging and counterfeits are of an enormous burden on all who are trying to make an honest living selling it here in the US. It was particularly troublesome in the late 2000’s, and even today, you can jump on EBay or Amazon and find fake products being offered form international sellers by the tank load. Most I’ve talked to including licensees, licensors, and distributors claim chasing these sellers would be extremely expensive financially. And being there were larger avenues of selling available for domestic product, the official goods should drown out the bootlegs. As more and more of these ‘larger avenues’ start to disappear though, the reality is starting to set in that in the long run, not addressing the issue early will not only cost a company financial trouble, but IP integrity trouble as well. To all IP holders out there, your IP IS your business in my opinion. Protect it at all costs. Now if we can extend this to that pesky parallel import issue…


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TRU gets a bid from a toy Isaac Larian – An Opinion

I just saw a post shared on LinkedIn by the nypost.com detailing a deal proposed by Isaac Larian, head honcho behind toy mega-brand MGA.

In the article, it states that Mr. Larian has been busy collecting funds through his personal assets, crowd funding (gofundme that raised around $52k), and silent investors at a tune of a whopping $1 billion. This would be for a few hundred top performing TRU/BRU stores in the US as well as the Canadian division. He’s given TRU just under 10 days to answer.

This most certainly sounds like a very honorable thing to do, but unless the silent investor group names end in Bezos, Zuckerberg, Brin, Page or Musk, there’s going to be SERIOUS new grounds to be gained.

Mr. Larian does try to comfort everyone on LinkedIn by announcing his excitement for the highly innovative idea for the store that he has yet to reveal all while taking some cheap shots at Mattel… granted if what was said was true, then they rightfully deserved it. Personally, I have a sneaking suspicion that Mr. Larian made a ton of noise on LinkedIn as a ruse for the attention of the masses especially the soon-to-be TRU alumni. I’m sure he does care about the industry as he’s been a part of it for so long, but really I find a great deal of his appeal to the public as a stunt to grab more eye-balls, the currency of the internet. The eye-balls you control, the more value you will produce in this day and age. So, really whether he goes through with his bid or not, he’s already got the eye-ball attention of all lovers of TRU. Quite brilliant.

In this interview with Fox Business found on YouTube, the interviewer hit him with the obvious question about how to even continue the TRU business, and I didn’t really hear a convincing answer coming from Mr. Larian.

Physical retail is a massive beast of an operation, and its completely different from the business of marketing or the production side of things. Even top US brick and mortar retailers today are barely hanging on, and to find someone who is remotely capable of making this into a reality will be a miracle. Most high level execs I’ve known have very little understanding of the operational pressure involved with retail as most think its nothing more than the same thing as their current business with numbers be all there is to it. I saw this disconnect with my former employer where executives from all around the world simply had the completely wrong idea about retail execution. It finally came to fruition when the company hit its breaking point and its restructure practically dissolved into little bits and pieces of its former self.

Although my opinion on this isn’t for the better, I can see how its not impossible if Mr. Larian enables someone with a massive amount of social clout to make this happen. And its got to happen FAST. The $1 billion is for keeping the stores as they are: hemorrhaging money. They’ll need to do some serious renovations to make it worth peoples time, and who know how much that’ll cost.


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Perspective on The Toy Association Perspective: #SaveToysRUs

In an article I saw posted in LinkedIn, Bob Wann, chairman of the The Toy Association Board of Directors, explains the group’s belief on why brick and mortar stores like TRU are important, and offers their support.

Basically, physical stores have been a cornerstone in the industry for customer discovery and purchasing, which I totally agree with if the opportunity presents itself. Having had both a physical and online store for so many years, I can most certainly understand how the power of the in-person presentation is much more effective in persuasion of purchase. This is where the true artistic art form of character building salesmanship comes into play from the store display, initial greeting, product showmanship, the closeout and the follow up. These elements build a stores ‘character’ and encourages true future customer engagement.

Though I do agree with the idea and I certainly want to save TRU, the statement leaves questions about a few points mentioned that never really get addressed.

The first is in the very beginning of the statement: “seismic, disruptive change.” Its followed with concerns of confusion, uncertainty, and ‘far worse’ news of the closing of TRU making it sound like the idea of change is bad in my opinion. This is really just a set up to express a sort of relief when it goes on to mention the possible salvation of a number of TRU stores that might happen. Saving TRU sounds like a good idea, but in its current state, it would make for tough business.

If anyone took a wide lens look at business in general today, every industry is going through massive change, and its always for the better of the consumer. From everything that I’ve been taking in from tech to toys, ‘disruption’ is something we are trying to achieve (market disruptor, anyone?).Everything from taxis to takeout, from physical fitness to mental wellness, and even employment has gone through ‘disruptive change.’ Most of the business tactics before the disruption were good for the industry as they were, but admittedly, I find the new change to be better. Its forcing stagnant, complacent companies to finally take the initiative to innovate, and the toy industry is long overdue compared to others. I’m still waiting for my real deal Hover Board, not the chintzy, explosive Segway wannabe.

The second issue I have with this statement is that although it explains that in-store discovery is important and touch/feel/play is magic, it doesn’t really explain any way on how to get customers back in stores. I mean, its great if kids can do this, but how can that happen if they never go in? This latest bankruptcy is not the first rodeo for TRU, as financial issues stem as far back as 2005 when they made the loan deal that locked them into a losing game according to the Fortune article here. So, this should indicate that simply having a place to go doesn’t really bring in an audience. Let’s be real here: kids don’t play with toys the same way they used to. Kids don’t play to entertain themselves so much as they want to entertain others or to watch others entertain them. This is why the surprise style toy is so big. Its also why discovery is no longer done in store for most people, its done on social media. From what I’ve seen with most hot toys recently, people discover items not sitting on shelves in a store, but in YouTube box openings, convention reviews, and a network of friends. That’s not the same as thinking the majority of customers discover items in-store.

Speaking a little on the TRU finances, I’ve read where people mention that TRU would have been profitable earning $350M in 2017, but they had something like $400M in interest payments from there 2005 deal. In other words, TRU was not profitable. I can’t understand why people don’t see that. Its akin to saying, ‘I would have made $1M in sales if it wasn’t for that pesky $1.5M in production costs.’ Obviously, no money earned.

Should the industry band together and save some existence of TRU, I’d like to suggest a few tips on what to consider in observation of the masters of the next-gen retailer, Amazon.

1) Lead the industry by having useful information. If you ask any modern consumer, and I’m hoping the industry as a whole is targeting modern consumers, they will all tell you the first place they look for pricing/availability is Amazon. Why does Amazon get to be the first option for TOYS? They’re not even a toy website. Change that. News, special promotions, offers, and release schedules should be found at TRU’s website. I’m not talking about TRU info, but all this info from toy producers. Create a website plan where product producers can curate and merchandise their products directly on TRU’s website. Add that to the marketing arsenal of the retail shop, and you’ve solved two problems in the industry: modernize TRU to compete with Amazon, and build an effective way to market for toy manufacturers to an endemic audience without needing to branch out of the industry. Facebook and Instagram are great for outside the core toy audience, but these platforms are far from ideal for the industry.

2) Earn consumers trust. In a recent article on Inc.com, its stated that trust is just as important as price in the modern retail environment. Although traditional ways of gaining trust through donations are fine and dandy, more is needed today including visibility of the personnel. Every once in a while, Jeff Bezos would put out a scanned copy of an announcement for upcoming news for amazon right on the front page. I can’t believe 100% that it truly is Mr. Bezos who’s doing that, but the perception is endearing for most, and it makes anyone who visits Amazon’s site more comfortable. Another way would be to foster a strong network of influencers from various social media platforms. YouTube’s been under a lot of heat recently with misguiding kids to inappropriate info, and as YouTube gets more and more saturated with this type of content, its more likely kids will fall in to this trap. Build a ‘toys only/approved, authorized influencer’ platform just for toys accessible through the site and a proprietary app. This will keep kids glued to the smart phone in a self contained environment of just the appropriate subject matter. Also, feature influencers with appearances at various locations around the country. Everyone loves a local celebrity.

3) Have the products people want. At this moment, I can order something from Amazon, and have it ready to pick up at a locker location by the end of the day. Its always a good thing when the store you go to always has the one thing you’re looking for in stock when you get there. I know pick up services have been around for a while, but the difference here is Amazon has EVERYTHING available including exclusives from everywhere. Will TRU be able to do this? Maybe they can partner with Hot Topic or GameStop so whenever they get exclusives that TRU can offer them as well, or TRU can simply capitalize off the fact that they get the ‘first to market’ news and offer before the rest of the industry. This move can ruffle some feathers with clients, but this is a key component to the success of Amazon.

4) Make the process quick. When I go to an Amazon locker, I scan my smart phone and a locker pops open for me to get my product. TRU needs that same convenience. Most online pickup options have me waiting in the Customer Service line, behind all the returns, then waiting for the clerk to figure out who I am and what I’m doing there, then waiting for the clerk to find my product. Add pickup lockers, in the middle of the store so people can grab there goods and get a good view of all the impulse items along the way.

And now this journal entry is three times longer than the original statement released… Just some bubbling ideas that popped in my head when reading the statement from the Toy Association. Embrace disruption, and lead the industry as you were meant to do.

About The Toy Association

Founded in 1916, The Toy Association™, Inc. is the not-for-profit trade association representing all businesses that design, produce, license, and deliver toys and youth entertainment products for kids of all ages. Our 950+ members drive the annual $27 billion U.S. domestic toy market, and our organization has a long history of propelling the health and growth of the toy industry, which has an annual U.S. economic impact of $109.2 billion.

http://www.toyassociation.org/ta/about-us/toys/about-us/about-us.aspx


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TRU is closing, and kids don’t care, but I do

Category : Blog

You knew this was coming. Don’t kid yourself.

This was all part of the inevitable just like other mighty legacy titans of retail before it. Its a similar story to Sports Authority, Tower Records, The Good Guys, Circuit City, and Radio Shack. The only difference here is that now it feels its directly affecting kids and we can’t help but to try and ‘save the children.’

But lets be real here; kids aren’t into TRU anymore. Kids are barely into toys nowadays.

My definition of a ‘kid’ since my early childhood had been little people between the ages of 4 to 14. Kids actually played with toys back then. That age range has slowly gotten smaller and smaller heading towards the younger years. Nowadays, I feel the term ‘kid’ is between 3-6, and then beyond that, we’ve got tweens and teens who now adopt a new toy that many old-school, plastic printing, major players are afraid to recognize: smart phones. The age shrinkage isn’t going to stop either as smart phones and other devices are quickly becoming the Swiss Army knife of automated babysitting for the busy modern day parents. What toy can you think of that can double as a scientific calculator and a baby rattle at the same time? Now, the deceptive ambiguous term ‘kid’ should die along with the TRU brand.

If there was anything I could do to save the business, I would. It was a treasure in my childhood and it still the ‘go to’ whenever I feel the urge to scratch the toy itch. However, due to the rapid evolution of shopping in the the US, the stale, rigid processes of aging legacy business, and the ever changing interests of the youth, it was just a matter of time.

With most industry people and news sources stating that this will be a loss for kids, but if you notice, it’s not the kids next to the adults that are expressing emotion, but the kids inside the adults. Modern kids don’t know TRU. Unless they have a family member that works for the company, Geoffrey the Giraffe would be nothing more than a retro meme with a damn catchy theme song that old people can sing by heart. I saw a video of a costumed Geoffrey walking into a classroom to meet a group of 6-8 year old kids. The confusion on their faces was priceless. They didn’t know who the hell Geoffrey was. How could they? With zero awareness made through any standard media modern day kids consume, this visit was more of a surprise introduction than anything else. At these kids’ age, they should have already known the theme song.

If TRU was seriously important for kids, I don’t think Walmart and Target would have been such a threat. Its not like those companies are promoting any better. I do feel both Walmart and Target have a better online presence than TRU, but that’s not saying much since they are all pretty atrocious and pale in comparison to the online juggernaut.

From this, I’ve learned that my idea of creating an engaging experience at a retail store might not work after all. I was a big believer that if you created an event out of a place, it would be worth it to go there. This works well with serialized magazines and media as well as competitive types activities like card games. However, if a store is simply touted as simply retail, and if you can’t sell it better than the next guy, regardless of all the bells you ring or whistles you blow, you won’t get the business.

TRU needed to become the leader in toy news not only for the industry, but for the partner companies. By being the initial source, it would have made for the perfect chance to catch customers online to buy right then and there, or at least guide them to the store closest to them.

I do feel they needed to reduce store especially after hearing that there were over 150 stores that were within a 15 minute drive to one another. That seems extremely excessive in this day an age. If they would have closed those stores during the first restructure over a decade ago and reinvested it into the online strategy, we could have been looking at a whole new eCommerce landscape.

There is no separation between physical retail and online retail. Retail is retail. The product you get at a store will be the same product you get online. Even when a physical retail store gets an exclusive, you can best believe it’ll be online, Amazon specifically, within the first hour that the first store offers it. Scalpers know this all too well. If online retail is only a fraction of the whole revenue, boil those numbers down by how much it cost to make each dollar and I’m pretty sure you’re profiting much more via eCommerce. Plus, any lack of sales online is made up for the compounding interest of online marketing through social media promotions. The whole box opening phenomenon should have been a trend TRU invented.

To look for a silver lining, I hope this will open up the doors of the long time stubborn, pretentious toy producers to partner with small business entrepreneurs without the need for a $500k yearly minimum guarantee or manditory EDI integration. Its not about selection anymore. Its about diversifying your client portfolio. If that means hiring more staff for account management and order processing, do it.

Will the brand name continue to live after this? Probably as an online store for a while before just fizzling out. Just go over the list of names of ‘unforgettable’ legacy business mentioned earlier in this article, and you tell me.

To me, its just water under the bridge. Toys will survive by evolving, and business will go on as usual.


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