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View Full Version : What if discount retail stopped selling toys?



Phantom-like Menace
06-15-2007, 12:21 AM
I don't remember what thread it was in, doubtless one of those "X" Retailer Sucks threads, but JT was talking about how Wal-Mart, Target, and KMart get very little return from toys and figure from time to time that they might as well get rid of their toy sections until the Christmas season (This was a while ago, but I've been thinking about the conversation lately.)

Would it be a good thing if these stores bowed out of the toy business? Would manufacturers be able to weather the change until dedicated toy stores can take up the slack? Or will it torpedo the toy industry?

I can't help but think more and more that it wouldn't be a good thing; it would be a great thing. I've always felt toys belong in toy stores. The manufacturers would get away from the devaluing of their product especially by Wal-Mart. Distribution-wise maufacturers would have a massively simplified field to play. And personally, I just want to walk into a Star Wars (or G.I. Joe, or place toy here) aisle again before I die (not that that is a pressing issue:yes:) instead of trying to locate the specific section of the action figure aisle.

I don't want this to become a "X" Retailer Sucks Thread, and I'm not saying this is a pressing concern, but I'm just curious what others think the benefits and drawbacks would be.

Kidhuman
06-15-2007, 12:23 AM
They would lose alot of money if they stopped selling toys. In some areas like mine WM, Target and Kmart are your only options for toys with out driving 45+ miles to a TRU or a major city. It would never happen.

Rebo's_Guitarist
06-15-2007, 12:31 AM
They would lose alot of money if they stopped selling toys. In some areas like mine WM, Target and Kmart are your only options for toys with out driving 45+ miles to a TRU or a major city. It would never happen.

Same here, but maybe my TRU wouldnt have gone out of business had this happened.

El Chuxter
06-15-2007, 12:35 AM
Why would the discount stores stopping toy sales lead to full aisles of particular lines again? That wouldn't bring back the big toy stores of old.

I think it would be a bad thing overall. Our options would be severely limited. The products may be undervalued and not kept in stock now, but imagine if the few remaining TRUs and KBs were the only places to go.

Phantom-like Menace
06-15-2007, 12:44 AM
Why would the discount stores stopping toy sales lead to full aisles of particular lines again? That wouldn't bring back the big toy stores of old.

Because if fewer places sell the product and the demand stays the same, those fewer places would have to stock more of the product.


I think it would be a bad thing overall. Our options would be severely limited. The products may be undervalued and not kept in stock now, but imagine if the few remaining TRUs and KBs were the only places to go.

My thinking would then be that TRU and KB would then have to have more stores.

To sum up both of my above points, the current toy stores would have to grow to take up the slack, unless manufacturers couldn't survive while the toy stores respond. Current toy stores would have to stock more actual toys in each individual store and increase the number of stores to fill up the lack of nationwide coverage.

Jedi_Master_Guyute
06-15-2007, 01:01 AM
yeah, obviously you've never been to the central Ohio region cos they don't have crap. The store I work at hasn't gotten in any new superhero figures since JANUARY. Their SW flow is pretty decent, but there are a bunch of old geriatrics working in the department, so it takes forever to get stock out there. I do about 98% of my purchases online anyway. I form a good bond with the stores I've been shopping at for years and they e-mail me with new stuff they know I'm looking for before they put it up officially and if there are changes to the account or shipping issues, they don't hesitate to contact me. And there is that whole "gas is 3 bucks a gallon" factor. I'm quite content with online retailers. :thumbsup:

bigbarada
06-15-2007, 01:31 AM
The online stores are going to continue to get a bigger piece of the pie as time goes on. Especially if retailers continue to drop the ball on staying up to date with new merchandise like they have with the TAC line.

My nearest TRU is over 3 hours away, so if Wal-Mart stopped selling toys, it would force me to do ALL of my toy shopping on the internet. With the aforementioned gas prices, it's impossible for me to drive all that way to a store that might not even have any new stock or has just recently been cleaned out.

In the long run, I'd save money by just buying everything online.

I like having the toys in Wal-Mart, though. Since I might go there for something completely unrelated to Star Wars (like groceries or clothes or sparkplugs) and there is always that little thrill that I might just find some new Star Wars figures while I am there. So I would hate for that to go away.

mtriv73
06-15-2007, 10:56 AM
I don't think we need to worry about it anyway. Wal-mart is so money hungry that they would never give up their market share of toy sales. Even if it doesn't have a huge percentage return on investment, it still gives them quite a bit of income. Pennies add up to dollars pretty quickly when you get them fast enough. Plus, it gets people like us to come in their stores and probably buy a few other (higher profit margin) things from time to time while we're there. Target will continue to stock toys just to compete with WM and to continue to bring in the collectors and kiddies so they'll shop for other things as well.

If, however, we're going to treat this like an infinites story and assume that WM, KM, and Target did stop carrying toys, then that would be the end of the toy business. It would take time to build all the toy stores necessary to take up the slack and would carry a huge risk of the big boxes jumping back into the game at any moment, putting them out of business again. Hasbro and the other toy companies probably couldn't weather the down time for all the changes to take place. I don't even think Hasbro could expand their online business fast enough to take up the slack.

El Chuxter
06-15-2007, 11:15 AM
Okay, theoretically, I see where you're coming from, PLM. Realistically, though, neither of those chains really has the money to expand on any kind of scale that would result in meeting the demand that would be left.

Luuuuuuke
06-15-2007, 01:53 PM
Unless the supply would stay the same and the online stores reduced prices to reflect their greater stock, it would be a bad thing. Anything that reduces choices is generally bad.

I don't have the luxury of going to TRU or KayBee at 10 a.m. during the work week. That's too late in the morning for me. By 9:30 a.m., I'm at work. My best bet is Target in the morning, and sometimes Wal-Mart.

As for the online-saving gas thing. Put it this way, if you absolutely do not drive to stores for toys, then it's worth going exclusively online. But if you dabble in some retail store and some online, then it's less worth it. It has to be online only, and only online, to really make that option worth it.

But by the looks of it, a lot of people here, myself included, drive to stores a lot and still order online. That's a waste of money.

El Chuxter
06-15-2007, 02:29 PM
But by the looks of it, a lot of people here, myself included, drive to stores a lot and still order online. That's a waste of money.

Thing is, it's not like the average person isn't shopping at at least one of the stores anyway. I'm not buying my deodorant online.

Kidhuman
06-15-2007, 02:51 PM
I happen to pass both WM and Target everydayu on the way to work. I know when Target gets their shipments so I stop there. I never go out of my way to get to a store to check. I am in WM at least 3 times a week getting odds nd ends, so I check for toys also when there.

Phantom-like Menace
06-16-2007, 12:23 AM
For those of you who think discount department stores would never get rid of their toy sections for ten or eleven months out of the year . . . it is a hypothetical discussion whether it's likely, plausible, or impossible, so whichever one of those three adjectives it might be is a moot discussion.


Realistically, though, neither of those chains really has the money to expand on any kind of scale that would result in meeting the demand that would be left.

Do you think then, hypothetically, that discount retail's no longer selling toys wouldn't give dedicated toy stores enough of a profit boost for them to expand to meet demand? Or do you think that online sales in the interim would prove too much of a draw for consumers to turn back to brick and mortar toy stores after dedicated toy stores' sales increase?

El Chuxter
06-16-2007, 01:24 AM
I don't think it could possibly turn their business around quickly enough for them to meet the new demand, and would probably blow up in their faces.

Keep in mind that there are, for all intents and purposes, only KB, TRU, and FAO. Not three companies with an awful lot of common sense.

JediTricks
06-18-2007, 11:27 PM
I don't remember what thread it was in, doubtless one of those "X" Retailer Sucks threads, but JT was talking about how Wal-Mart, Target, and KMart get very little return from toys and figure from time to time that they might as well get rid of their toy sections until the Christmas season (This was a while ago, but I've been thinking about the conversation lately.)Yeah, their profit margin on toys is really low, and WM was considering ditching toys except during holidays since it's one of their worst-performing departments, I've heard.


Would it be a good thing if these stores bowed out of the toy business? Would manufacturers be able to weather the change until dedicated toy stores can take up the slack? Or will it torpedo the toy industry?It would cripple the industry for a while for sure if WM or Target stopped altogether. Toys are currently driven much of the time by a convenience market, it's easy to go to the local store and browse toys for a few minutes, maybe buy something or not, it's a low-pressure sales at this point which keeps customers flowing; you take away a major outlet and a lot of those customers are just going to slow their toy buying. Manufacturing would be decimated, prices would skyrocket, the breadth of line choices would grow incredibly narrow and it'd probably start a chain reaction that led to a total restructuring of the entire industry. Toys R Us would probably close half their stores as well. Toys are already at a tenuous spot as a business, any destabilization could topple the current house of cards.


Because if fewer places sell the product and the demand stays the same, those fewer places would have to stock more of the product.

My thinking would then be that TRU and KB would then have to have more stores.

To sum up both of my above points, the current toy stores would have to grow to take up the slack, unless manufacturers couldn't survive while the toy stores respond. Current toy stores would have to stock more actual toys in each individual store and increase the number of stores to fill up the lack of nationwide coverage.The problem in your theory, as I see it, is that there's a disconnect between the unusual relationship of supply and demand for this particular market, which I touched on above.


Depending on online and catalog sales are another death knoll for the industry, they account for less than 10% of the interest last I heard, companies that depended on those kinds of sales mostly went out of business at the end of the decade or had to greatly restructure how they behave. Online sales mean a customer doesn't get to see the product in a personal way before it's purchased, which lowers sales automatically; and catalog sales are now a niche business for people who can casually afford to risk their cash (which most folks cannot).


BTW, KB is barely hanging in there as it is, if what we're talking about happened, 1 of 2 possibilities would occur: A) the flow of discount merchandise sold off to a scavenger (where a significant portion of their sales have come from in the past) would boost their sales until the market restabilized; or B) they don't get that huge influx of resold product and the lower amount of product and higher prices drive them immediately into the ground.

Phantom-like Menace
06-20-2007, 01:04 AM
That almost sounds doom and gloom enough to go ahead right now and kiss the toy industry goodbye. Though given that ninety-nine percent of toys today are movie-of-the-week future clearance offerings, I'm not sure what we'd lose. I'm also not sure what they'd even put out for the holiday season since there would be no movie of the week. Would anyone foresee the Summer blockbuster moving to the Christmas season since so many movies are in it for the merchandising?

What effect would you imagine the collapse of both TRU and KB would have? Your scenario makes it sound like their loss would be far less than losing Wal-Mart, KMart, and/or Target.

So what do you all think would have to happen to get the toy industry back to the "good old days?" I always notice that we collectors argue that manufacturers have to pay attention to us because we have the strength to make or break them, but then when it comes to an issue like this, we collectors are suddenly too few, too insignificant. Now I'd argue we're being realistic on that last, but my point is we dont' seem too damn worried about that when we're raging against manufacturers.

It always seems to me that change needs to happen with us. Yeah, I know X store sucks because they never have anything. I try to stay away from discount retail as much as possible, but every one of us knows that if you see the figure you want, it doesn't matter where you are, get it because you may never see it again. But some of us will readily admit we'll pass something up at dedicated toy stores to buy it cheaper at discount retail. Yeah, fine, argue about how much gas costs or how much it costs to keep a kid in diapers, but admit you're part of the problem.

Anyway, I have no answers either way, so don't think I'm particularly arguing with anyone if my opinion differs.

JediTricks
06-21-2007, 12:02 AM
Corporate masters of the studios want a piece of the toy tie-in pie, but it's still not a chief driving force for most summer blockbusters. I think what would happen there is that you'd continue to have summer movies, then you'd have toy tie-ins with fast food, then DVD releases, then when Fall ends a small line of actual toys gets released and disappears come Spring of the next year no matter how good or bad it is.

BTW, toy popularity isn't that much about summer movies as you think, Star Wars, Transformers, Wrestling, TMNT, Power Rangers, Hot Wheels, Barbie, and LEGO are toys that stand tall with or without a movie release. Granted Transformers, wrestling, TMNT, and Power Rangers all rely on TV, but that's already its own can of worms. Spider-Man is a hot-selling line but was doing well without movie support too.

I've already spoken candidly about what I think would happen if TRU collapsed several times, TRU is essentially the founder of year-round toy buying in the US and if it folded, the industry would implode. You lose WM and it'll hurt hard, you lose Target and it'll hurt too, but you lose TRU and I think it'll destroy the very foundation. The toy industry is already eroding its market to its perceived enemies - video games, DVDs, and the internet - so losing its chief sales location would decimate the industry and fast. Out of those ashes, you'd probably get a few leaner versions of the big boys - Hasbro for example is already trying to change the way the market sees them from toys to "entertainment". The industry is partly born out of other things - Hasbro started as a textiles manufacturer before moving on to school supplies which eventually led to toys - so you'd get other corporations like cereal companies and comic book publishers starting up their own toy companies just to satisfy part of their own markets.

As for KB's collapse, which we recently saw nearly happen, it'd affect only the shopping mall industry - KB is not a particularly vital part of the toy industry right now - KB serves that mall niche very well but malls are extremely greedy with high rent and off-the-top receipt take, so what malls didn't realize is that when you take out the toy store in the mall, kids stop wanting to go to the mall and that means parents are less likely to go to the mall. What happened there is that some malls actually lost their KBs and then came back to KB with better offers when they saw their overall sales decline.


As for getting the toy industry back to the "good ol' days", for one thing, I think retailers do need to accommodate collectors - they may be frustrating customers, but they keep a beloved brand going year round, while kids are in school, while parents won't buy, when the store is collecting dust in Jan/Feb/Mar. They don't need to do more collector lines, they just need to work harder on repairing their relationship with collectors - this is ESPECIALLY true of Toys R Us who has no loss-leaders or other merchandise to fall back on, they have most toy collectors all but begging to shop there and TRU does everything in their power to lessen the collecting experience, it's shameful (and I don't just mean SW, there's video games and Barbie and Marvel and a host of others). Even if collectors are 30% of your market, they're far more consistent than the other 70% and they're loyal to the store that delivers the goods soonest - fail them, and they may just drop out of the industry altogether instead.

Also, pricing has gotten ridiculous, $10 gets you a 6" figure with few or no accessories, how is that acceptable? $5 is a magic number, that pricepoint will convince almost anybody to part with their sawbuck for a halfway decent-looking toy, but the further you get away from that, the less perception of value there is. And it doesn't matter if your toy gets bigger, look at GI Joe: Sigma 6, the $10 figures are probably a deal but it ain't selling very well and is going in for a heavy retool after a short amount of time. Masters of the Universe conned buyers out of their cash at first due to heavy nostalgia, but it quickly caught up with them when they could no longer count on that nostalgia carrying the product with all the line's management flaws across the finish line and it quickly buckled.

I also think brand management for a lot of toy lines has gotten far too dependent on media tie-ins and focus groups, and they've lost the driving vision that would create cool lines - and even when they do a cool line, they don't do anything to market it correctly and they don't inspire retailer confidence so a line may fold in months now, long before it ever finds its legs.

Target and WM I think need to add a little more space for toys, they only notice that their shelfspace is extremely valuable so smaller toys are better for them, but they don't realize that this edict they've delivered to toy manufacturers has created less co-sells in the form of a lack of vehicles and playsets. And the toy manufacturers need to stop nickel-&-diming the aforementioned vehicles and playsets, they always try to make a profit with just that single sale, but by doing so they make a smaller, less-appealing product to consumers and in turn give consumers less reason to buy more action figures and accessories to go with those vehicles and playsets.

A vehicle made small to maximize profitability will see profits of 1 vehicle, but a vehicle meant to give the most toy for the buck to consumers will see profits from the half-dozen figures that are bought to go with it instead. Look at the '80s GI Joe: A Real American Hero line and it's flooded with vehicles and figures which played the co-sell game off each other perfectly for a while, then you get into the '90s and the vehicle prices go up, the value goes down, the gimmicks increase, and the line chokes to death.

Finally, there's become this fear that an item may not do well enough to see a strong profitability, so corners will be cut before it even makes it out the door or worse, the tooling gets scrapped partway through because it's now perceived as cheaper to put a good idea aside than take risks on mold development costs. This is basically the "counting chickens before their hatched" mindset, and they'd rather smash the eggs than risk getting scrawny chickens. There's no concept of investment in something that's untested - and a lot of good ideas get watered down in focus testing and such until they really aren't worth pursuing at all because they're busy playing to the middle rather than finding their niche.

El Chuxter
06-21-2007, 12:10 AM
Transformers, wrestling, TMNT, and Power Rangers all rely on TV, but that's already its own can of worms.

Off-subject, but how incredibly cool would it be if some company made a line of TMNT figures accurate to the Mirage comics? Stuff like Savanti Romero, one-eyed Leo, or Raphael in Shredder armor, etc. Hell, work in Cerberus and other indie characters who have guest-starred in TMNT (or vice versa).

It wouldn't be entirely without precedent if it weren't ToyBiz. Right now, three companies are producing POTC figures in roughly the same scale (NECA, Zizzle, and the Disney Store).

JediTricks
06-21-2007, 02:14 AM
There have been plans, but they always get scuttled. I think Playmates just doesn't have faith that their market will follow them down that path, the comic statues didn't take off from what I heard. But honestly, it couldn't be much worse than the direction Playmates took the new line anyway.

jjreason
06-21-2007, 02:49 AM
I think it would hurt the hobby. It's much more likely for a new fan to stumble onto Star Wars toys at a WalMart/Target than at TRU - so many more people shop at the discount retailers.