Retail Opinion – as The Entertainer pops up in Tesco stores, our expert John Ryan looks at the benefits of collaboration

How about ‘collaboration’?

What are the options as far as buying toys is concerned? The first and most obvious is to head for a toy shop. But there is a small issue; there just aren’t many outposts. The average town might have a toy shop as part of its storescape, but it is entirely possible there will be nothing at all.

At this point another possibility presents itself - take a look at a shop that doesn’t sell toys. If this sounds counterintuitive it might not be quite as odd as a first glance would say it is, given the direction that things are taking in retail. In fact, why not head for a supermarket?

There’s a distinct possibility that what springs to mind is one of those rather sad-looking aisles in a large grocer, which sucks any joy out of the business of buying a toy. Equally, the space devoted to the category will be secondary, adding to the sense that toys in a supermarket are an afterthought and absolutely second best, even if they may be cheaper than elsewhere.

There is an alternative, however, and in spite of the location still being a supermarket, it looks set to be every bit as good as a standalone toy shop. Since the beginning of October, The Entertainer, as a retail proposition, is to be found in 35 Tesco trial stores across the country. The idea is very simple; Tesco has sufficient excess space to have inked a deal with the mass market purveyor of toys (there are more than 200 branches of The Entertainer in the UK) in a deal that looks as if it will benefit both parties.

From the perspective of The Entertainer there is the footfall Holy Grail. It will function as a shop-in-shop, branded as it would normally appear, but with the number of customers passing its ‘door’ likely to be far higher than would be the case in a standalone high street or mall branch.

For Tesco there is a dual payback. This is a retailer that back in the day was at the head of the queue for opening new space. Then, suddenly, it found it had reached saturation point as far as coverage in the UK was concerned and it had too much. Now that same excess space is being offered to ‘collaborators’ and for Tesco not only do they fill its square footage, but by putting in additional offers, its stores can function as ‘destinations’.

The workaday retail parlance for this is ‘collaboration’, although there is perhaps less that is collaborative about the process and rather more of a landlord-tenant relationship as far as most of those taking space in a host store are concerned.

It is also worth noting that an awful lot of us head to the supermarket, even if visits to the high street are relatively uncommon and therefore, putting a store where there are people does make a lot of sense.

A question, however. As a host retailer, how do you ensure that the shop-in-shop you agree to have in your stores will sit comfortably with what’s already there?

In the old way of things, retailers tended to worry about ‘adjacencies’ – making sure that one category makes sense when sited next to another and that there is not a jarring disjoint. This may well still be the case for some, but in the brave new collaborative world the only real stricture is that whatever appears as a shop-in-shop should not directly conflict with what’s already there.

Even this rule tends to be broken. Take a look at large hypermarkets in France, from Carrefour to Auchan, and the chances are good that if there’s a semi-discreet branded DIY offer, for instance, parts of it will be mirrored in an own-brand manner elsewhere in the store. Fortunately, in many cases, toys rely on being branded to seal the deal. This does mean that in-store duplication is less likely to be an issue and certainly, a very large portion of The Entertainer’s offer is composed of toys bearing a recognisable label.

At this point the comment might be made that this is all well and good if you happen to be in control of a large chain of toy shops, but for smaller outfits there might be something of a ‘so what?’ about the potential to collaborate. This needn’t be the case for the simple reason that if you control a single toy shop or a few branches in a particular area, then the host store can reasonably claim that it is helping local business, which should appeal to locals.

Perhaps the trick in all of this is to ensure that if you were to go down the collaborative route with one of the big supermarkets you don’t wind up with space in a rarely visited part of the store. Your role as a space filler shouldn’t mean that you’re paying rent for an area which, in spite of the store’s footfall as a whole, doesn’t merit the price being demanded.

So is putting toy shops in a very much larger retail space a good idea? With certain caveats, the answer is yes. The grocers are canny as far as cutting a deal is concerned and in order not to be hidebound from the outset, you should sit at the negotiating table with a very clear of what you actually want. Do this and collaboration might be a realistic alternative store option.

John Ryan is Stores Editor of business magazine Retail Week. He has worked for the title for more than a decade covering store design, visual merchandising and what makes things sell in-store. In a previous life, he was a buyer.