Letter from America with Rick Derr

From sales of woe to sales are GO!

After 20 years working at A.C. Nielsen/D&B Research Company, Rick opened the first Learning Express Toys franchise in the Chicago area in 1996, and then became a sub-franchiser, opening nine more stores. Although leaving the corporate environment behind, he has combined his expertise in data and numbers with a passion for the toy retail space. Last month, Rick’s column was written with just 10 trading days to go before Christmas. Here he picks up what happened next…

Those last 10 days before Christmas that I talked about in my last column turned out to be a real wow. Shoppers still visited us despite some particularly harsh weather conditions in the States, and the week after Christmas was much stronger than usual, due to the massive amount of gift cards sold and then redeemed post-holiday. This positive momentum continued into 2023, with sales in the first week of January well above past norms. The key factor for success, in my mind, for indie toy stores? Service. I know we always include this attribute when we speak about local toy and gift shops, but it is true!

We found last year that, in spite of the heavy promotional environment in the toy market I spoke about last month, we were able to capture our core customers as well as random walk ins. Solid data indicates that many indies have retained 30-50% of foot traffic from their pre pandemic levels, and an equal amount of dollar sales gains. While we were all concerned that the “local love” would fade quickly, we are just not seeing that happening. ‘Shop local’ remains strong as long as you follow the three strategic elements of toy store success: Teams, Products and Wow.

Best Teams - we increased our investment heavily into our people this year, adding health coverage, retirement, flex time and bonus opportunities, as we train and delegate more to our key team members. The dividends are paying back.

Best Products – we stock a curated assortment that gives our shoppers convenience and what kids really want, a selection of whimsical as well as educational toys and stock presented in an organized fashion. so that a customer can select easily. Today’s in-store consumer doesn’t want thousands of choices (as on Amazon) but rather top quality, hand selected choices that they can touch and feel, or get a human recommendation as to why this particular toy is right for them.

Best Wows – whether they are shopping in-store or online, using collection services or delivery, choosing educational products or just joyful pick me up toys, our customers want that feeling of Wow. Gift wrapping for convenience, personalizing a gift to make it special, a recommendation on a new toy, a new selection of products they did not know about, or even just a friendly “hello”: that’s what everyone wants - moms and dads, grandparents and relatives. A place where they know your name.

December sales recorded our 4th best in history after last year’s record-breaking performance for US indies. The other two record-breaking years were 2013, with the Rainbow Loom phenomenon and 2017, when the Big L.O.L. Ball first launched. Remember that craziness and the beginning of unboxing?

I have grown fond of January. Instead of slowing down, we speed up. The air is filled with excitement from visiting our first buying show this year in Dallas, Texas, working on a new store floor plan (we’re adding a dedicated Tween space), spring cleaning, adding new signage and bringing back in-store events. Next week, we will hold our first event since late 2019 and have chosen Encanto - our singalong will not only draw crowds again, but also return normalcy to children’s lives. We can’t wait.

We also continue to aggressively use social media to inform, educate and have a fun presence where both kids and parents can learn about new products, watch engaging videos and pictures and keep in tune with the toy industry. This has been a key element since our first ad on Facebook in December 2012. We firmly believe that, if used responsibly, and with positive messages, social media allows us to interact in a safe and positive way. If any negativity outweighs this, we will be the first to exit. Print media continues to be part of our marketing plans and redemption rates still create a positive ROI - especially our larger catalogues. We will continue to explore new avenues, but carry on with a blend of online, in-home and cross marketing with other local businesses.

Finally, I do see a stronger alliance between Learning Express Toys and the ASTRA Toy association, as well as with strategic partners in the UK (Toymaster) and our friends to the north in Canada (Mastermind Toys). We are not competitors but allies, and if we can continue to find ways to share info, products, trends and best practices, I believe we will all benefit from a stronger toy industry, stronger local toy markets, and a consumer who is better informed and appreciative of the value of toys and what they do. Are you in?