Opinion - Rick Derr - Letter from America

Wow what a year!

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. This month, Rick’s column this month is based on a letter he shared with Learning Express members in December, as 2023 drew to a close.

I personally have not seen a toy and gift run like the one we experienced last year since January 2021. But as business normalizes, it is important to analyze and set your strategy locally. You are the CEO of your territory. I would like to look the top items sold nationally across the year, how I performed against this and whether we delivered on our goals. Hopefully, this will get you thinking and ready for a stronger performance in 2024.

I am referring to my Lake Zurich store, although Chicago and Milwaukee tend to follow similar patterns. To put my store in perspective, the area is not very dense in population; there are 89,000 people in a five-mile radius, with horse farms and nature parks. Thus, I need to think differently to other urban stores and work out how draw traffic from further away. How do I encourage shoppers to skip over suburbs to visit us? There are three independents within seven miles (with good owners too) and there’s a new Alex Toys 20 minutes away.

I state this background because knowing your local situation is important to develop specific strategies that will help meet your goals each year. Toys is an extraordinarily complex business, but always has a baseline that is dictated by how strong your birthday sales are and how well you reap the holiday seasons.

Looking at the above chart, of the top 10 national Learning Express items, four are in our top 10, while six are not (although they still performed well). Our strategy of offering customers the addition of a birthday card with every purchase worked too, as the cards are in our top 10 sellers.

I missed the boat on Fast Push (push pop game); I should have jumped in earlier and I missed sales as a result. I knew about it from my networking in England, as Midco Toys tipped it, but I didn’t try it, which is my fault. Trampoline Pong was an early winner, but I waited too long to buy more. This was a bad decision, as my team had encouraged me go bigger on it. We should also have started Jibbitz shoe charms earlier in the year. We thought that craze was over, then it restarted, but we lost 2-3 months of sales.

However, we maximized Bitzee. When you fully commit, your team commits and sales follow suit. We maintained a price point of $29.99 the entire time, which was fantastic. Graffiti Car by HUS was a great line we picked up from Chattanooga Learning Express store. Networking and hot calls work.

Mass Items (like Miniverse) work best when we price competitively and can turn them rapidly. We can and do, as a driver of attracting kids to our store. We try to be first with new stock. I keep wanting to discontinue Mulberry Jewellery Racks - turn rates are low and inventory high - but each year the profit from these three racks pays for a month’s rent (over $10,000). Another tip I have is SolarX ceramic piggy banks: a real profit producer.

As you set your 2024 goals, think locally, use information from others judiciously, and remember that you know your own market best. Trust your instincts and commit to a strategy that works for you.

Our 2024 objectives at Lake Zurich Learning Express are based on TPW – Team, Product, Wow:

• Remember, as a TEAM, we are small in number, but educated Certified Play Experts.

• We will curate PRODUCT mix, merchandise stock and execute speed to shelf based on our customers.

• Staff are WOW People who deliver every shift.

• SALES will follow steps 1-2-3.

Wishing you all a healthy and successful 2024.