Robert von Goeben, President and Co-Founder of Green Toys Inc.is a regular reader of Global Toy News. He recently contacted me about some provocative and very interesting views he has on the recent recession. Here is what Robert has to say. If you want to contact him, you can at firstname.lastname@example.org.
The Great Recession, now over, created one of the biggest opportunities the toy industry has even seen. But before you dismiss this statement as fueled by a little too much coffee (which it kind of was) consider this:
I have a buddy who works in a factory. A good job, but lately the hours have been slim. For the past ten years, he burned through the plastic in his wallet buying everything in sight: boats, quads, electronic gadgets, and toys. Lots of toys. Then he lost his job, freaked out, calmed down, and stopped spending. He paid off his debts, got his job back (at lower pay), and swears it will “never happen again.” This was no small episode–this really changed him fundamentally. He’s much more focused on the long view, on lasting values and on the implications of his actions. This is a huge change for him. Huge.
While many people think the recession was a nightmare, chaos always breeds huge opportunity. It’s even odd to hear myself say this, because here in Silicon Valley, we live for these kinds of opportunities. The nerd expression for this is “disruption,” the events that lead to a fundamental change in the marketplace that creates opportunities. Everyone from Yahoo to Google to Facebook came to light as consumers abruptly moved in a different direction. The trick has always been to move with them.
Getting back to my now-fiscally-responsible buddy, he’s still buying gifts this holiday season. And sure, he’s buy some junk. But mostly he’s looking for fewer things that mean more to him. This isn’t just about economics. Consumers have been scared by this recession–we’re talking life-changing stuff like losing their jobs and their health insurance. I remember how my parents (born in the 1920’s) constantly talked about the Great Depression. Consumers don’t forget these things easily.
So, what does this mean for the toy industry? Every toy person I know loves quality. I really don’t know anyone who has a passion for cheap products. So, this is your time to shine. Crisis creates huge opportunities, and when consumers change their view of their lives, they look in a different direction and see new things. The winners are the people and companies place themselves in the frame of this new view. It’s a huge break for new companies, innovative ideas and quality brands. I’m not talking luxury; I’m talking solid offerings that speak to a reformed-spender’s new view on life.
The Great Recession has created nothing less than a sea change in consumer behavior. Most people now have a fundamentally different relationship with their money and how it exists in their life. And for those of us in the consumer business, this is one of the greatest opportunities we’ll ever see.