It is always interesting if not a little unsettling when we overhear someone making a candid comment about us. That hairstyle we take for granted or that couch with the worn place on the arm that we no longer notice suddenly come into sharp relief when someone comments on them.
That was the feeling I had this week when I read comments by Big Lots CEO, David Campisi, about the toy industry. It was during the Big Lots Q4 conference call when one of the analysts asked this question: "…you had called out earlier in the call that toys were weak and I know it's not a huge category, but I was just wanting to understand that because I thought — we had heard from a few other retailers that toys were decent for them…"
Campisi responded this way: “We plan toys down intentionally and have taken some linear footage away to grow… the soft home categories.” When a retailer takes space from a category and invests in another it is an active statement about how they see it. To Big Lots, at least at this time, toys are not as attractive as other categories.
Campisi then goes on to explain the gap between their stated toy results for 2014 and that of Target and Toys R Us. He tells us that the difference between their perspective on toys and that of their big box rivals a is due to the very definition of the category. Here is how he puts it:
It's a down trend in category if you look at the purest part of it. So if you walk into Toys R Us and you see all of the electronics in there and all the Apple product and so on. If you just backed out real true traditional toys, this is just my belief you would be hard pressed to say that you're comp in positive…We’ll participates this spring in Star Wars, we think the Frozen opportunity in the back half of the year is an opportunity for us but it's not a growth business.
Star Wars and Frozen are, at this time, the crown jewels of the toy industry yet Campisi is less than enthusiastic; h-m-m-m-m-m-m-m.
Every retailer has a unique perspective on its consumer and its business. Big Lots is a somewhat atypical retailer but still an important one. The fact that they are not feeling excitement over what could be a very exciting year says a lot about how this retailer pictures the toy industry.
The loss of footage in any retailer has real consequences as a loss of revenue for suppliers and salespeople. The toy industry as a whole needs to think hard about the image it imparts to the retailing world.
Bottom line: The toy industry needs to define itself. If it does not, others will.