Retail’s New Dynamic; 4 Things Toy Companies Can Do

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The future is never for the faint of heart and today is no different. 

Any doubts that we were undergoing a major shift in retailing were put to rest when we learned on July 6 that QVC is merging with Home Shopping Network. It seems that they, like their bricks and mortar brethren, have been losing customers to Amazon, eBay and other digital retailers. 

This follows an announcement on July 7 by Sears Holdings that it is closing yet another 43 Sears and Kmart stores. This follows Sears Canada announced it was filing for bankruptcy.

The current disruption is, however, by no means all bad news. German retailer Lidl has entered the US market while Aldi announced plans for dramatic growth. Amazon has purchased Whole Foods which will make that chain more competitive and possibly a leader in multi-channel food retailing. Dollar General, Family Dollar and other retailers who cater to lower socio-economic shoppers are opening stores at a rapid pace.

And that's not all that is happening. China is an expanding market for American retailers. Toys R Us and Walmart are opening up to an additional 40 stores a piece in that country and Walmart is remodeling an additional 50.

You can really get a feel for the current change by looking at the BRANDZ 2017 GLOBAL TOP 100 list of the world's most valuable brands. Culling through the list you can see who the major retailers are in brand value and Walmart does not take the number 1 spot or even number 2. Its number 4 and the number 1 and 2 positions belong to e-commerce providers.

  1. Amazon 
  2. Alibaba
  3. Home Depot
  4. Walmart
  5. Costco

So, what are those who sell to retailers to do?

  1. The most obvious answer is to, of course, spend more time and effort in penetrating the digital retail marketplace.
  2. Perhaps not so obvious is to take a hard look at where retailers are expanding and that means China and India in particular (see "Where Retail Is Growing"). These countries are accessible, you just need to do your homework and attend trade shows like the China Toy Expo that cater to the domestic markets in those countries.
  3. Make sure you are selling to deep discount retailers who market to consumers without easy Internet access. These are the bricks and mortar retailers who are least impacted by digital retailing. Retailers like Family Dollar and Dollar General who are not closing stores but are opening thousands of new ones.
  4. Finally, be open to change and be a student. We have a long way to go before all of this change settles out and those who will be left standing will be those who stay ahead of the marketplace. The only way to do that is to make moves now that seem uncomfortable like  selling in foreign countries and opening new channels of trade to name just two.

The future is never for the faint of heart and 2017 is no different. 

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