Claude Alary, Sales Director, Wrebbit Puzzles, discusses the latest trends, industry happenings, and how business strategies are evolving in the specialty toy market.
The Toy Book: How have you done business differently since stay-at-home orders were put into place across most of the U.S.?
CA: As early as the third week of March, in conformity with the strict requirements of Quebec Government concerning COVID-19 and for the health and safety of our employees, we have reduced to a strict minimum our business activities. All our efforts were put into the fulfillment of local and international orders exclusively for our customers offering online sales of Wrebbit 3D puzzles, which indirectly renders self-confinement more fun and playful for families during this difficult period. Our employees and management personnel from our creative, marketing, sales, accounting, and customer service departments started working remotely. Hours of business operation have been reduced and the number of production staff has been limited in accordance with our reduction of business activities for each department that remained operational, based on our strict needs, due to these exceptional measures. We put in place very strict rules with respect to health, safety, cleaning, and disinfection of our offices, factory, tools, and production equipment. Reception of supplies and shipping of goods became subject to strict restrictions and appointments in order to limit all contact with external persons, such as forwarders, truckers, and messenger service staff. Finally, orders, confirmation of orders, and treatment thereof became at all times subject to the above restrictive conditions.
TB: What do you think the short- and long-term impacts of the global coronavirus pandemic on the toy industry will be?
CA: In both the short and long term, there will certainly be a lot of disruption and uncertainty all around the toy industry as nobody really knows exactly what to expect. The global home confinement process was very different from one region to another, and the return to normal will certainly not happen at the same pace everywhere. But one thing is for sure: During the pandemic crisis, many consumers have discovered the advantages of online shopping and, although some of them just can’t wait to go back to ‘‘real’’ stores, many will continue to shop online. So, retailers who haven’t yet set a transactional website will certainly be affected negatively in the long run. I also think that consumers will increasingly be looking to support the local economy, so that’s a plus for neighborhood toy stores offering toys that are not necessarily made in Asia.
TB: With ASTRA’s Marketplace & Academy canceled this year, how do you plan to connect with retailers?
CA: Because we do not use the services of sales representatives, we’ve always been pretty good at keeping in touch with retailers by sending newsletters with information on our new upcoming products and specials and we will certainly continue to do that. We also regularly advertise in trade magazines such as the Toy Book and the Pop Insider to keep retailers informed about new releases.
TB: What are your predictions for the state of toy retail in 2020?
CA: With many suppliers having production problems in the first quarter, especially those who have their toys manufactured in Asia, and with all the retail store closures, we would have thought that toy sales would have been negatively affected. But according to the NPD Group, toy sales unexpectedly increased by 7.6% in Q1 over the same period last year. With the U.S. now entering into a recession, one should expect more difficult times to come. But again, with the ban on traveling and the uncertainties about a possible resurgence of COVID-19 in the fall, we just might see toy sales increase again for the rest of the year as families could be forced to stay home and just might use their traveling/vacation budget on toys to entertain kids at home. One thing is for sure: Online sales will continue to grow, and that will affect the brick-and-mortar store sales.
TB: What major toy trends are you seeing this year?
CA: We’ve already seen a huge increase in games and puzzles sales so far this year and that trend is certainly here to stay as people discovered or have rediscovered the pleasure of puzzling and playing games as a family. For similar reasons, in my opinion, other categories such as outdoor toys, arts and crafts, and building sets should be very popular in the coming months.
TB: How important is it for toy companies to make an effort to be more eco-friendly?
CA: We at Wrebbit Puzzles have been using eco-friendly packaging since 2012 by banning the use of plastic bags and shrink wrap. We certainly think that everyone should do their part in reducing the use of unnecessary packaging in an effort to save the planet. Consumers are increasingly aware and concerned about the environment and having an eco-friendly toy and/or packaging is certainly a good selling feature as well.
TB: Which products or categories do you expect to drive sales this year? How do your expectations compare to last year’s results?
CA: Besides the puzzles and games, arts and crafts, and building sets, I think that licensed pop culture products and collectibles should also continue to grow as the ‘‘kidults’’ market continues to be a big trend. Unboxing and surprise toys should also be very popular this year. We also just might see more toys and games either based around the virus or pandemic theme and/or celebrating the new heroes, like scientists searching for a vaccine, doctors, nurses, delivery persons, and all people who make people’s lives easier during this difficult time.
TB: Do you take advantage of ASTRA member programs? If so, what do you find most beneficial?
CA: Of course, participating in ASTRA’s Marketplace & Academy has always been very important for us as it allows us to connect with retailers face-to-face at least once a year. One of our favorite activity is the Kit Session, which takes place the day before Marketplace opens. It’s a great way to show our latest puzzle models and get retailers to sit down and build one of our 3D puzzles and get them to truly understand what makes them so unique.
TB: With less consumers out shopping, how are you getting the word out to drive awareness about new product lines and brands?
CA: Our No. 1 way to connect with consumers is via social media. We’ve been very active mainly on Facebook and Instagram. We reach out to specific groups of people according to their profile and we invite them to visit our website for which we’ve seen a huge increase in traffic in the past few weeks. We also organize contests in which they can win exclusives prizes.
TB: Do you have a drop-ship program or plan on putting one in place? What are the benefits or challenges?
CA: We still do not have our own drop-ship program, but have been using 3P drop-ship partners, which do a great job for us. Having our own drop-ship program would allow us to connect more directly with consumers and that would be great, but to do so it would require a lot of warehouse space and manpower, which we don’t have at this time. It’s something we might do eventually, but it is not a priority for us now.
TB: Has your direct-to-consumer distribution strategy changed, and if so, how?
CA: We have never sold directly to consumers and we still don’t. We might eventually do it for some markets, but again, that is not one of our priorities.
TB: How have you kept up with retailer orders for your products?
CA: In the past few weeks the demand for our 3D puzzles has dramatically increased and it seems like every day is Christmas day. Because we produce our puzzles in Montreal in a just-in-time facility, we were able to face the increase in demand by setting up a night shift. We managed to secure supplies for the raw materials needed for production with all our suppliers and everyone in the company does their share of production time. From the president to the accounting, sales, and artistic department staff, everybody spends a few hours a week in production to help fulfill the unusual large amount of orders for this time of the year.
TB: What are some of your most in-demand items right now?
CA: For more than four years now, our whole Harry Potter Collection, which now includes 12 models, has been our best-seller. Hogwarts Great Hall and Astronomy Tower were the first two models we launched, and they remain top sellers worldwide. Diagon Alley is our bestseller in the U.S., but our latest releases, Hogsmeade — The Three Broomsticks and Hagrid’s Hut, are off to a great start. Other than that, Game of Thrones’ Winterfell and The Red Keep, Downton Abbey, King Arthur’s Camelot and Neuschwanstein Castle are very strong sellers as well.
TB: What innovation in your products are you offering to consumers this year?
CA: This year we are launching at least three new models: Hogsmeade — The Three Broomsticks, Hagrid’s Hut, and Notre-Dame de Paris Cathedral, and probably some other surprises later on. But we are still using the same unique foam backing technology to produce them, providing snug, tight-fitting pieces and very sturdy designs.
TB: What advice would you give to other manufacturers during this time?
CA: We are going through a never-before-seen crisis, which will have unprecedented effects on the toy industry. During this period of uncertainties and rapid changes, it is very important for all manufacturers to be very cautious in many aspects. If the demand has increased for your products, that’s great, but you must make sure to put in place measures to protect your employees and provide them with a safe and secure working environment. You also must encourage work at home when possible. And if you are facing a decrease in sales, then you must find a way to reduce your costs while keeping your key employees attached to the company to be ready when the situation returns to normal.
This Chatting with the Industry Q&A response originally appeared in the June 2020 issue of the Toy Book. Click here to read more!