by BILL SOUTHARD, president and CEO, Southard Communications
As uncertainty around COVID-19 and its impact both from a health and economic perspective continues to intensify and companies worldwide look to take the steps necessary to survive during this crisis, many automatically look at ways to reduce costs and overhead. This is understandable, as bringing your costs in line with your short-term revenue makes sense for those in the toy industry and even beyond. Unlike the financial meltdown of 2008, on the surface, this seems to be much more of a shorter-term crisis. At least that’s the hope.
For the toy industry specifically — with 65%-70% of sales being generated during the Q4 holiday season — this gives us some breathing room and time to react to the consumer demand once the crisis begins to subside and we return to some sense of normalcy.
Traditionally, marketing including paid and earned media has always been an easy line item to cut. For decades, and through many previous crises, there has been much debate over whether this is a smart approach or will shutting down proactive marketing and communications campaigns have a long-term negative impact. As you might expect, as a marketing professional I lean toward a continuation of marketing, digital, and communications campaigns. At the same time, as a business owner, I understand the financial pressures of running a company during tough times.
In addressing the issue of whether to continue marketing or shutdown activities altogether, my advice is to find the right balance. If you are working with an outside firm on marketing campaigns, be honest and open, identify the immediate opportunities and what it will take to be successful, and discuss the need to make changes to the existing relationship, if required. A true partner will be considerate of your situation and will work with you to find a solution that benefits both the company and the firm in the short-term. This might be deferring some of your monthly fees to later in the year, but keeping activities in place, or reducing the level of monthly activities and the fees associated with those campaigns.
Find that balance that works best for you but make sure you are putting your business in a place to be successful both short-term and when we do eventually emerge from this COVID-19 crisis.
As it specifically relates to short-term opportunities and how toy and game companies can leverage the current situation, it’s obvious that there’s a need to make a quick and effective shift in overall activities. More and more consumers worldwide are confined to their homes and retailers have been forced to close to stem the spread of COVID-19. This, however, has created a real opportunity to fill the needs of these consumers as they look for products to purchase online to keep them entertained — and in the case of their children, educated — while having to stay in their home.
While online sales, in general, have continued to increase from year to year, many of our clients are seeing nice surges amid the crisis. We can expect this to continue as we spend time in our homes, which is likely to last weeks, if not months. The investment you make now to optimize digital sales will also benefit brands for the long-term, well after this crisis is over.
This has led to the rise of influencer marketing, social media, and e-commerce. Reallocating dollars — and messaging — to support brand awareness and driving consumers online to purchase products, including toys, games, educational products, and crafts, is strategically sound. In addition to the opportunity to sell online, it allows brands to continue to build awareness and engagement with consumers that will only help to support long-term revenue growth as retailers get back up and running.
Despite the overwhelming 24/7 news centered on the coronavirus, we have found great receptivity from media — online as well as newspapers and broadcast outlets — as they’re looking for fresh content that includes everything from DIY activities with your kids to suggested family board games, educational products, and arts and crafts. Media outlets are increasingly looking for such tips and information as consumers continue to be confined in their homes, and we anticipate this will continue. Brands can take advantage of this opportunity by strategically positioning themselves as a solution to the problem parents across the country are dealing with.
Finally, let’s remember the toy and game industry has gone through tough times in the past and we have endured. There’s little doubt that this will be the case with this current health and economic crisis and that we all will come out on the other side even stronger and poised for growth.