Lauren Derse, the new CEO of Learning Express Toys & Gifts, discusses specialty retail trends, the rise of tweens, teens, and kidults, and the changing trade show landscape in this extended edition of The Toy Book’s 2023 State of the Industry Q&A roundtable. Want more insight from the all-stars of the toy industry? Click here to explore this year’s lineup!
The Toy Book: What were some of the big wins and top-sellers at Learning Express stores last year?
Lauren Derse: In 2022, Learning Express had the third-highest average store sales in our 26-year history. We attribute that to several hot product trends — including Squishmallows and Fidgets — as well as becoming nationally known through TikTok videos made by our stores. [Editor’s note: Learning Express in Birmingham, Alabama boasts more than 2.7 million followers!]
TB: How are your franchise owners evolving their product assortments to serve growing consumer groups, including tweens, teens, and kidults?
LD: What has made Learning Express so successful over the years is our willingness and desire to listen to our customers, in addition to sharing our product successes with other Learning Express store owners. Through our “Hot Product” calls with owners, all-store emails, and the LE Owner Facebook group, we are constantly sharing. It’s this collaborative process that has allowed our stores to react quickly to trends. Because of the number of stores in our LE family, we’re able to access products quickly and competitively due to our collective buying power.
TB: What are some key considerations for Learning Express when it comes to working with new vendors or bringing in new products?
LD: We believe in building good relationships with our vendor partners. When our home office buying team works with new vendors, we negotiate terms that are fair to the vendors, but are also desirable to our store owners. We often test out the products in one or several locations first before launching them across all stores. New vendors also have an opportunity to showcase their products at our annual convention, where they are able to talk one-on-one with owners and introduce them to their company and product line.
TB: How did Learning Express owners manage inventory levels last year to avoid the overages seen in many of the mass retail channels?
LD: Learning Express does not have central warehousing. Each store orders directly with the vendor and orders in relatively small quantities in a “just in time” inventory management philosophy. We’ve developed trusted relationships with our vendors so that we can order throughout the year with competitive terms. While many products were only available to ship late in December 2021, our vendors honored cancel dates and our owners were able to manage their inventory so that their volume was appropriate for January 2022.
TB: How does Toy Fair moving impact your business, and what’s your take on the trade show shift, particularly since you operate your own show for franchisees?
LD: It has certainly been an adjustment, and this year’s market offerings will be a good predictor of what we will be attending going forward. We’ve advised our stores to attend either the Dallas Market, Atlanta Market, and/or ToyFest. We have our annual convention and vendor show in June, where the majority of our Q4 orders are placed with better-than-standard terms. Many of our store owners (and our home office staff) will be attending Toy Fair in September. Our prediction is that ToyFest in February will become the new “Toy Fair” for independent retailers.
TB: What are your overall predictions for the state of the toy industry — and toy retail — this year?
LD: I believe plush and innovative fidgets will continue to be strong in 2023 (albeit not as high as in 2021 or 2022). Customers’ increasing comfort with shopping brick and mortar will shift the focus on the in-store experience. Product discovery will continue to be based less on traditional manufacturer advertising and instead on user-generated content posted on social media channels, particularly TikTok and YouTube.
A version of this Q&A was originally published in the 2023 edition of The BIG Toy Book. Click here to read the full issue! Want to receive The Toy Book in print? Click here for subscription options!
