Holiday season to bring hi-tech fun with apps
This holiday season will be both a splurge and save season for toys. Parents will splurge for one or two toys, but will round out their holiday shopping with less expensive items, according to Adrienne Appell, a spokesperson for the Toy Industry Association.
App toys, which can be used with iPads, will be a bigger part of the mix this year. Their small size and under-$20 price tag makes them a perfect fit for drug retailers. “App toy sales have picked up, and it will be interesting to see how they shape up,” Appell said. “Manufacturers have pretty robust offerings this year.”
Play is activated by using the actual toy on the iPad’s screen after activating the app with a free download. A number of app toys are tied to popular licenses.
Mattel has a full line of hot licenses in its Apptivity line of app toys, including Fruit Ninja, Angry Birds, Hot Wheels and Monster High. Apptivity single packs retail for $9.99, and starter set two-packs with included accessories retail for $19.99. All are screen-safe for use with the iPad.
Pressman Toy also has introduced iPieces, a toy that allows consumers to turn an iPad into an on-the-go family game board when they download classic board games apps. The iPieces app toys retail for $9.99.
The re-launch of Furby and the upcoming Teenage Mutant Ninja Turtle movie should have an impact on holiday toy sales. Collectables, with their relatively low prices, continue to be popular gift choices in a sluggish economy.
Appell said glow-in-the-dark crafts and blocks also have been popular with kids.
The article above is part of the DSN Category Review Series. For the complete Toys & Games/Crafts Buy-In Report, including extensive charts, data and more analysis, click here.
Sam’s Club steady in wake of exec changes
Change was in the air again this year at Sam’s Club as the warehouse club division welcomed yet another CEO and head merchant combination. In early 2012, Rosalind Brewer became president and CEO, and Charles Redfield was named EVP merchandising. The change could have had suppliers saying, “here we go again,” due to Sam’s history of senior leadership turnover. Instead, the transition was apparently painless for the 67% of survey respondents who sell products to Sam’s. Their responses were heavily shifted toward the strongest levels of agreement when asked whether the leadership transition was a seamless process.
The finding is noteworthy because a changeover in senior leadership can result in a new strategic direction that is potentially disruptive. However, in Sam’s Club’s case, it is enjoying solid sales momentum; and as Redfield has noted during several public appearances, his objective is to not screw it up. In fact, Sam’s is doing so many things right that new club growth is poised to accelerate in 2013.
Accordingly, an overwhelming percentage of respondents expressed the highest levels of agreement with the statement that Sam’s represents a significant distribution channel that will make a meaningful contribution to their companies’ growth in the next five years. And the good news for Sam’s as it looks to execute a 2013 growth plan that will involve a net increase of 10 to 15 new clubs is that suppliers contend they have a thorough understanding of the strategy senior leadership has developed to drive growth.
While suppliers’ overall view of Sam’s was generally favorable, it doesn’t mean there aren’t opportunity areas. For example, Sam’s has the potential to move more suppliers toward higher levels of agreement regarding the state of collaboration and merchant receptiveness to new ideas. Scores in these areas could be characterized as solid, but a relatively small percentage expressed the highest levels of agreement.
Where results were the weakest was regarding participation in a loyalty program in the process of being rebranded as Instant Savings following a launch several years ago as eValues. Less than ideal rates of supplier participation and a questionable return on investment by those who did participate prompted recent changes that look to be a win for members and suppliers. Initially developed as an exclusive benefit that could be leveraged to promote upgrades to the $100 Plus level, Sam’s has expanded eligibility to those at the basic membership level. Now with the new brand identity of Instant Savings, the program’s central value proposition is much clearer than it was under the ambiguous eValues moniker. The good news for suppliers whom Sam’s is dependent upon to provide the incentives that form the member value is that the offers they fund now reach Sam’s Club’s entire network of 47 million cardholders as opposed to the much smaller subset of Plus members.
Opportunity also exists with the Tastes ‘n’ Tips demo program. The potential exists for Sam’s to broaden participation rates and demonstrate a better return on investment from sampling activities, which are popular with members and add excitement to clubs.
Digital opportunity looms larger
Increased attention was given to Walmart’s multichannel efforts in this year’s supplier survey — and for good reason. Amazon.com is now in a virtual dead heat with the dollar store channel in terms of the retailer/channel that suppliers view as the most significant competitive threat.
Walmart suppliers are right to be concerned about Amazon.com given the pace at which the $48 billion company, now the nation’s 10th-largest retailer, is piling on sales and expanding its reach into new categories. Walmart’s online sales now total $9 billion, as Neil Ashe, president and CEO of global e-commerce, revealed recently.
Despite their concerns, the digital arena is an area of great growth potential, and suppliers are excited about the prospect, with roughly 75% of those surveyed indicating they already sell products online. However, survey results also show a large swath of suppliers who registered a middling level of agreement with the statements “Walmart is headed in the right direction in terms of its online/multichannel strategic initiatives,” and “my team understands Walmart.com’s various strategic initiatives and priorities.”
That a higher percentage of folks didn’t register a stronger level of agreement in these areas should be a source of concern for Walmart.com as it has aggressive growth plans in place and will need the support of suppliers to execute its strategies.
An area in which Walmart.com should feel encouraged is that 18% of suppliers expressed the strongest level of agreement with the statement that they view Walmart.com as an integral part of the new item introduction process. Another 22% expressed the highest level of agreement with the statement that they are highly focused on growing with Walmart.com. Unfortunately, 21% of respondents also expressed the highest level of agreement that Walmart.com is challenging to work with.
While the signals are certainly mixed, it is perhaps understandable given that the pace of change in the digital world can make it difficult to keep track of what’s going on. It was only two years ago that Walmart intensified its multichannel focus with the creation of its global e-commerce group. Ashe didn’t join the company until this past January, and the recent analysts’ meeting was his first time presenting a comprehensive overview of the strategy. Ashe gave investors plenty to feast on — describing Walmart’s global network of 10,000 stores, 200 million weekly customers and a commitment to building a next-generation global technology platform to capture a disproportionate share of a worldwide e-commerce marketplace McKinsey & Co. expects to reach $1.3 trillion by 2015.
“It is a fascinating opportunity that we are uniquely positioned to take advantage of,” Ashe said, adding that he is focused on, “how do we do it differently and better than anyone in the world.”
Perhaps the most intriguing development to date is a pilot program involving same-day delivery in San Francisco, Minneapolis, Philadelphia and Washington, D.C. The program leverages Walmart stores in those markets as fulfillment centers for popular products with carriers executing same-day deliveries of orders placed before noon. According to Ashe, with 4,000 points of contact throughout the United States, the service is something Walmart is uniquely capable of executing, and he described the company’s store network as the envy of the e-commerce world.