Musings – Operating A Successful Toy Business: A Customer’s Feedback

8 02 2007

My recent experience with a toy store while purchasing my Hot Toys Clark Kent got me thinking of how a good toy store would be to the customer. Many a times, we collectors forget that the toy store operator has to fuss over rental and the other usual business headaches. The bottomline is cashflow. If the $$ are not coming in, the end is near.

The good news is that cashflow is where collectors like myself can and is most willing to lend a helping … wallet. Well, we want collectibles that the store can help to bring in. Saves us the headache of fussing over shipment if we were to deal directly with the manufacturer.  So how can a toy store tap on collectors’ enthusiasm and irrational love relationship with these costly ‘things’?

Well, I’ve listed some thoughts that would go a long way in making the purchase of toys a better experience.

1. Identify product and customer segments

For a start, the toy store could evaluate the performance of each segment of their retail products. Some stores have gone the way of total collector products while some have part collector and part mass market products.

A store would do well to recognise the chasm of difference between a collectible and a mass market toy. A collectible is close to a work of art. Think of a 12″ figure out of Hot Toys, Sideshow or Medicom. These guys are pricey and do not fall in the “buy-it-as-a-birthday-gift-for-a-classmate” category. Special care should be taken in handling them and they should stay out of reach of kids to preserve its condition. The manufacturer has already taken care of the tough part which is to produce a quality product. Now the shop needs to ensure a mint piece falls in the hands of a buyer. Not too much to ask?

It’s sometimes sad to see a beat up 12″ going for a discount. Remember that they came out mint with a horde of others out of the factory. They deserved to be bought at a price worthy of their construction. Anyway, just take good care of these guys!

Now, I believe some understanding of spending patterns of different customer segments is required. Collectors will usually continue to buy the same range of products if what they want is delivered to them consistently with a good experience. So in a way, a certain amount of consistent sales could be expected from this area regularly with new stuff coming in regularly. It then comes down to the question of how to up the sales in that area.

This leads to the next point.

 

2. Have a concrete pre-order model

There is no doubt releases of certain collectibles are highly anticipated by collectors high from a diet of drooling-causing promo pictures on the Internet. They will want to get their hands on these stuff and will have a slight fear of not being able to land one.

If a pre-order system is to be introduced, it must assure the collector that it is a definite purchase under all normal circumstances. Let’s now talk about a shipment falling out of the sky and lost at sea. Or a recall of the entire batch of a product. Under normal circumstances whereby the product reaches the store, there should be one for every customer who pre-ordered.

Whether a deposit is required before-hand is subjective. It works fine for both as I have seen it implemented successfully with local stores. I believe collectors would not really mind putting a deposit as it can be seen as paying less when is is time collect the actual product. 

As a collector I would not want to place a pre-order for a “tikam”-like(luck draw) type of system. It makes no sense to place a pre-order not knowing if you will get it. And we are not even talking about exclusive stuff here.

For the collector, he must understand the implications of a pre-order. A pre-order usually means purchasing at the retail price. However, sometimes there is no telling how the market demand will drive the price of the product up or down. So in a way, it is a risk that must be borne by the collector placing the pre-order.

 

3. Track customer purchases and reward them

While the shop is thankful that manufacturers are producing good quality stuff to make collectors part with their cash, it would be wise to do something to differentiate itself from other collectibles shop. A shop may be the only-guy-on-the-block today but a new kid will come someday with something new! Retaining customers is the key.

The shop cannot afford to treat collectors as faceless. Without loyalty, collectors will go to the best or fastest deal in town. Thankfully, not every collector would go for the cheapest deal everytime.

A good way would be to have a database to track customer purchases. If there several branches of the shop, all should have access to the same database. Some say that it is costly for an IT system like this and it is true. However, it is a worthwhile investment. If it is really unaffordable, then do whatever it takes to do the same thing with pen and paper and effect communication. Good business habits did not happen only with the advent of IT afterall. So there is no excuse.

Customers’ purchases have to count for something. Some shops  reward customers by giving a free upgrade of their pre-orders to an exclusive version by means of a draw. How it is conducted is at the discretion of the shop but at least you show appreciation to customers with such small efforts. Some shops employ a point system similar to banks’ credit cards which can be exchanged for certain items when sufficiently accumulated. You want to encourage repeated sales and make customers think thrice before giving a sale to a rival shop!

 

4. Employ  good frontline staff and guide them!

I can’t emphasize this enough. I observe that most businesses may have management who care about customer service and after sales service. Unfortunately, they are let down by those who actually serve the customer in the shop. And these are the guys that customers will benchmark your customer service level. This is where you either earn or lose a customer.

Management staff should supervise frontline staff to ensure that customer service values are followed through. Given enough time at this, you create a culture. Cultivate this culture long enough and you get a good reputation. This will lead to rave reviews and recommendations. And after all this toil, comes the stream of collectors with the cash to ‘contribute’ to the business. 

Without guidance, frontline staff will sink into operation roles. The mindet will be – “I am the cashier” or “I am the store assistant”. Retailing collectibles require its own set of sales knowledge. One needs to know when a certain company is releasing a figure or which figure amongst the many in the store is the customer asking about. For the uninspired frontline staff, telling customers that there is no stock without actually checking or not informing customers of an available pre-order is sometimes seen as less hassle to get through a day at work. Practise this on enough customers in a week and the boss will be puzzled why sales figures have dropped for the month.

 

In conclusion, I must stress that the decision to purchase is often an emotional one. The facts on a product’s quality and other information will only go as far as making collectors check their budget to see if it is enough. It is the emotional battle that needs to be won to make suckers like us summon the ‘backup heavy artillery’ to support any hectic buying schedule. A good toy buying experience from a shop is key to that and has the power to sway that decision to cause a sweet sounding “ching!” in the shop’s cash register.

 

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