This content originally appeared in the March-April print edition of Toy & Hobby Retailer. To be the first to access exclusive content like this, subscribe to the magazine here.
Editor, Imogen Bailey, speaks to the executive director of the Australian Retailers Association (ARA), Russell Zimmerman, about the current toy retail climate as well as his predictions for what 2019 has in store for toy retailers.
How is the industry going post-Toys R Us closing?
Well I think probably what’s fair to say on this comment is that we can only look back on what’s happened in other industries and we know that when the REDgroup – which was the booksellers that went out of business some six, seven years ago – we know that there was quite a large amount of trade that was then picked up following on from that by existing retailers.
But I think we also need to remember too, that we’re now a number of years down the track [since] it occurred with the booksellers and the trade has changed completely in the fact that we now have a much bigger online trade.
So I think it’s a bit of both. We expect to see some of that trade to go to existing retailers, but I think that the existing toy retailers are going to [have to] make sure that they work hard because people still will go to online, both local and overseas, to buy those goods.
What are your predictions for retailing in 2019? Will people ditch an in-store experience for a cheap price online?
I think what we’ve got to remember is that online retail represents seven to seven point five per cent of the total retail industry – and that’s across all categories – so I think it’s fair to say that most people still enjoy going in and buying goods at a bricks-and-mortar store, absolutely they do.
But there is definitely a trend to move from bricks-and-mortar to online and retailers have got to be very aware of that. If they’re not, they’re probably going to, pardon the expression, get left out in the cold.
I think what [retailers] have got to do is, they’ve got to look at the marketplace now and it is changing and [online retailers like] Amazon can be your friend or your foe. You should certainly look at the ability to sell through those platforms. I think you’ve got to make sure that you’re engaged with those platforms to ensure the success of your business. I think anybody who turns a blind-eye to that now is running a very dangerous race.
There’s [also] a couple of really interesting things. The big retailers – not all of them – I think struggle on how to give really good, personalised service. And what we are actually seeing is small, independent retailers are able to give really good – be it online or in-store – personalised service.
I think the thing that’s going to make the difference between the also-rans and the great retailers into the future – as it always has been really – is the ability to give great, personalised service.
I live in a suburb in Sydney and we have a toy shop around us and I think they’re probably one of about five or six, but I think it is fair to say, that they do an incredibly good engagement job with their customers.
I think that what it is all about: specialised service. Know your local customer, those sorts of things, I’m amazed at the amount of small retailers that do that really well.
[The other thing is] the growth trajectory in online won’t continue to grow as quickly as it has over the last four or five years, it will start to flatten out as it gets from seven to say 12 or 13 or 14 per cent.
But I think the fair thing to say is that in shopping centres, we’re seeing changes in shopping centres and the types of shopping centres that we’ve got.
So, if you’re in a major regional shopping centre, it’s going to be different to a sub-regional to what I see in a neighbourhood centre and I think it’s going to be a remix of the balance of those shopping centres.
[Shopping centres] will have to change their mix and will have to put other things in there to ensure the long-term viability because if you haven’t got enough retail shops in there and retailers aren’t doing well enough, then the retailers are just going to walk away from those centres.
They’re going to have to change their mix to ensure that the retailers that remain there have got the ability to service customers and have still got customers coming in. That’s going to be a slow, but sure change.