Digital Retail: Is the Future Here?

It was refreshing to hear two expert panelists offer differing opinions about how to use the Web for online retailing. During this afternoon’s session, Ed Schmults from FAO Schwarz extolled the virtues of Web 2.0 technology for creating innovative online marketing solutions. Fellow panelist Greg Ahearn from Toys“R”Us, U.S. argued that it may be premature to focus on Web 2.0 when the technologies of Web 1.0 haven’t been fully realized yet.

Schmults’ position was that Web 2.0 offers rich media opportunities such as blogs and YouTube video postings – thus providing viral marketing opportunities to smart marketers. By turning over some creative control to the customer, marketers help keep their brand relevant on a personal level – and your customers become stakeholders in your product and help do your marketing for you.

Ahearn argued that there is tremendous growth in just getting back to the basics of Web 1.0. He focused on the value of search engine optimization – making simple changes to your current website – to make it easier for web searchers to find you. These changes can be made in minutes rather than days or weeks, and you can see immediate results.

Clearly, both experts set out practical blueprints for getting the most out of your online marketing. The most important message of the day is that you have to stay connected with your customers – no matter what road or method you choose.

Surprise: Girls are Leading The Way With Online Play

In this afternoon’s session Marketing in a Digital Age, moderated by Julia Fitzgerald of VTech Electronics, there was consensus among panelists Anton Rabie of Spin Master, Marc Rosenberg of Zizzle, and Tim Kilpin of Mattel that girls are the primary users – and thus, the main trendsetters – of online play.

Rabie observed that girls are faster to the digital world due to the social networking aspect and customization of many online sites. Successful sites such as Club Penguin, Funkeys and Neopets were designed from the beginning to have a sense of community and strong social aspects. In the case of WebKinz, the user has an emotional attachment to the physical product (ie, collectible plush) that opens the gate to the online playground. It’s this emotional connection to a physical product that differentiates the successful online site from many of those that fail.

Kilpin noted the importance of using television advertising to drive consumers to the web, which then drives the consumer to the physical product. Having said that, he also emphasized that participating in digital is about taking chances. No one really knows what will work and what won’t. It’s important to experiment slowly and take baby steps.

This sentiment was echoed by Rosenberg, who said you don’t have to spend a lot of money to promote your product if you’re creative. You have to try everything. He recommended less-expensive microsites for new products or smaller companies with limited budgets, as opposed to more expensive television advertising or major websites.

They all agreed that digital must be a core component of your marketing mix, and that building your brand online is of crucial importance to your ultimate success. Above all, you must be true to your brand.

The Knowledgeable Consumer is Here to Stay

Jonathan Peck, President of the Institute for Alternative Futures, enlightened ToyCon attendees about the importance of developing sensitivity to the marketplace by learning and beginning to understand both cognitive and emotional development. He offered descriptions of seven stages of human development (Help Me, Tribal We, Gratify Me, Righteous We, Competitive Me, Holistic Us and Interdependent Me) and provided insights as to how understanding these stages can benefit toy manufacturers and marketers.

He went on to warn that the Knowledge Revolution has arrived and never again will the consumer not be informed. Peck, internationally known for his forecasts, offered this to the toy community: “Knowledgeable consumers are here to stay and as a manufacturer you must play to the smart market.”

Peck encouraged everyone to continue to evolve and never stop learning. He offered 5 tips to staying ahead of your competition:

• You must have a vision
• You must create models where you consider the world outside your own business – segmented markets, the international connection, and the external political landscape
• You must use forecasts even if they seem far outside your comfort zone and current business environment
• You must create and be aware of scenarios that address uncertainty in various disciplines – technology, value systems, ethics and economics. Two such scenarios are The Unholy Trinity (where the global economy, global warming, and global communication breakdowns collide) and the China 2028 Scenario (where China’s emerging global marketing power will be either a major challenge or opportunity).
• You must always apply the future to today’s work

The NPD Group Shares Good News for Digital Play

Anita Frazier, analyst for The NPD Group, had good news for conference attendees this morning: first quarter ’08 toy sales are up around 1%, with sales of Web-connected toys increasing during a 12-month period from $67 Million in 2007 to $411 Million in 2008.

What’s more, 93% of all households bought toys last year, with the average household expenditure around $191. (Households with children ages 6 and under spent $485.) The fastest distribution channel for these toy sales is the Internet, where sales grew in a 12-month period from $1.5 Billion in 2007 to $1.6 Billion in 2008 – an increase of 6.7%.

A Historic Decision

It was announced at the General Session this morning that the TIA Board of Directors formally adopted the proposed Toy Safety Certification Program (TSCP) yesterday.

TSCP is the toy industry’s detailed response to the pending Federal safety requirements through a certification system to enhance both the reality and the public’s confidence that toys are sold in the U.S. market are safe. It will be further developed in 2008 and rolled out in 2009. To read the entire TSCP draft, click here.

DAY 2 - A CALL TO ARMS

Toy Safety Matters: Mobilizing Our Members

Carter Keithley, President of TIA, outlined the TIA outreach efforts underway to help counter the 170 toy-related legislative bills in 32 states. The small differences between each state’s proposals – with no measurable increase to product safety – would create a nightmare for the industry.

TIA has undertaken a lobbying and public affairs effort in priority states to stem these legislative initiatives and media information. Keithley called for all TIA members to reach out to their legislators to deliver a common industry message – on the great lengths the industry already goes through in the name of toy safety, the importance of a uniform national approach, and industry efforts to enhance our already robust toy safety system. A TIA "Call to Action" will be sent to members in the coming days.