Can you believe it, 2022 is here already. At Keycraft, we wish all of our valued customers and suppliers a very happy new year! We hope you enjoyed the holiday season in your own fashion, and are in the mindset to create a positive year ahead.
To help your toy retail business navigate ongoing challenges and come out on top, our consultant and account management team have pulled together the top retail trends to plan for. It’s definitely not smooth sailing yet, but we can equip ourselves to ride out the swells and achieve strong results regardless.
Here are the top 5 retail trends for 2022 as we see it:
Stock shortages are a leading cause of ongoing uncertainty. Chinese factory productivity still remains tentative due to stringent Covid-19 isolation measures. The shipping industry headwinds and backlogs also continue for now. Having enough stock to sustain your business in the current climate is paramount. Especially early in the year after Christmas; a time when importers and distributors may have not prioritized regular delivery as consistently.
We recommend working closely with your vendor partners to understand their supply strategy. Advance warning if your vendors can’t supply stock, as usual, allows planning for alternative toy stock purchases. Ensure you are having these conversations, and ask for time-sensitive transparency in order to avoid the negative business impact of empty shelves or out of stock items. Customer word of mouth is important and can make or break your brand.
The supply chain and shipping industry constriction leads us into inflationary pressures, which are driven by more than just suppressed stock availability. Many consumers are facing rising energy costs, fanning the flames of concern and dampening consumer spending. As toy retailers, this can place pressure on margins if you want to avoid passing on full price increases.
Consumers have still been spending, but in key markets like the US are increasingly choosing more basic toys in response. Experimenting with your stock offering, including more low cost and pocket money toys, is a prudent strategy to help combat price inflation and any increases in consumer price sensitivity. Focus on the windows of opportunity that are available with fast-growing brands that have stock holding.
It’s not just in China that staff shortages are causing retail friction. The UK is braced for ongoing staff shortages due to Covid isolation requirements. It means less strategic buying time if buyers have to do more multitasking, and less shop floor staff to assist customers and help up-sell products with recommendations.
Staff shortages may be an equally challenging one to work around. Enabling staff to continue working from home while isolating is a given. For strategic work, try developing relationships with experienced freelancers or contractors you can call on when necessary. For shop floor staff, more part-time staff who can temporarily cover full days in emergencies, or an agency for temporary workers are potential solutions.
Environmental concerns are influencing consumer spending decisions more than ever. Since the pandemic started, 82% of surveyed consumers say that sustainability is more top of mind. In addition, 78% of consumers said that businesses have an important role in helping protect the environment.
Retailers stand to benefit by meeting consumers’ growing expectations in regards to sustainability. Deloitte found that 50% of people are willing to pay more for environmental and ethical brands. In addition, 28% of consumers stopped buying selected products due to ethical or environmental concerns. Gen Z in particular are adopting more sustainable behaviours than any other demographic.
Brands that can keep up with this evolution by supplying products with less packaging and plastics, or recycled plastics and other eco-friendly sourced materials, can really set their brand apart. Eco-friendly credentials can be used as a USP for online, in-store and window marketing, capturing shoppers who choose more ethical options when presented with a clear choice.
Let’s conclude on a very positive note! Toy demand remains on a growing upward trend. In 2021, the toy market grew at a ‘mild’ rate, but is expected to grow even faster between now and 2026. Globally, the toys and games market is valued at USD 261.65 billion, and it is projected to see CAGR of 9.91% between 2021- 2026.
Whether you operate traditional stores or are purely E-commerce, we should all take advantage of the growing toy market by delivering more innovative and engaging customer experiences. Those without an online presence will miss out on opportunities as the online shopping trend continues to grow.
And yet, although online shopping has grown in popularity due to convenience, people do still appreciate real-life physical experiences. It’s easier to generate impulse purchases in-store, so there is still a benefit in attracting footfall into shops. With stores open again, consumers don’t just want to shop; they want an engaging, personalized experience. To maintain loyalty over online platforms, retailers need an experience that stands out. Unique, novelty and memorable in-store experiences are the necessary ingredient for maintaining footfall.
If you’re not a traditional retail store, like our clients Streamvale Open Farm and Frosts Garden Centres, adding a toy collection can provide an additional revenue stream that also supports an overall more engaging family experience.
Online marketing campaigns and an active social media presence are really non-negotiable nowadays - at least to maintain a revenue growth trend. Taking advantage of new omnichannel marketing opportunities without ignoring the core that has made retail stores successful to date is the modus operands for success.
Keep an eye out for our next article, which will focus on the top marketing online trends to be aware of for 2022!
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