Toy World Magazine February 2021

Page 30

Talking Shop

Delivering the goods With national lockdowns forcing the closure of bricks & mortar toy retailers once again, this month we turn our attention to the online space. Rachael Simpson-Jones spoke to several major operators in the digital field, to find out how their businesses have responded to the circumstances of the pandemic.

Edmund Lim - Maqio

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aqio started as an online retailer in 2010 and opened its first physical toy store in 2011. Within a year, our online sales had grown so much we made the decision to close our physical shop in Buxton and focus purely on online. For the first few years we kept things quite low key, preferring to build on the relationships with our suppliers rather than the Maqio brand. Since then, we have continued to grow, and we are now predominantly a branded discount/value online retailer with a large focus on toys. At the end of 2018 we decided to reopen a dedicated toy website - www. maqio.com. We sell on numerous platforms and websites around the world, big and small, which sets us apart from other online retailers. Suppliers appreciate the fact that Maqio works closely with them on regular product as well as promotional items. We never bite the hands that feed us; over the years, we’ve developed a deep understanding of the value market and we take great care not to operate in a way that would negatively affect it. We spend heavily on advertising, driving traffic to the product, even on the promotional side. Being online, everything we do is visible and exposed. Suppliers recognise that working directly with value and discount retailers means they retain a degree of input and they won’t

kill the price - which then affects the whole market. We work differently. Coming into this year, our strategy was already quite developed. We try to source toys customers really want, drawing on the data compiled from the platforms we operate on to guide purchasing decisions. We know the most in-demand brands within each country and on each platform, and we aim to offer them even if they are a loss-leader. The advent of Amazon and Google Shopping means consumers can find the best pricing on product very quickly, so we have no choice but to match Amazon pricing if we want the traffic. We are careful in what we offer; we stock key TV-advertised ranges, and work closely with brands on promotional offerings. When Lockdown 1 was announced, we immediately called a remote meeting of both our warehouse and office teams, believing that nonessential online retailers would also be forced to close at some point. At that point, there was so much uncertainty, but we had a clear focus on ensuring Maqio was left standing by the time lockdown was over. We believe in our people, so we offered our staff incentives for their hard work during the period, and promised not to hire more staff during the lockdown. We kept this promise, despite a number of staff having to self-isolate at times – though luckily, no actual cases of Covid-19. We all worked really hard. The first lockdown was like a mini-Christmas for us, but we saw huge sales and growth which made the long hours and the 7-day working weeks some of us chose to work worth it. We can’t take too much credit for the growth we saw, though. The harsh reality is that many shops were shut for the majority of this time, and our increase in sales was a natural response to this. Sales dropped once lockdown lifted, but our 2020 figures were still up on 2019. The pandemic has accelerated the growth of online shopping by several years, and consumers who previously much preferred to shop in bricks & mortar stores are beginning to trust online retailers much more. By the time Lockdown 2 happened, the online space was much more competitive. Retailers were prepared, they’d used the first lockdown to bolster their online presence, and consumers were far savvier in their shopping habits. YOY 2020 was +57% up, so it was a great year. Our workforce adapted to the situation brilliantly, and at the same time our suppliers supported us well too. Without these strong relationships, we wouldn’t have seen such strong growth throughout the year.

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Our suppliers include all the big names – Mattel, Lego, Hasbro, Playmobil, Spin Master and many more. Winning Moves has been fantastic; board games were obviously a strong growth category throughout 2020. I don’t want to dwell too much on the relationships that weren’t so positive last year, because we understand that the situation was totally unique, and that companies were simply doing what they needed to do to make it through the period. For example, we saw a big reduction in product from one supplier last year even though they were +50% up. In a nutshell, the company just didn’t have promotional items to offer. Everything was selling well. In fact, I spoke with the director of that company just the other day; we still enjoy a good relationship. We won’t just buy in-demand product in huge numbers without having proper margins in place. People think that online retailers have a smaller cost base. Admittedly, we don’t have the rent and rates to pay that brick & mortar retailers do, but as we sell across multiple platforms we have to factor in 10-15% commission. You also need to pay for advertising, which can be costly. Some brands spend minimally on advertising and still enjoy good sales, but they tend to be names that are established and have been a part of the marketplace for many years. The majority of businesses out there now have to spend heavily to secure sales. At the back end of last year, we brought in a new marketing team, and although our spend is similar to previous years, it’s now a much smaller percentage of our overall figures. We’ve identified more resonant key words and better online placements, and we’re seeing much stronger conversion as a result. This takes time and investment in people. Achieving that +57% growth I mentioned earlier doesn’t come easily. Our Christmas best-sellers are largely exactly what you’d expect and what other retailers are reporting; construction brands including Lego, board games like Hasbro and Winning Moves’ licensed Monopoly offerings. Barbie sales have been phenomenal as the increased diversity of the range has really appealed our customers, and Harry Potter has been a massive licence for us; we have seen strong sales across puzzles, figures and games. We have also seen huge