Even though traffic was slightly down during the annual Black Friday disgrace, human herds were still out in force. Many seemed to be of the opinions that this is a special holiday where they can let their worst instincts show while others appeared to feel that they had a license for legalized “wilding.” We are saddened to hear that this American “tradition” had now spread to the U.K.
This year, there was the usual litany of fist fights, Barbie doll brawls, pedestrians run over by cars in retail parking lots, and women flattened by falling big screen TVs. We also had way too many reports of police officers assaulting shoppers above and beyond the call of duty. In the video above, you can watch as officers appear to needlessly takedown a rather harmless looking woman. You can also see a group of officers repeatedly tasering some poor guy who looks like he’s just trying to get away from being tasered…again.
Retailers endlessly promote this insanity to drive excitement, foot traffic, and impulse buying. They know exactly what’s going to be rampaging through their doors and if you get hurt, you should sue them. Of course, you might be asked to explain why you would put yourself in a situation like that in the first place.
It appears that at least some people are beginning to wise up. Brick and mortar traffic and spending over the Thanksgiving weekend fell as internet sales boomed. Retailers also started offering deals days and even weeks before the main event, which may have helped to dissipate the door busting intensity.
So while Thanksgiving weekend sales were down about 11%, overall numbers for the holiday sales season have been good. The scuttlebutt is that Wal-Mart is doing very well and all internet sales (not just Amazon) are particularly strong. The toy industry is being helped by having a number of hot product lines. Anything “Frozen” or “Teenage Mutant Ninja Turtles” is flying off the shelves. And, a couple of hot lines from Australia’s Moose Toys, namely Shopkins and Little Live Pets, are doing quite well.
Overall, the National Retail Federation is predicting a 4.1% increase in sales this November and December. This year, retailers have the wind at their backs. Gasoline prices are down, which puts more money in consumers’ pockets. The economy has had strong growth over the last six months. Job growth, which began to be noticeable in October 2013 is accelerating, as seen in last Friday’s blockbuster jobs report. The consumer sentiment index has been rising since early summer and consumers are beginning to take on more credit card debt. All of this bodes well for this year’s holiday sales.
Friday’s jobs report was the best we’ve seen in quite some time. Nonfarm payrolls added a seasonally adjusted 321,000 jobs in November and payroll gains for September and October were revised higher. The report also showed that wage growth is beginning to accelerate.
I would caution employers that, for top performers, wage expansion is already here, particularly for key sales positions. Employers may be able to continue to tamp down salaries for your back office staff for a little while longer, but for VP of Sales and NAM’s at top accounts, that’s just not going to work. I’ve seen several clients do without because they don’t want to pay market rates for top sales talent. After the early 2015 trade shows as the toy industry hiring cycle switches to Marketing and Product Development, I expect to see wage pressure for the best people there, too. This might not affect wages for your number five Product Manager, but for top performers the pressure will be there.
Despite the accelerating improvement in the employment statistics, pain persists in a large part of the economy. In November, 2.8 million people had been out of work for more than six months. That’s about one third of the people who are currently unemployed. Also, approximately 7 million people were working part-time jobs because they couldn’t find full-time work. Hire these people. Help them if you can. But, don’t let their unfortunate situation cause you to think that you can continue to keep wages down for top performers. I have yet to hear a client say: “You know, don’t find me a top Target NAM from one of my competitors. Instead, find me one who has been out of work for a year.” If I heard that, I would probably fall out of my chair. Also, please remember, that as much as you’re looking to hire your competitor’s best people…your competitors are eyeballing yours. Things are getting better. You’re going to be forced to reward those people who are ready, willing, and able to run through brick walls. Things ARE getting better. You CAN afford to do so.
Here at Toyjobs, we have been running at warp speed since early August, successfully supplying our clients with the toy industry’s top talent. You can check here to see some of our most recent successes. The seasonal nature of the toy business causes it’s hiring cycles to be seasonal, so the larger share of our recent placements have been in the Sales field. Typically, we get a bit of a breather during the early part of the trade show season. I’m forecasting that after a successful holiday sales season, come late February, a lot of happy toy manufacturers will be looking to add to or upgrade their Marketing and Product Development departments. Ho! Ho! Ho! Let it be so.
Fall Toy Preview: Success Without Crowds
From an aesthetic point of view, the Fall Toy Preview was great. There was no clutter and lots of open space. At the heart of the show on the twelfth floor of the Dallas Market Center the corridors before, between, and behind the booths were as wide as boulevards. Unfortunately, the wide open spaces were the result of there being significantly fewer booths.
Attendance at this show is always tricky to evaluate because exhibitors and buyers are tucked away in closed booth cubby holes for much of the
day. My favorite “metric” is to look over the edge at lunchtime and see how crowded things look around the food court. This year the traffic was sadly sparse. Even the Starbucks line was short (scientific inquiry at its best). If the show were to be judged by looking around and taking a head count, you would think that the show was a failure…but you’d be wrong.
All the exhibitors that I spoke with were in high spirits and had very full dance cards. Buyers were there en masse. Wal-Mart, Target, Toys ‘R’ Us, Amazon, Walgreens, CVS were all well represented. In all, about 350 retailers were in attendance. There was a bit of a kerfuffle when a lone Kohl’s buyer canceled at the last minute, citing Ebola fears, although I suspect it was really more of a babysitting issue. True, both retailers and exhibitors seemed to send smaller contingents than in years past. This certainly contributed to the lower headcount. That said, the teams were sufficient to get the job done. No one seemed to be absolutely scrambling. More troubling is that year after year, more manufacturers seem to be dropping out of the event.
I hear a lot of manufacturers complain about the Dallas Show as a waste of time and money. I have listened to it for years and when I hear it, what usually runs through my head is – “you have unreasonable expectations.” If you think you are going to have a big breakthrough with Wal-Mart or Target at the Fall Toy Preview – that just ain’t gonna happen. If, on the other hand, you work the show as it is intended, focus on getting retailer feedback on product, packaging, merchandising, product packs, and pricing, you will certainly get that. Also, if you can meet with twenty mid-tier retailers in one place over a three-day period, I can’t imagine why you wouldn’t go ahead and do that. My thought has always been, if you go into a trade show with the proper expectations, you will come away feeling successful. Of course, what do I know, I’m “just a headhunter.”
Obviously, the October Trade Show Season is a mess. We have buyers running to Los Angeles during the two weeks prior to Dallas and running back to LA or Hong Kong or both in the two weeks after. For good or ill, the toy industry today is overwhelmingly centered in Southern California. So let’s agree to try to find an appropriate venue in the Los Angeles area. That should be pretty simple.
The bigger problem is scheduling. The reality is that the larger companies like Mattel, Spin Master, MGA, and Jakks Pacific don’t want to show at the same time as the rest of the toy industry. I understand the big boys wanting to monopolize buyers’ time without having them “distracted” by their smaller and often more innovative competitors. Unfortunately, this situation hurts the toy industry as a whole. It’s probably a conflict of interest for the largest companies to sit on the TIA Board, while at the same time undermining TIA events and initiatives which are meant to support the industry as a whole. It’s pretty clear that if the TIA scheduled an October show in the Los Angeles, then the big boys would just move their events to before or after it. Since they’re not going to play ball with the rest of the industry, here’s a relatively simple solution which should serve everyone.
Let there be a two week Toy Trade Show located in the Los Angeles area in October. During the first week, the largest companies can use their current spaces and exhibit their wares in the same way that they are doing now. So as to not discriminate, any other manufacturer who feels that their product line and sales volume is strong enough to peel buyers away from the big boys are welcome to rent space and try to do so. Keep in mind that buyers are going to have to get into cars and drive in Los Angeles traffic just to see you so you may be disappointed.
During the second week, the TIA can identify and arrange for a venue for all the other exhibitors, which should be a convenient one stop shop. Since the toy industry is clearly unable to arrive at and adhere to a common sense solution like this, it is up to the buyers. It is the buyers who are being run around willy nilly. It is time for them to be the grown-ups in the room and play some hardball. The buying community should come together and go to the TIA and say, “Arrange this for us. This is where we will go and this is when we will be there. If a manufacturer wants to see us, this is where they should be – end of story.” That should get someone’s attention. Do I really expect Target to kick Mattel out for not being in attendance? No, but Mattel might find that three or four feet of their shelf space was given to somebody else. Be there or be square. As for me personally, I sorta like the idea of being in New York in October and Los Angeles in February.
Meanwhile back in the USA, the economy continues to improve. In September, the headline unemployment rate fell to 5.9%, the lowest level since July 2008. Wage growth has continued to lag but that is typical of an economic recovery. Overall wages won’t rise until the talent pool grows tighter. U-6, which includes consultants and part time workers who would prefer full time work remains stubbornly high. A possible explanation are the rules imposed by Obamacare, which require employers to provide health insurance to most full time workers but not to part timers. That is causing some employers to control schedules so that people don’t work enough hours to qualify as full time.
There are reasons to be optimistic about the upcoming holiday sales season. Retail sales rose broadly in August and consumer sentiment hit a 14 month high in September. According to NPD, US and European toy sales will be up 3 to 4 per cent this year. Even beleaguered Toys ‘R’ Us had its first half comparable store sales turn positive for the first time since 2010. We have hot products which will drive consumers to the stores. Anything Frozen is flying off the shelves. Minecraft has addicted a generation of 8 year olds. Teenage Mutant Ninja Turtles are inexplicably back big time. Moose Toys has several hot lines with Shopkins, Little Live Pets, and Mutant Mania. Lastly, cheaper oil will lower gasoline prices, which should increase purchasing power for U.S. consumers in time for the holiday sales season.
Toy industry hiring continues to be strong but the mix of job openings continues to be abnormal. For our thirty plus year career, two-thirds of Toyjobs searches have been in Marketing and Product Development. Another 25% were Sales with the rest being “other” (QA, supply chain, etc.) Since last October, when toy hiring rebounded sharply, about 90% of searches have been for Sales Execs. That continues to this day. The toy industry being a seasonal business also tends to hire cyclically with August through December being the hiring season for Sales people. February through July tends toward Marketing and Product Development. I’m hoping that predictions of a strong holiday sales season prove true and that it stimulates a Marketing and Product Development hiring binge next Spring. We will have to wait and see.
All the best,
The U.S. economy added jobs at a steady pace in July as job growth has had its strongest six-month stretch since 2006. Confusingly, the headline unemployment number (U-3) actually ticked up from 6.1 to 6.2%. This was largely because more people re-entered the workforce. Typically, a lot of people “leave the workforce” or stop looking for work during the summer months as well as during the holidays. This summer the hiring environment has been strong enough that a lot of people took themselves off the sidelines and got back into the job hunt.
A variety of talking heads have been spending a lot of time bemoaning the lack of solid wage gains. As someone who has spent three decades in the employment business, I can tell you that wage growth accelerates as the labor market tightens but there can be a considerable lag time. During the economic downturn employers held the upper hand in compensation negotiations. People were desperate to hold on to their jobs or to land a new one if they were unemployed. The perception (and fervent wishes) of employers is that this is still the case. There is a dialectic effect where perceived negotiation power swings between employers and employees and there is almost always a lag time of a year or two before the group holding that power realizes and admits that it is waning and even then they fight like hell to retain it. Today the process hasn’t even begun because while the employment picture is consistently strengthening we are nowhere near the tightened labor market.
There are two interesting asterisks of note in the U.S. employment story. The first is U-6 which includes part time workers who would prefer a full time job and workers who aren’t actually looking for work but would take a job if it was offered to them. U-6 has remained stubbornly above 12%. This reflects a lot of people engaged in consulting (there are certainly a lot of them in the toy business) as well as a lot of companies who need more pairs of hands but are not yet confident enough to commit to them as full time employees. Some of this also reflects the deleterious effect of Obamacare with businesses fighting to keep their employees under a thirty hour work week which would qualify them as “full time.”
The second asterisk is that it is widely unreported that the “white collar” population holding a college degree enjoys only a 3.1% unemployment rate while for those without a high school diploma the rate skyrockets to 9.6%.
Focusing on the toy industry, hiring continues to be robust. For most of my thirty plus years, after an early summer slow down there would be an abrupt jump in search starts in late August. This coincided with goods being shipped to retailers’ warehouses. An order can change for almost any reason but once the pallet is on the retailers’ fork lift, manufacturers begin to feel like they’re on more solid ground. At the same time, senior execs returning from vacation would be jolted into the awareness that the following years sales season would begin in Dallas in about a month’s time. If they wanted to make adjustments to their sales staff they needed to begin looking at that immediately.
Last year … that didn’t happen. Retailers for the most part were a gloomy and pessimistic bunch. They were keeping inventories tight and bringing in goods as late as possible. The usual late August jump in search starts didn’t come. In fact, September was completely dead. Then, when goods finally did ship in very late September, all hell broke loose and manufacturers began hiring like crazy through the end of the year.
This year, like flipping a switch, Toyjobs phones started ringing off the hook with Sales searches during the last week of July and first week of August. Something had changed, but what? The retail environment certainly has not been all that good. Several of my clients have told me that this year retailers have planned to receive goods in a much more orderly fashion. After tracking the sales of small initial orders that arrived in June, they are bringing goods in stages rather than all at once. This allows the retailer to better control inventories and, in theory, allows the manufacturer to better control how much product they make. Of course, the lead times are still too short so that doesn’t really help manufacturers as much as advertised. In any event, this practice shortens the manufacturers sweat and fingernail biting period and they seem willing to start their sales searches soon enough to actually complete them by the Dallas Fall Toy Preview.
So, you may ask, “If there are so many sales searches why aren’t they posted on your job board?” That’s a good question and there are really two reasons. First, we like to get most of our candidate gathering work done before we post our searches. This is because part of our job is to evaluate search candidates against each other and focus our clients attention on those that we think fits their particular opportunity the best. This saves them time and effort. They like that. In order to facilitate this we like to have the bulk of our candidate selection done before everyone starts raising their hands. That way once people start contacting us about a posting we are better able to see where they fit in that searches candidate pool.
The second reason is for purely competitive purposes. There are a couple of recruiters out there who don’t have much in the way of a client base or repeat business. The reason for this is that they spend endless amounts of time and energy puffing on and on about how great they are but have a pretty poor track record when it comes to actually fulfilling searches. With a lot of time on their hands these recruiters continuously eyeball our job board and they try to worm their way into the search process. Since all of our searches are exclusive to Toyjobs, that rarely happens but it can be very disruptive to both our clients and candidates.
So there you have it. At the current time toy companies are aggressively looking for Sales Execs. Toyjobs is working on a large number of Sales searches. Look for them to pop up on our job board in the coming weeks. In the meantime, you very well might be hearing from us about a search that we haven’t posted yet.
Enjoy the rest of the summer!!
Toy Industry hiring continues to be strong and the job environment seems to be close to back to normal. I don’t want to “call it” until we see what search start volumes are coming out of the summer doldrums. The usual mid-August ramp up was delayed last year until early October. I’m a big believer that hiring in the toy industry is event-driven. One event trigger is when the product ships. When that happens, companies relax a little bit and feel better about themselves and then start hiring. Last year, retailers delayed having goods shipped until late September/early October. I’m guessing that will be a structural shift and goods will continue to be brought in later as retailers continue in their never ending quest to shift as much risk as possible onto “their partners” in the seasonal fashion goods business.
It would also be nice to see an uptick in Marketing and Product Development jobs. Prior to the financial crisis, those positions were Toyjobs’ bread and butter. During the crisis whatever hiring there was focused on safety, sourcing, and sales. That only makes sense: there was a big product safety brouhaha in 2007 and safety issues were put under a magnifying glass. Regulations (some ridiculous) were constantly changing. Sourcing is simple code for “beat down the prices at the factories.” Sales, well we all want more sales and many business owners and senior managers subconsciously (I’m being kind) blamed poor sales on their Sales guys rather than the economic collapse. In any case, Marketing and Product Development jobs seem to be just starting to pick up. That is a sign that toy companies are moving from a defensive position and are looking to do new things. For me to declare the hiring environment “back to normal” it is important for that trend to fully develop.
Many people have been able to change jobs over the past year and that looks set to continue. Unfortunately, there are far too many people who have been unemployed for a long time. For people who have been out of work for three or four years, things are extremely tough. If you have been consulting, it is important to list what projects you worked on and what companies you did them for on your resume. Also highlight them in your interviews. For the long term unemployed who haven’t really been doing any consulting it may be time to reinvent yourself and perhaps even reset expectations. I know that is very difficult but it may be even harder to find your way back to your old career.
It’s not so much that companies are discriminating against the long term unemployed as much as there is strong competition for every job and that competition includes a lot of people who were doing that job just yesterday. For about five years, even employed people who wanted to change jobs had nowhere to go. Now that jobs are opening up, currently employed people with an up to the minute skill set and current connections are going to naturally be in the front of the line.
If you have legitimately been consulting, you can work your way back inside. If you haven’t, it may be time to reinvent yourself and move onto the next phase of your career. I know that’s very difficult to hear, but not as hard as continuing to pound on doors that aren’t opening.
For the rest of us, we should feel especially grateful for having come through this thing mostly intact and should reach out to help others who need it when we can.
The best to all,
Toy Fair Has Upbeat Vibe – Toyjobs Has 3rd Best Month Ever
After the requisite snowstorm, New York Toy Fair opened up Saturday night with the annual TOTY Awards dinner. Shirley Price and her team did a fantastic job and this event was even more fun than usual. It was especially gratifying to see that six of the twelve category awards were won by companies that have been in existence for less than three years such as Goldieblox, Choons Design and Just Play. Choons Design’s Rainbow Loom won three category awards as it cruised its way to the Toy of the Year. So much for the carpers and back benchers who say that only the big boys win awards.
There were several inductees into the Toy Hall of Fame including Jill Barad, who gave a rousing speech which graciously gave shout outs to numerous mentors. Jack Friedinan of LJN, THQ and Jakks Pacific; Horst Brandstatler, founder of Playmobil and Wham-O founders Richard Knerr and “Spud” Melin were honored as well.
Next on the event calendar was the annual Women in Toys Dinner. Somehow Genna Rosenberg, Ashley Mady and their team continue to make this event better every year. How do they do that? …and how will they keep it up? Amongst the Wonder Women Award winners were Rita Raiffe of Gund garnering a well deserved Lifetime Achievement Award and Debra Sterling of the runaway start up Goldieblox. I think the award for funniest acceptance speech of the evening probably goes to Michelle Litzky who pretty much cracked everybody up.
The always elegant Joan Luks will be stepping down as President of Women in Toys. Joan is someone who always put way more in to the organization than she took out. I’ll not be surprised if she continues to do that in her post-presidential role. New President Ashley Mady will have a heavy torch to carry but she certainly has the talent and energy to do so.
Toy Fair itself was very positive and upbeat which was a surprise considering that October’s Dallas Toy Preview was a bit gloomy and toy sales didn’t exactly rocket to the moon this past holiday season. Despite the travel-snarling snow, foot traffic was up 14% on Sunday and 9% on Monday. Tuesday was up 3% and Wednesday? …I can’t really tell you because, as is always the case, like a lot of people I went home. All the major toy retailers had buyers there and that includes Wal-Mart, Target, Toys ‘R’ Us, Amazon, and Costco.
What I heard from senior toy executives who were actually showing at the Toy Fair was very different than usual. What they repeatedly said went something like this: “While retailers have already decided on the core of their planograms, there has been a lot of indecision on the part of buyers. We were able to fill a few nooks and crannies simply because we were here.” Interestingly, I heard that from every single company with a booth that I spoke with – no exceptions. I only heard otherwise from several senior toy executives who weren’t showing but instead just walking the show, poking around, and taking a few meetings. From them I heard the usual: This show is so expensive and we’re “really all done anyway.” It seems to me that it is a self-fulfilling prophecy. If you’re not out there pitching at a place where you can meet twenty of your top customers in a period of four days – you may indeed be “really all done anyway.” I would encourage those people to talk to their friends who had full booths at the show and see what they have to say.
Kudos, as always, goes to Carter Keithley, Stacy Leistner and the whole TIA crew for hosting an outstanding Toy Fair. They pretty much had their hands into most of the outside events as well. To paraphrase fast Eddie Felson – Toy Fair is Back!
Mirroring the regained enthusiasm at New York Toy Fair, Toyjobs has continued to knock it out of the park. After having out best month in thirty-two years in December, we quickly followed with our third best ever month in February. Toy companies are looking at new talent and they’re pulling the trigger. Best of all, companies are hiring senior people which means they’re not just doing patchwork. Toy companies are looking to do new things and they need senior people who can find and execute on new opportunities.
The increase in hiring is reflected in the economy at large as well, Non-farm payrolls grew by an encouraging 175,
000 (seasonally adjusted) in February despite severe weather challenges in much of the country. Even though Toys ‘R’ Us started rolling layoffs last Tuesday culminating in a “Pink Friday,” the economic picture is brightening. The point of inflection appears to have been at the beginning of last October. Let’s hope that the economy continues to improve and that hiring keeps on keepin’ on. It has every indication of doing so. Spring may at long last be at hand.
All the best,
In December 2013, Toyjobs recorded the best month ever in its thirty-two year history. Not only was hiring strong in general, but many toy companies were hiring people at senior levels. This is a strong indication that the industry as a whole has left behind its primarily defensive posture of the economic downturn (teenage ninja heads in shells) and is now aggressively looking for opportunities (mutant turtle heads popping out of shells).
Typically, toy recruiting slows in January and February as the industry is focused on running from one trade show to the next. However, this year activity has not let up and search starts have continued to be strong. It can be difficult to actually close searches during this time period with so many people on the road but I think that the high level of search starts bodes well for toy industry hiring in February, March, April, and beyond.
Holiday toy sales were down slightly and no brick and mortar retailer stood out as having a great year. Several retailers came into January with particularly grim results. Toys ‘R’ Us and Kmart staggered out the holiday season punch drunk and wobbly. Costco’s toy department bombed. Even Dollar stores and the value channel were hurting. Our award for the worst behavior for a retailer this season goes to Target. Not only did Target have a massive breach of consumer data, but they are now compounding it by trying to strong arm suppliers into paying for their credit card problems.
Many retailers overpromised consumers on their ability to deliver late purchased goods. Some were advertising that orders placed as later as December 22nd would arrive before Christmas. This will only serve to increase already growing consumer cynicism over retail practices.
Retailers also cut into their own margins with “discounts” which were early, constant and deep. Even though many of these “discounts” were built into the purchase price, a lot of potential earnings for both retailers and their suppliers were still left on the table.
On the positive side, online retailers like Amazon, Zulilly and others absolutely knocked it out of the park. Offering both price and convenience is an unbeatable combination and physical retailers have a difficult task ahead in figuring out and presenting their value proposition to the consumer. Personally, I can’t think of a single reason why I would want to be caught dead in a large retail store or mall during the holiday shopping season.
Total retail sales also improved. I can’t help but think that without any red hot toy smashes in 2013 that there were a lot of Xboxes, iPads and Microsoft Surfaces under the tree. Total retail sales are an indicator of the economy as a whole. As it improves, toy sales should come along for the ride…as long as we have engaging product.
Most economic data continues to improve, including the unemployment rate with the headline number (U-3) dropping in December to 6.7%. That said, the headline unemployment number is greatly understated on two fronts. First, a more accurate gauge of financial pain is U-6. U-6 represents unemployed people, plus people who are employed as a consultant or on a part-time basis but would prefer full-time work. It also adds people who have quit looking for work but would take a job if they could find one. U-6 currently stands at 13.1%. Another area of understatement is that U-3 does not consider people who have left the workforce or have stopped looking for work. You may think – “Well, how do they do that? How do they just decide to leave the workforce?” The answer is that most of America is populated by two income families and when one of the earners is either unemployed or underemployed, then the entire household is financially pinched. Rather than thinking about a 6.7% unemployment rate, a more accurate way of looking at the employment picture is that 20% of two income families are living worse off than they used to. As depressing as that may be, statistics are just a snapshot of a moment in time. The best way to view them is by looking at the trend history. Both U-3 and U-6 have been consistently improving. Unfortunately, the trend in people leaving the workforce is not. However, that should turn around as the first two continue to improve.
Looking forward, most economic data is improving. Employment data is improving, it’s overstated, but the trend is consistently growing better. Retailers had a difficult year but it wasn’t terrible –except for a few of them. Because retailers played it very cautiously in 2013 – ordering fewer goods and ordering them later – inventory levels are okay and there is not a lot of carryover. I expect retailers to play it the same way this year even if once again it means losing out on some sales due to empty shelves late in the holiday season. Most importantly for toy industry hiring is that manufacturers are hungry again and are actively looking for opportunities. This means they will need key people to recognize and seize those opportunities and more people to execute on them.
I look forward to seeing y’all at The New York Toy Fair!
All the best,