In a world where mass-market retailers continually strive to streamline, crafting centralized distribution, promotion and marketing plans to serve customers across huge swaths of land, it’s easy to lose sight of activity taking place at store level. The need to pay attention to product performance at individual outlets can turn a failing SKU into a winner or inspire nationally palatable packaging designs, and the importance of being on a first-name basis with local store managers can’t be underestimated. At least that’s what Toronto-based toyco Spin Master has learned in working the US market over the course of the past year.
The ever-expanding company that now employs more than 600, gave its in-store merchandising unit a formal name, logo and mission about a year ago. Spin has its STORM (Special Team Operations Retail Merchandising) members covering every major market in North America, dividing coverage and team names according to region. So on the West Coast there’s team Inferno, while the Texas Tornadoes look after the South East and the Whirlwinds swirl about North Western retailers – not to mention the Florida Hurricanes in the South and the mid-West Thunder.
Of course, store-level merchandising is not a new practice for toy manufacturers, but unlike many companies that employ contract workers to do the job, STORM is comprised solely of full-time Spin Master employees. ‘Being full-time employees, they’re invested enough to speak up about what is and isn’t working at store level,’ says Tony Porciello, district manager of retail operations. ‘They now feel part of something bigger,’ adds director of retail operations and customer care, Dave Balkaran.
In fact, what this sense of belonging has engendered is a culture where individual merchandisers are eager to absorb all the info they can about Spin Master’s product lines – how kids play with the toys and national marketing efforts coming down the pipe – and then serve as a resource to local and area store managers. And to keep interest up, the company has started holding an annual Merchandising Olympics where it brings STORM members together to test out new toy lines. For example, at the most recent event, teams were set up according to their STORM divisions and then faced-off in a series of Baku-brawls, putting their Bakugan knowledge to the test. In learning how to play with the toys, the merchandisers can then use the knowledge to demo the product at store-level events and educate retail managers. So while it might seem like just fun and games, Porciello and Balkaran contend that the money and resources poured into STORM are well worth it. The company has actually quadrupled the size of the unit in the last year and intends to hire more merchandisers, further widening coverage.
‘STORM is at the frontlines of our business,’ says Porciello. ‘The merchandisers are our eyes, ears and public face…they know what’s selling well, what’s not in the stores and can make recommendations on what to switch out and where a store manager can place more hot product.’ And the cumulative effect of that personal touch is measurable, notes Balkaran. ‘We know where we have merchandisers and where we don’t and can see the impact/lift on sales at the stores where they’re working.’ And so far lift at STORM stores is ‘similar or even higher than what we would see with traditional TV advertising,’ he says. ‘So that’s a big impact.’
What the store-level force is particularly good at, says Balkaran, is determining what products do and don’t appeal to consumers in a particular part of the country and giving slower starters a boost. For example, the STORM team in the South West was quick to point out that Spin’s Air Hogs Zero Gravity R/C vehicles that can climb walls and ceilings would be unlikely to sell well in the region. It turns out that the houses in that part of the US are largely covered with stucco. Guess what? Zero Gravity is not particularly good at traversing stucco walls. The South West team then asked head office if it could highlight a different Air Hogs product, saving potential sales losses.
On the flip side, STORM teams outside of the South West were able to goose Zero Gravity sales, which started off slowly when the product was introduced to mass retail this past fall. ‘Bakugan can sell itself,’ says Balkaran. ‘The merchandising team is good at focusing on products that aren’t selling well.’
To that end, STORM reps went into stores armed with samples and started performing live demos for individual managers. ‘They said it could climb ceilings for a US$29.99 price-point and nobody believed them,’ Balkaran explains. But the simple act of showing managers that Zero Gravity delivered on its promises prompted the placement of initial orders that kept getting refilled once the toy started selling through. Since then, says Balkaran, Spin Master has held nationwide promo events for the product at Walmart and Toys ‘R’ Us.
To keep the lines of communication and such valuable info flowing on a timely basis between head office and STORM team members, Spin Master has just equipped the merchandisers with handheld devices powered by proprietary software. The Blackberry-like handhelds are pretty much portable intel centers. They give the staff the ability to take pictures of in-store displays and competitive products, send feedback on individual product performance, and even show store managers/buyers the company’s latest commercials along with pictures and packaging-size specs for any item in the toyco’s inventory.
Porciello says being able to transmit pictures of retail setups from different stores to a buyer, for example, can prove invaluable. In one instance, a STORM member set up a one-off display for some Marshmallow furniture SKUs and flipped the image to another buyer in the area. The buyer tried it out, and it worked so well the concept went chain-wide. ‘And it all started with one merchandiser’s idea,’ muses Porciello.