Making it in today’s constricted specialty retail arena is no mean feat, but 24-year-old Denver, Colorado-based toy store Kazoo & Company is finding that off-the-shelf extras like in-store events and a strong web presence are just as important these days as the right product lineup.

‘I know a lot of stores claim that customer service is important, but we really go one step beyond,’ says Kazoo owner Diana Nelson. The store offers freebie services like gift-wrapping, and a few times a month, it channels the cash manufacturers provide for traditional ads into unique in-store events featuring a property or toy line. Costumed characters like Caillou, Peter Rabbit and Carissa (from Manhattan Toy’s popular Groovy Girls doll line) often appear at the 11,000-square-foot store for activities and photo opps, and Kazoo runs music classes with local musicians to cross-promote the CDs it sells.

Nelson says she is also planning to revamp the store’s website, which accounts for about 12% of Kazoo’s sales and has been steadily growing at an annual rate of 1%. The expanded site will feature a monthly, manufacturer-penned newsletter designed to give toycos a platform for educating consumers about their products. ‘For example, BEKA would best be able to tell people about the quality of its blocks, and why customers should drop US$140 on a set,’ reasons Nelson.

Kazoo’s innovative, value-added strategy hasn’t gone unnoticed. The store was named retailer of the year in the ‘under 25 locations’ category by the Toy Industry Association this year. And after two years of flat sales, Nelson says she’s seeing single-digit growth so far for 2004.

Another key to success in the specialty market is hitting on the right lineup of product. Nelson looks for classic brands such as Lego and Radio Flyer wagons, as well as unique products from small manufacturers – one example being Taggies’ line of baby blankets and plush with satin and ribbon tags sewn on for babies to grasp.

Preschool and infant products are very strong for Kazoo right now, says Nelson, along with books and construction toys. One product that has been flying off its shelves lately is L.A.-based Overbreak’s HoverDisc, which is essentially a three-foot inflatable disc that kids can toss back and forth like a Frisbee.

For Q4, Nelson is already buying heavily in categories such as plush and books, as well as queuing up for sell-out Q4 SKUs from last year, including Educational Insights’ game Blokus. Nelson is also betting on Cranium games like Hulabaloo and Cadoo to be big sellers for specialty this year.