Activities, characters win over segment
"Toy dollar sales are up 4% in the drug store channel," said David Luth, principal at Radian Group, a market research firm. "The chains that do the best in this category are those that make an intentional decision to be in the business. That doesn’t mean that they have to devote 80 ft. to the category, but if they devote 20 ft., they should do a great job with the space they give it. They have to have the right toys at competitive prices."
Activity toys are a key segment for the drug channel. Dollar sales of activity toys — which include action figures, vehicles, construction toys, and activity kits and crafts — increased 18% in the drug channel for the 52 weeks ended Sept. 25, 2012, according to GMDC /Nielsen Hierarchy Channel. Dollar sales of toy models were up 12% and educational toys were up 7%, according to the report.
"Construction toys are one of the biggest growth categories in the past two years," said Adrienne Appell, a spokeswoman for the Toy Industry Association. "Crafts continue to be very popular with both parents and kids." Crafts that allow kids to make their own art supplies or personalize their electronics or school supplies are a big trend. "For younger kids, anything with bling or sparkle is really popular," Appell said. "There are also a lot more crafts on the market aimed at tweens and teens. Hair and nail craft kits really appeal to this age group."
Licensing is also integral to the category, so a good toy department depends on on-trend licensed character products. Appell said that One Direction, My Little Pony and Cabbage Patch Kids products will all be popular this year. Teenage Mutant Ninja Turtles, she said, are "back with a vengeance."
Creating a destination category means generating excitement for the category year round. "Toys naturally get more space around the holidays, but the category could also get an endcap during the summer months with a ‘summer fun’ promotion that includes activity kits or a ‘family fun’ promotion around games," Luth said.
Merchandising small travel activities near trial size health and beauty aids is another way to spark incremental sales, while giving toys a higher in-store profile. "When consumers are pressed for time, one-stop shopping is a big draw," Appell said. "Shoppers want to be able to pick up their prescription, some snacks and an inexpensive birthday gift for a party that their kid is attending tomorrow in one location."
Spray away bad behavior
OMAHA, Neb. — Sergeant’s Pet Care Products has created an innovative product called Vetscription PetSTOP! behavior correction spray for dogs and cats to help modify destructive or aggressive behavior. This new spray combines noise and a specially developed pheromone mist to provide quick, effective results. The spray’s patent-pending pheromone mist is longer-lasting than noise products alone, so it helps redirect the pet’s attention and behavior, and reminds pets not to re-engage in negative behavior, such as excessive barking, chewing or pulling on a leash.
Value, premium card segments open to growth
The pervasiveness of Facebook and Twitter has not killed the greeting card and gift wrap category. "Managers are telling us that the category continues to hold its own and, in some cases, is growing nicely," said Mark Deuschle, VP business development and chief marketing officer at the Global Marketing Development Center. "Greeting cards remain not only a top trip driver, but also one of the most profitable categories in the drug store environment," said Sabrina Wiewel, VP of Hallmark’s chain drug team. "Once a shopper is in our department, she leaves with a card 8-out-of-10 times."
A tight economy has shifted some market share in the category to the dollar channel, but more consumer interest in the value segment isn’t necessarily bad news for drug retailers. "Our data suggests that card sending seems to be a healthy trend with unit sales trending up, but there has been a shift to less expensive cards," Deuschle said. "At the same time, we’re also seeing growth in the premium segment."
Steven Gimbelman, president of Designer Greeting said that greeting cards are one of the most profitable categories in drug stores — third only after candy and gum, and prescriptions. In a tight economy, more focus on value greeting card programs can benefit the channel, according to Gimbelman. "These programs have resuscitated many drug stores that had been losing greeting card sales due to full price programs and limited title selection," he said. "We create high-turning planograms based on a retailer’s market demographics. We expertly tailor our controls to succeed for our accounts."
In the premium segment, innovation continues to drive category sales. Cards with sound, motion and even LCD screens give consumers a reason to shop the category. "Special treatments, such as foil stamping, faux gems, die-cutting, glitter and attachments, are more popular than ever," said Kathy Krassner, a spokeswoman for the Greeting Card Association.
Krassner said she sees a trend toward cards with a handcrafted feel, many of which use premium papers and rich textures. Cards with embellishments and attachments that can be removed and reused have done well for Hallmark. Designer Greetings is bringing embellishment to the value tier with the Designer Boutique upscale, handmade line that includes ribbon, gems and tip-ons, but it is still offered at value pricing.
The gift bag segment also has continued to grow at the expense of traditional wrap. "The real growth in wrap is in bags in new designs and materials," Deuschle said. "Consumers love the convenience of bags." Hallmark’s top-selling format in drug stores is a gift-bag-to-go concept, a gift bag that is already prefilled with tissue and has a gift tag attached. Solid-colored gift bags that are easy to coordinate with any gift and for any occasion also are seeing strong sales.
Retailers who adjust their mix to reflect the changes in the market have shown the best performance overall. Manufacturers are offering retailers more flexible fixtures to display the best mix of cards in departments that are easy to navigate and can integrate cards with other products.