Preschool toys make the grade; retailers emphasize educational aspects of their preschool assortment

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In a toy market bereft of superstars, preschool stands out like a franchise player.

Retail sales of preschool toys increased from 1988 to 1989, according to figures furnished by NPD Research in Port Washington, N.Y. Unit sales grew from 98,207,000 in 1988 to 103,972,000 in 1989. Dollar sales also rose, from $790,521,000 in 1988 to 1989's $916,037,000.

The evolution in the preschool market continues. Once upon a time, to compete in the preschool market-place, a manufacturer had to make a cute toy. Today, that's not enough. Nowadays, toys that combine fun with an educational or developmental purpose are most in demand.

Retailers are keeping up with the times by featuring their toys with an educational bent, promoting these items, and displaying them out of their package. Knowledgeable sales personnel conversant with the wide array of preschool toys is a must.

In the first part of PLAYTHINGS coverage of the preschool market, retailers discuss how they're coping with the rapidly changing preschool market.

New firms bring competition

The influx of new companies into the preschool fray has led to a more competitive category. Many manufacturers have increased their preschool advertising budgets in order not to be lost in the shuffle.

One retailer sees this as a mixed blessing.

"The manufacturers must realize that preschool is very profitable for the retailer," said Joe Mullen, vice-president of hardlines for Hills, a 217-store chain based in Canton, Mass. "There is a price value relationship. It shouldn't be made into a TV or a licensing monster."

Hills conducts a Baby Fair twice every year, to promote its extensive array of infant toys and clothes. This merchandise is moved to the front of the store during the Fair, with special signage and footprints on the store floor pointing the way to the section.

"We like to have a mix of identifiable products, and marry that with impact items," said Mullen.

Education takes center stage at the 91-store Early Learning Centre stores, headquartered in Milford, Conn.

"At the moment, it's our top selling category," said Derek Dubin, merchandise manager, of preschool. "Year in and year out, it sells very well."

Dubin explains that pleasing a preschooler is important, because that preschooler and parents have a number of toy shopping years ahead of them.

Early Learning Centre hopes to make a favorable first impression by manufacturing its own line of preschool products, which is featured prominently in the stores, and also stocks a line of Fisher-Price and Little Tikes items. Products are grouped by use rather than brand.

"We encourage play in our stores," says Dubin. A unique system of shelf tickets under each toy states appropriate age range, the function, and the developmental aspects of each item.

Dubin says Early Learning Centre carries "edited product," that is, the chain has several criteria that determine whether or not it will stock a toy: it must be fun, educational, have passed independent laboratory testing, have no license except for Sesame Street, and not be advertised on TV.

"We want to stock different toys, something the mass guys don't pay attention to," says Dubin. "And you must have articulate salespeople who are knowledgeable about the category."

Early Learning Centre conducted a "Shape Their Futures" promotion last May, which prominently featured preschool toys. In-store and window displays highlighted the store's preschool selection.

Early Learning Centre plans to increase its commitment to preschool by 15 to 20 percent this Fall.

At Tiny Tots in Greenbrook, N.J., Little Tikes is the password to success. "Little Tikes is number one in our store," said store president Irwin Abramson. "Their volume has surpassed everyone."

Preschool sales have increased in the past year, and Abramson attributes that to the influx of new manufacturers into the category.

"There are newer companies and more creativity in the category," he says. "Packaging has improved, and the variety is extremely good."

Labeling gets praise 

Abramson credits the manufacturers with their explicit package labeling, which eliminates confusion as to which age the toy is for.

Little Tikes items are kept out of the package for easy viewing and handling, and preschool items are grouped together by category.

Preschool sales have increased marginally in the past year for Heights Toy Center of Little Rock, Ark.

"Parents are now more educated as to what to buy," says store manager Greg Bonner. "Now, every toy has to have a purpose. Toys now have to emphasize motor skills. Safety and purpose are important considerations."

Playskool items are very strong at Heights, while the Anatex Rollercoaster is a very big seller. Items are kept out of the box, so both parent and child can try them before purchasing.

The rising number of day care and child care centers in the Ocala, Fla., area has been good news for The Learning Wheel of Ocala.

Owner Karen Slack said that this industry is constantly looking for new, quality items to stock their centers.

Ambi and Battat preschool items sell well at The Learning Wheel. Slack commends preschool manufacturers for their bright and innovative packaging, singling out Battat for special praise.

The Learning Wheel displays some of its Concord MA Preschool items on shelving along the side window of the store, so the items can be seen from both inside and outside the store.

Better margins sought

Preschool toys have stayed on an even keel in the past year at Kiddie Land, a four-store chain headquartered in Detroit.

Preschool toys are grouped by manufacturer, with 48-foot sections of Playskool, Fisher-Price, and Little Tikes. The section is filled out with assorted items from smaller manufacturers. Preschool items are heavily promoted in Kiddie Land's newspaper ads.

"We're looking for items with better margins," said David Shapiro, vice-president of Kiddie Land. "We're trying to go upscale, so we're not competing head-to-head with discounters."

Kiddie Land has added imported preschool items to its merchandise mix in order to improve margins.

"Preschool is the best category in our store," said Cheryl Giefer, owner of Joys and Toys in Los Angeles.

Toys available for inspection

Preschool is kept in three separate areas in Joys and Toys, and a fourth area is devoted to wooden toys, with a good representation of preschool.

"We keep things out in display, and don't have much in boxes," says Giefer. "We like a clean-looking store."

Lego and Playmobil are two strong movers at the Learning Faire of Napa, Calif., with Little Tikes items also selling well. Learning Faire devotes about one-sixth of its store space to preschool.

"It's very helpful to have an item out," said Lana Stanley, co-owner of Learning Faire. "We try to have an item out of everything we carry. We keep our larger items out."

Learning Faire gives 10 percent off to purchasers from day care centers, and will institute a loaner program to preschools starting this Fall.

"Preschool manufacturers should do a lot better with durability," said Stanley. "There's no place for junk."

Stanley said that she would like preschool toys to have more than one use, and manufacturers should be focusing on creating more multi-faceted toys.

Other retailers would like to see other improvements made in preschool. Early Learning Centre's Dubin would like to see manufacturers concentrate more on research and development, and less on supporting discounter promotions.

"Manufacturers should focus more on innovation, and look for a new handle on things," said Dubin.

The Learning Wheel's Slack thinks manufacturers have left one age neglected. "There are lots of baby toys, and toys for the older ranges," says Slack. "There doesn't seem to be enough toys for two year olds."

"I would like to see more creativity," said Bonner of preschool manufacturers. "We don't need all this TV advertising."

Despite the occasional complaint, preschool continues to be a profitable category for retailer and manufacturer. With more and more manufacturers entering the category, the accent on preschool at many toy stores should become more pronounced.