Build-A-Bear Competition
Now Viewing Build-A-Bear's competition in: Toy and Hobby Stores (primary)
Call Preparation Questions
Customers, Marketing, Pricing, Competition
Who is the company’s typical customer? - The typical customer for toy stores is a parent or grandparent; for hobby stores, a married, relatively affluent, educated woman 35 or older.
For toy stores, how does the company market to children? - Children under 12 receive the majority of toys. Toy stores may have in-store play areas.
What marketing and promotional vehicles are the most effective for the company? - Vehicles include newspaper, television, print, and radio advertising; direct mail; and in-store programs.
What types of seasonal events are most effective for the company? - Seasonal events, especially Christmas promotions, are extremely important.
When does the company start Christmas promotions? - Toy stores may start as early as October, and increase activity around Thanksgiving. Hobby stores may begin as early as late summer due to time required for customers to complete Christmas crafts.
How effective are gift registries and wish lists? - Some stores offer registries or wish lists to aid in gift giving.
For hobby stores, what are the most popular craft seminars? - Many hobby stores offer “how-to” seminars to promote sales.
What role does the Internet play in the company’s marketing efforts? - Highly specialized retailers depend on the Internet to reach customers beyond physical locations.
What is the company’s pricing strategy? - Toy stores may price popular toys at a loss during peak selling periods to drive store traffic and compete with mass merchandisers. Hobby stores may offer to match or beat competitors' pricing.
Who are the company’s biggest competitors? - Mass merchandisers threaten both toy and hobby stores. Toy stores also compete with consumer electronics stores; hobby stores with fabric and sewing goods stores.
Competitive Landscape
Consumer spending is a key driver of demand for toy and hobby stores. In addition, population growth among young children (under 12) drives demand for toy stores, and population growth among women 35 and older drives demand for hobby stores. The profitability of individual companies depends on the ability to generate store traffic and effective merchandising. Large companies offer wide selections and deep discounts. Small companies can compete effectively by offering specialized products, providing superior customer service, or serving a local market. Average annual revenue per employee is $160,000.
Business Challenges
CRITICAL ISSUES
Dependence on Consumer Income and Expenditures - Most consumers classify toys and hobby products as leisure purchases, and sales depend on personal income, consumer confidence, and economic health. During the last recession, growth of personal consumer expenditures in toy, game, and hobby stores slowed considerably. Consumers typically cut leisure purchases and holiday spending during difficult economic times.
Competition from Alternative Retailers - Toy and hobby stores face strong competition from mass merchandisers like Wal-Mart and Target. In 2008, mass merchandisers represented more than half of all retail toy sales, according to the Toy Industry Association. In addition, toy stores must compete with consumer electronics retailers, like Best Buy and Circuit City, for sales of electronic toys and video games. By expanding craft and seasonal merchandise sections, fabric and sewing supply stores, such as Joann Stores, give hobby stores additional competition.
Industries Where Build-A-Bear Competes
- Retail
- Toys & Games Retail(primary)
