Colorwheel Toys

Palo Alto toy stores

Posted on: January 16, 2012

Today I visited a few toy stores in Palo Alto to get a better sense of available products, pricing, and potential customers. Each store was unique in focus:

  1. LiveGreene – A store selling home goods and eco toys, made from recycled, reclaimed and sustainable materials.
  2. Palo Alto Toy and Sport – A more classic toy store with a larger selection, mixed with sports equipment.
  3. Plan Toys – Store selling solely wooden toys from PlanToys distributor. The sales woman said it is the only fully dedicated location to the brand.

Goals:

  1. To learn about variety of toy stores in the area.
  2. Observe differences in how they market to boys and girls.
  3. Determine types of toys that are available.
  4. See what else is being sold alongside building/ educational toys.

LiveGreene
First, I visited LiveGreene. The sign outside promised eco toys. There was also giant cardboard pirate ship right outside the door that had been colored on.
Inside, there was mix of recycled material products and “eco gifts” ranging from home goods (bowls, candles, picture frames) to children’s toys and books, and kitchen utensils.

There was a a whole bookcase of solar kits, all priced at $14. The solar cooker looked cool. The more offensive bookcase next to it housed cardboard box play kits. These provided the customer with plastic snaps to hold together cardboard boxes. Children could then pretend they have just made a doll house. While promoting sustainability in this way is admirable, it seems like a waste to package these unnecessary accessories when the same job could be performed with tape and old boxes. The pirate ship out front had also required the customer to buy the cardboard box as well, with precut holes.

Key takeaways:

  1. Eco conscious consumers visit these types of stores to fill a variety of needs.
  2. A premium can be charged for products deemed sustainable. They really charged money for a cardboard box with holes cut out of it!

Palo Alto Toy and Sport

This store is a combination sports supply/ classic toy store. There are a number of science kits near the front, with smaller kits priced around $15-20. I was a little offended by the perfume and skincare science kits for girls, but at least they were on sale. Maybe that means girls are more interested in regular science kits. There was also a section of Lego sets, clearly in the boys section. In the back of the store, there were a variety of arts and crafts kits, placed behind some pink frilly stuff.

How can we combine the best out of all three of these sections?

PlanToys

PlanToys is a store for the distributor of the same name. It sells solely toys made out of wood, with food sets, doll houses, trains, and toddler toys, to name a few of their options. They also have cool wooden kitchen appliances to complete a kid’s dream play kitchen. The saleswoman told me that this store was the only one to sell only PlanToy products, the rest of its products being distributed through other stores. PlanToys key mission seems to be to provide a green, safe, and enriching play experience. Toys are simple but also very aesthetically pleasing, produced sustainably, and arguably worth the premium they are charging.

Summary of learnings from the day:

  1. If you can call your product sustainable and green, parents will pay (even if their kids couldn’t care less).
  2. Solar toys/ science kits are common
  3. You can sell prepackaged creativity (cardboard box kits)

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3 Responses to "Palo Alto toy stores"

Email exchange before the meeting at Palo Alto Cafe Monday at 6 pm:

Nick: I have already viewed your blog and canvas, nice work. Head’s up I am going to ask you to get more specific regarding customer segment ( both paying customer and user) so that you can validate / invalidate your assumptions quickly. A good way to think about it is, if your product was ready to ship today who would be the first paying customers and users.
Here are some of the questions I am going to ask you when we meet

Paying customer:
Our initial customers will be ____________
We believe that our customers have a need to ___________________
The need can be solved with _________

The number 1 value a customer wants to get out of this service is_______________
The customer will also get these additional benefits _______________and ____________

We will acquire the majority of our customers through _______________ and _______________

User:
Our initial user will be ____________
We believe that our users have a need to ___________________
The need can be solved with _________

The number 1 value a user wants to get out of this service is_______________
The user will also get these additional benefits _______________and ____________

We will acquire the majority of our users through _______________ and _______________

Colorwheels team:

Paying customer:
Our initial customers will be households earning over 60K per year in regions with heavy tech presence (SF, Boston, Seattle, NYC, etc)
– both parents
– gift givers
– 1 to 2 kids
– 7-9 years old

We believe that our customers have a need to give their daughters toys that will both engage and enrich them in science and engineering without pandering to them
The need can be solved with a gender neutral building set

The number 1 value a customer wants to get out of this service is enrichment for their kids.
The customer will also get these additional benefits engaging and encouraging self expression/ creativity
We will acquire the majority of our customers through social media and word of mouth, bloggers
(making the product itself social/viral see webkinz)

User:
Our initial user will be girls aged 7 to 9
We believe that our users have a need to have a fun/self expressive building set

The need can be solved with gender neutral building set

The number 1 value a user wants to get out of this service is fun
The user will also get these additional benefits educational enrichment and self expression, discouraged from engineering due to gender

We will acquire the majority of our users through parents and friends

Nick:
Great meeting you guys this evening.

I came across this article and thought it would be worth sharing with you.

This a great analog for you guys, the product has not been built yet. Check out their web site, facebook & twitter page. This could be the same target market e.g if they also have a daughter.

http://singularityhub.com/2011/10/12/origos-3d-printer-could-be-the-last-toy-your-ten-year-old-will-ever-need/

Hey Team,
Good chatting with you all. You probably already found the two orgs below, and Im sure there’s a few more related to the toy industry, but thought I would forward along the links just in case. They might yield some useful info along the way and don’t be afraid to call them up and mention you’re a stanford student and ask them for things.

http://www.jpma.org/

http://www.toyassociation.org/

A few other thoughts which might be worth thinking about (which you may or may not have time to wade through before class):

-The growth that the US building sets market has enjoyed since 2004 to 2010, are there any projections about what this might look like in the next 5 years to 10 years? If you can’t find projections, are there any indicators which might lead you to believe that the growth rate will continue, stagnate, decline?

-Page 72 in the business model canvas book: they analyze LEGO’s biz model. You’ve probably seen this, but wanted to point it out as well in case you haven’t yet.

Catch you soon.

Ashton

I tried to post this in the comments section of your latest post, but for some reason wordpress wouldn’t let me. I’ll email this to you as well.

Sorry I couldn’t stay until the end. Good job tonight. You got a little tough love from the teaching team about some of the slides. That’s OK. Everyone did to some degree. Remember, the point is to learn by failing, and failing is painful when it’s done in front of a class. But also, they want to see your hypotheses fail, not your methodology on how you research, analyze, and present the info. It’s a good learning experience to go forward with.

I’m sure you have a lot of thoughts on the teachers comments and questions. Below is what I took down after you guys presented.

-My guess is that the biggest issue that created some of the problems during the presentation, was execution during this last week. Somewhat understandable given you didn’t know quite yet what to expect. To be more ready for next week, I think you’ll need to accomplish more during the days in between classes. If you haven’t done so already, make a plan of who is going to research what, split up, go do it, come back and check in, repeat, and then put together your next preso. Be aggressive with the goals you set to make “action” (not motion) each week.

-I think Nick and I will be able to help you more if you’re able to get any slides with major assumptions to us earlier, so we can comment and there will still be ample time to do a little further research and make adjustments. A case in point is the Bottoms-Up market sizing slide. I’m glad you thought about it and put some ideas down. But, some of the numbers were made up and the teaching team zeroed in on them right away. The teachers will (rightfully) dig in if they see something on a slide that looks out of character. So whatever goes on an actual slide has to have a logical argument or research behind it. If I had seen the 50% conversion number on the slide when we talked, I would have pointed it out. Let’s see if we can get this to happen earlier in the week, even if by a day–preferably the first draft 2 days in advance.

-Also, when you make slides, try to shoot down/or question the validity behind each point, and see if you’re able to give a logical answer backed up by facts, data, or qualitative observations (if you’re using qualitative observations, it’s usually good to have several). I think Nick and I can do this when you show them to us. But it’s a good exercise to get in the habit of.

-Make a list of the biggest takeaways from the teacher feedback and turn them into actionable steps you can take right away.

-I think it will help a lot to rachet up how many people you talk to–users, customers, and industry experts. The more you take the approach of front-loading the course with lots of work on getting out and talking to people, I think it will save you a lot of headache. It will also make you sound more like the experts when you present.

Industry experts are going to tell you a lot about the challenges of the industry, how it works, how established business models work, etc. They will dramatically speed your learning curve. They may only give you the status-quo and not understand your innovative ideas, but they’ll give you a big heads-up on potential warning signs to explore further. It may take time to schedule appts with these people to talk with them–so make a list and reach out to people early in the week. I can see about connecting you to a few people. Try any of the teaching team’s connections. Try linkedin. Toy industry organizations. Etc. People will give you a lot of leeway because you’re Stanford students.

Customers/users will give you a lot of insight into pain points. They often can’t tell you solutions, but they are usually good at telling you what sucks about existing products and services. Let those conversations continue to guide how you frame your hypotheses and tests. This will help you dial in more on whether you test an online offering, offline, physical product, service, or some combination.

-When you listen to Nick, teaching team, and I–you may have to read between the lines sometimes. We may not outright say our objections, or ask questions that directly point to glaring issues. Sometimes, we won’t be able to articulate exactly why something troubles us. But if something does trouble us for some reason, we’ll ask a lot of questions about it. This goes for customers/users as well. People may focus on specific aspects of what you’re presenting and ask a lot of questions around a specific issue. It’s good to be able to step back and notice that while, you can’t quite put your finger on what is troubling people, you know that there IS something troubling and you need to tease it out further. Gender was something I touched on a lot when we talked. It’s something that Steve zeroed in on. Now you know to focus on it more. Keep your radar going for themes that come up across people.

-Ann mentioned looking at Babbaco and another online toy/creativity box subscription service. I may be able to introduce you to someone at Babbaco to talk to. Also, look at innovative toy businesses that seem to be a bit unique. Lego is doing some unique things (covered in the biz model canvas book). Build a bear was unique and enjoyed a lot of growth. Online kids gaming/social sites may be interesting. The link Nick sent you about 3D printing is interesting. See if you can quickly make a short summary of 10 innovative toy companies to get a feel for ideas out there (Spinmaster, Frog, BabbaCo, Lego, Build-a-Bear, etc…). It may help spur ideas about what’s possible out there.

-It seems the teaching team likes to see well-designed slides with meaningful visuals. Your slides were well designed, but continue pushing to make this better.

That’s it. Let’s sync up on another call or see if we can meet to toss things around further. Good first stab. Now, on to the next.

Ashton

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