Watching the collectives

Ah, the good old days. Running down neighbourhood streets, scoring tin-canned goals through jumpers-for-goalposts, Top Trumps and Rubik’s Cubes. Ask anyone over 40 about their childhood and they’ll picture something bordering on the sepia-tinted Hovis bike ad, while lamenting the current generation of obese, freak-thumbed, pasty children whose only interaction with each other is smart-mouthed insults through the Xbox. If it isn’t in digital format, they’re not interested, right?

Try telling that to Panini head of circulation Rebecca Smith, who is predicting £40m-worth of sales from its official FIFA World Cup stickers alone, boosting the total collectibles category to £80m this year - up from an average of £60m per year. “It’s a massive market; I think people underestimate just how big the market is, and especially this being a World Cup year.”

When you look at the mechanics of the market, it’s not difficult to see why it generates such sales. Take Topps’ brand Match Attax, a trading card game whereby cards can be used on their own to select a best team, or played in a card game using defence and attack statistics on the cards. Packs are sold in 10s for £1, but there are 420 different players to collect. It doesn’t take a maths genius to tot up the potential.

“These cards offer good margins of 20-25% and there is no effort needed and no risk because it’s sale or return”

 Anjali Karpal, Essential Convenience Store, 
Horsham, West Sussex

It was declining magazine sales which first brought News of the Wharf stores owner Peter Wagg and his operations manager Paul Donegan to the category. Peter owns six CTNs on the Canary Wharf estate in London and one convenience store on East India Dock. According to Paul, this time two years ago they wouldn’t have given the category the time of day: “We used to return any to the magazine wholesalers when they sent them through.” However, when looking at ways to attract customers back to magazines they decided to give the collectibles market a try.

Paul says customers often asked for football cards so they began to stock Match Attax, then widened it to collections such as Peppa Pig and other football cards.

“The sales were good,” says Paul, who points out that with space at a premium they wouldn’t waste their time stocking something that wasn’t doing well.

The stores now have an agreement with Panini for preferential placement, but continue to stock Match Attax. As Canary Wharf doesn’t allow retailers to have posters in the windows without prior agreement, advertising is done on digital media screens and a freestanding display unit.

He says that he listens to customers about which collections they should stock. “We have a lot of interaction with our customers, and use social media a lot. They tell us what they want to see and if we can get it, we do.”

According to Smith, while the supermarkets have suddenly woken up to the profit potential of collectibles, it is c-stores which remain the heartland for these type of products. Topps marketing director Rod Pearson agrees, saying that convenience stores and smaller groups account for about 64% of Topps’ sales.

Even in years where there isn’t a big football tournament, the collectibles market can be hugely profitable for retailers, particularly those who sell magazines. Smith says that children’s magazines and the collectibles market are now so intertwined that half the work is done for the retailer. “A lot of the properties are already established with magazines. As soon as you get the magazine with a covermount into children’s hands, the job is done for you.”

Pearson agrees: “If you present the products clearly and put other children’s products with it you’ll get good sales,” he says. He claims that the target market for the company’s Match Attax products are boys aged 6-12, and that one in 2.6 kids collects Match Attax products.

Paul’s weekday customers tend to be high-earning city workers who often buy for their kids, and sometimes for themselves. “I think sticker collections have quite a retro feel. I can still recall my 1986 collection.”

“There are a huge amount of second generations who collect,” agrees Panini’s Smith. She says that as well as sport, these collectors are often into collections such as Star Wars and Dr Who. Pearson says that 64% of Topps’ purchasers are adults - either buying for children or themselves.

Horsham retailer Anjali Karpal, who stocks Match Attax in her West Sussex Essential Convenience Store, says the category sells itself. “Even though we’ve got a WH Smith in competition up the road and the packs of cards are £1, we still see children come in with a tenner and get 10-packs. They’re swapping them in the playground and playing the games.” She says that she finds the football market the most popular with occasional girl-focused collections doing well. “These cards offer really good margins of 20-25% and there is no effort needed and no risk because it’s sale or return.”

One of the best things about the category is the massive amount of marketing that is often put behind the collections. For instance, for the World Cup, Panini is giving away free albums in newspapers; one for every child who wants to collect, says Smith. A major TV campaign to highlight the collection is already running. But don’t leave it too late. According to Smith, 70-80% of sales of World Cup collectibles are predicted to take place in the 12-week run-up to the tournament, so retailers need to be stocking up now.

With high margins and sale or return on goods, why isn’t every retailer getting behind the category? According to National Federation of Retail Newsagents news controller Brian Murphy, fear of theft and a lack of space could be putting some store owners off. He says retailers may also have had bad experiences in the past. “Retailers have previously lost credit through not returning them on time so have had their fingers burned.” Confusion is also responsible for some retailers’ reticence: “They wrongly believe they have to keep them and cannot early return, and that they have to stock every collectible - but you can pick and choose!”

Managing director at product distributor Innzone, Philip Glynn, says that retailers can’t afford to pass up the opportunity: “If it’s risk free what’s the problem? You should always accept a product because you can always be surprised.”

Anjali agrees that stocking collectables is a no-brainer, claiming that once kids know that you stock a particular collectible they fly out the door. “You have to let customers know what you’ve got - put the posters up that come with the collections,” she says. “I think every shop should do it.”