Growth challenges in a market in crisis
In March 2018, in his office, right above the scientific toy assembly line, Miguel Pina Martins opened the Financial Times. The day’s news was not exactly encouraging. Toys’R’Us, one of the giants of the toy retail market, announced it would close its stores.
Miguel, who had traded a promising career in the banking sector for the adventure of transforming his university project into a company, was not caught off guard. The CEO of Science4You, the first scientific toy brand made in Portugal and an international success story, had long been working on scenarios to maintain sales growth momentum. How would Science4You overcome the crisis of major toy retailers and especially the fall of one of its largest clients?
By creating its own physical retail spaces and diversifying its network? Or by investing in the transition to the e-commerce model? But with which partners? And on which platforms? For many companies, online is the promised future. But there is no off-the-rack strategy for the digital transition—it is more bespoke tailoring. Each case is unique and, there, other questions arise: what is the appropriate mix of online and offline positioning? How do they coexist? And how does one manage the expectations of partners, until now Science4You’s main sales force? And can a toy company just over a decade old afford not to have its boxes on the shelf, where children hold parents hostage to the purchase?
These questions had crossed Miguel Pina Martins’s mind. Beyond his own business, Miguel also reflected on the toy industry’s numbers.
Mattel, one of the world’s largest manufacturers, saw its shares plummet after presenting shareholders with a pessimistic sales scenario. Lego, one of Denmark’s flagship enterprises, only improved results with difficulty and with a licensing strategy for film industry blockbusters—Star Wars and DC Comics.
He was concerned that global toy sales growth was timid. Was the retail sales decline a symptom of a deeper disease throughout the entire toy industry? It is evident that today’s children spend increasingly more time glued to mobile phone screens, tablets, and video games. Had the consumption paradigm changed? The scientific volcano was the first toy and one of Science4You’s greatest commercial successes. Just as at that time, Miguel needed an explosive solution.
