As Hamleys steps beyond the metros and big cities, the plan is to set up smaller stores, says Mehta. For instance, in Guwahati in Assam, the size of a store is 2,500 square feet and it will stock 2,500 SKUs. This is half the size of its flagship stores in Mumbai and Delhi. The rent in the new cities is also significantly lower. According to sources, Hamleys pays an estimated minimum guarantee of Rs 150 per square foot per month in upscale Lower Parel, Mumbai and might pay a rent of Rs 50 in Guwahati.
The challenge however will lie in building its brand away from the urban centres. In the cities, many families know the brand because they have visited the store in other countries or have heard about it from those who have. In the smaller towns, Hamleys may attract many first time visitors but converting them into buyers will be difficult, say experts. Mehta does not see a problem, however. He says, “The tastes and preference of the affluent do not change much whether it’s a metro or a tier II city.”
The store’s advertising strategy so far has been unconventional. It has not splashed on hoardings or TV commercials like other global retail brands. However in recent years, it has teamed up with other brands to co-brand children’s events.
Mehta says the toy market is virtually untapped territory in India. The Hamleys store experience is unrivalled and keeps kids coming back for more. According to Devangshu Dutta, chief executive of consultancy Third Eyesight, the Indian toys and games market is estimated at Rs 8,000-10,000 crore and is primarily addressed by independent retailers.” Hamleys stepped into this with its international image of being an authoritative toy destination, head and shoulders above existing competition,” Dutta said. “The store has also been careful to cater to every category of shoppers, from the middle class to the affluent buyers,” Mehta says. Hamleys has a toy for Rs 50 and one for Rs 50,000. “It is positioned more as a destination experiential store,” Mehta says, adding that they have created a theatre out of the entire toy buying ritual. While many of the Hamleys store toys may also be found in book-cum-toy stores, the experience is unique.
The stores are doubling up as go-to destinations in space starved cities in the country. Dutta says that due to the changes in the structure of neighbourhoods, outdoor playtime for children is significantly curtailed. “Toys have become a filler and substitute for engagement with both family members at home and friends in outdoor play,” he adds.
About 85 per cent of toys in the Hamleys store are imported. About 30 per cent of toys in the store are its own brands and another 20 per cent are exclusively available in Hamleys stores. In India, says Mehta, the ratio of exclusive toys is highest among all the countries.
The store has been alert to changing customer preferences. “Now the trend is shifting from pester power to learning toys. We have a lot of educative and interactive toys,” he says. Dutta of Third Eyesight says that it is inevitable that other international and domestic toy retail chains will come up. “However, to my mind, the larger challenges come from the increasing amount of time being spent by kids with digital devices and parents' perception that unstructured play, with toys or without, lacks any value in the child’s development,” he says.