The two key ingredients in perfecting the redemption dish will always be game play and visual pulling power, but the importance of prize cost and quality can never be under-rated.
The operator has to get the balance right. Spend too much on prizes and the bottom line is eaten into; spend too little and player interest will wane. InterGame asked some plush and prize suppliers about their strategy when it comes to achieving that balance.
“The balance is dictated by the popularity of the product,” said Mark Titterton, sales director at Whitehouse Leisure. “Customers will spend more for more products that are in higher demand, such as licensed prizes, in their machines because they know that consumers will spend more to win them.
“We offer a huge range of prizes in both our plush and redemption catalogues, and we make sure that we have an offering of low through to higher price points for customers to choose from. Depending on the type of machine the prizes are for determines how much customers will spend on our products and ultimately how much the consumer will play in order to win the prizes.”
“Sought-after prizes have a perceived value by visitors, especially if they are popular in the mainstream,” said Trevor Clarke, head of the merchandise division at Sega Amusements. “It’s easier to protect margins for items that are in high demand providing you’re buying at the right price.
“Naturally we only try to source items that are desirable; however, this can be hit or miss sometimes. Margins can be protected providing you are making allowances for this balancing act with the prizes that are popular, which gives you more room to reduce margin on the prizes that miss the mark.”
Aaron Moorjan, Ceo of Global Toys, told InterGame: “We balance the need for sought-after prizes with healthy margins through strategic sourcing, efficient supply chain management and competitive pricing negotiations with suppliers.
“We do our best to learn and understand the clients’ price points and then provide them with the best fitting toys based on our many years of experience, so it’s a win-win for all.”
“Balancing popular prizes with healthy margins is tough,” said Mike Aisenberg, marketing manager at Rhode Island Novelty. “We aim to reduce costs by ordering in larger quantities from factories whenever we can.”
Whitehouse Leisure’s Titterton added: “Our strategy is focused on developing and sourcing the right products and licences to work perfectly for the latest and different types of prize-operated machines that are in the Fecs. Having the right product for the right machine is crucial and we have built our plush and redemption catalogues around this strategy.
“We work closely with the leading coin-op manufacturers to know what new machines they are developing, so that we can produce and source prize-specific plush and redemption toys for these machines.
“As a market leader in plush toys, we are consistently securing the newest and sought-after licences, developing trending own-brand ranges and seasonal ‘must-haves,’ so that our customers can have the best choice of products on the market and they know that our products will generate the highest cashbox returns.”
“As an operator we want to give away prizes as this in turn drives repeat visitors to our locations and increases income,” said Sega’s Clarke. “Therefore, price is very important for prizes - the better the price the more prizes we can afford to give away.”
Global Toys’ Moorjan explained: “Our strategy for plush and redemption prizes focuses on thorough market research to watch out for latest trends to save our clients valuable time and to ensure we are always providing quality, variety, competitive pricing, timely delivery and customer engagement. We also specialise in customising plush for clients to promote their brand mascots.”
“Our company’s approach to procuring plush and prizes for redemption machines centres on creating appealing items with high perceived value,” said Rhode Island’s Aisenberg. “We prioritise incorporating trendy designs and popular materials, tailoring our selections to the specific redemption machine types, where size can also be a pivotal factor to take into account.”
Licensing is obviously a major issue in the sector. It can be challenging to factor in the extra costs, but at the same time the already established popularity of licensed products will feed into the bottom line.
“For over 25 years we have built up strong partnerships with licensors, supporting every film or platform release and adding new and innovative designs on evergreen properties like Disney Classics, Stitch, Winnie the Pooh, etc,” said Titterton.
“The popularity and strength of the licence or brand dictates the price that operators will pay for the products and how much their customers are willing to pay to try and win the prize. If it’s a must-have licence that everyone is talking about or wants, like our Disney ranges, then the cost of the product is justified because operators know they’ll get their ROI.”
Clarke told InterGame: “Licensed prizes are usually more popular with visitors as they are being driven by the mainstream, which does help to increase margin. However, generic prizes can outperform licensed prizes if they are on trend and driven by external factors like social media. However, generic prizes can have a narrower window of opportunity compared to licensed prizes, which tend be more evergreen.”
“Licensed products are a valuable addition,” said Moorjan. “While they come with extra licensing costs, their popularity typically boosts sales and positively impacts the bottom line. We, however, do our best to design and create cute and attractive non-licensed toys that are more value for money for operators, so they don’t have to spend most of their budget on expensive licensed products.”
“Licensed products are a mixed bag,” said Aisenberg. “They can be quite time-sensitive as their popularity tends to wane with the trend. Additionally, the inclusion of guarantees and royalties can inflate costs, often making these items two or three times more expensive than generic products.
“This, in turn, leads to players winning less frequently and necessitating a higher price per play, which can deter repeat plays. While licensed products have their appeal, opting for generic items is often the more favourable choice.”
Player retention is a huge issue. Attracting the player to the machine is one thing, ensuring repeat plays quite another. “Our buyers and product development team stay ahead of the game by monitoring current trends and what’s going to be the next big thing, so we can bring out licensed and own-brand products that will be in high demand,” said Titterton.
“Consistently bringing out new product designs for our customers, across our licensed and our own-brand ranges, so our customers’ machine prizes are regularly refreshed will get people returning more frequently and playing more.
“We have grown our own-brand plush range significantly over the past 18 months and the sales to support this, with regular new ranges such as our Bubble Tea and Energy Drinks that are perfect examples of how we develop products based on latest trends.
“Collectability plays a big part of our development strategy because we know that consumers like to build collections, especially of licensed products as we’ve seen with our Disney collections, and this is very important for us in securing player retention for the machines and returning to the Fecs to win our products.”
“We constantly review our prize offer and react quickly to market trends,” said Clarke. “Additionally, we will adjust our core offer every six months to ensure our prizes remain relevant to visitors.
“Prizes should always be displayed predominantly in either a cabinet, on a counter or, if you have the space, a wall display behind a counter that is bright and well-lit in a similar fashion to a retailer. This will ensure visitors notice the prizes and drive their desire to play for them.”
Moorjan told InterGame: “We ensure player retention through careful selection of prizes that are appealing and durable. We also regularly update our prize offerings to keep players engaged and excited. Additionally, we gather feedback from operators and players to refine our selection further.”
“We typically enhance player retention by incorporating vibrant materials and colours,” said Aisenberg. “When it comes to hard goods, we place significant emphasis on packaging, as it plays a critical role in how the products are presented on the shelf.”
InterGame asked how important it is to take into account the level of sophistication of a venue when it comes to choosing redemption prizes. “Our vastly experienced team of buyers know what works for all Fecs and what’s required for their customers,” said Titterton. “Working closely with the leading coin-operated manufacturers, we have an extensive variety of products and depth in ranges to cover every requirement.”
“Prizes should always be tailored to the demographic of the audience that are playing for them and their disposable income,” said Clarke. “We will always try and offer an alternative to sweets on the lower end of our prize offer, but sweets can be a popular option in some locations.”
Moorjan commented: “It’s crucial to consider the level of sophistication of a venue when selecting redemption prizes. Prizes should align with the venue’s target audience and atmosphere to enhance the overall player experience and drive redemption activity effectively. For example, we encourage buyers to buy more outdoor play items during the summer season.”
“Considering the sophistication of a venue is highly significant when selecting redemption prizes,” said Aisenberg. “Different locations vary in their level of experience and it falls upon our sales team to educate buyers about popular items and recommend effective merchandise presentation strategies to boost sales.”
But what of the future? Titterton told InterGame: “We will continue to work closely with our coin-operated machine manufacturers to stay ahead of the market in what they are selling into Fecs, so that we can bring out ranges that are perfect for the machines.
“Our fantastic and experienced product development team are constantly looking at the latest trends across all areas to identify the next big things so that we can develop products specific for these trends.
“Licensed products will remain the driving force in this area and as the established market leader for licensed plush, we’ll continue to bring to market the most sought-after products for 2024 with all the new brands we’re adding to our catalogue.”
In Clarke’s view it will be “more of the same.” He added: “Redemption is still growing in demand and is especially popular during the current economic climate. Visitors demand a return on their disposable income and an attractive prize offer will certainly help visitor numbers.”
“In the amusement and redemption industry, we can anticipate several key trends for the future,” commented Moorjan. “These include digital integration, AR and VR, sustainability, health and safety, data analytics, interactivity, inclusivity and global expansion. Adapting to these trends will be essential for businesses in the amusement and redemption industry to remain competitive and meet the evolving preferences of their customers.
“I want to highlight the importance of innovation and agility in responding to these trends. Embracing digital integration, sustainability and personalisation while ensuring the highest standards of health and safety will be our top priorities. We are committed to staying ahead of the curve and delivering exceptional experiences to our clients and their customers so they never need to shop elsewhere.”
“The future of this sector is marked by constant change,” said Aisenberg. “It requires us to stay vigilant and open-minded, keeping a keen eye on emerging concepts and trends.” He is also proud of Rhode Island’s commitment to sustainability. “We take measures to ensure the ethical and sustainable nature of our products. We carefully source and develop items that will align with our ethical standards, striving to choose products that have broad appeal.
“The primary challenges in accomplishing these goals often involve making the difficult decision to forgo potentially profitable items or ideas when they don’t align with our ethical values.”