Toyland 2.0

Hans and Tricia Masing were well established in their respective careers when in 2002 they decided to embark on their "crazy idea."

"Our son was a huge fan of Thomas the Tank Engine," says Hans Masing. "At the time, there were not a lot of choices for specialty toys on the Internet. We contacted the company that made the wooden Thomas, found requirements to be a reseller…and set up a basic website with open-source software."

The Masings' combined technical experience allowed them to pursue a side project that would have those less tech savvy scratching their heads. For 10 years, Tricia worked as an engineer at Ford. Hans had worked in information technology for nearly 20. Neither expected that little wooden trains would put them on the entrepreneurial track to a new life.

Brain Station was an immediate hit. When the orders kept coming, Tricia researched and found other "outstanding" specialty brand toys to add to the mix.  And still the customers came.

"Before we knew it," says Hans Masing, "we lost our basement to this business. We were carrying 80- to 100-pound boxes through the front door every morning for delivery around the country."

Flash forward four years, and the Masings expanded to a storefront, giving birth to a new online and local merchant—Tree Town Toys. Hans Masing says they opened Tree Town in a regular "brick and mortar" setting mostly out of respect for the specialty toy industry where traditional mom and pop stores are the norm. Soon after the couple added a third enterprise,  Dragonfly Depot, a company that creates websites and fulfills online orders.

And the Masing's online savvy has made their business grow in leaps in bonds. Han's IT experience saves them from hiring a computer support staff and all their websites are written on open-source software, which not only keeps operating and maintenance costs down, but allows them to easily integrate free Google applications such as calendars and blogs. Events publicly posted on these applications are more likely to come up on Google searches. In addition, inserting these applications saves time and money better spent on creating custom software and design.

While Tree Town Toys supplied a concrete presence in the local community, the Masing's online sales continued to soar. Approached by Amazon to sell specialty toys through their systems, the Masings were increasingly selling more products both locally and nationally. That's when they learned an organizational lesson the hard way.

"It quickly became clear that we had to keep our inventory synchronized," says Hans Masing. "We would sell something online and go to the sales floor to retrieve and find that it was being gift-wrapped for a local customer. It was a bad situation, since we ended up with unhappy customers."

To solve this problem, the Masings launched Dragonfly Depot  in July 2007. This keeps online orders through Tree Town Toys and Brain Station in sync with local purchases made through Tree Town Toys stores. Their order cancellations dropped substantially, and their customer base grew with this increased reliability. 

"Our overall cancellation rate in 2008 was about 2 percent," says Hans Masing. "It was probably 15 to 18 percent before the Dragonfly Depot system was put into place."

With a warehouse and Dragonfly Depot's synchronized system in place, the Masings saw the opportunity to make their inventory available so other stores could profit, too. Through Dragonfly Depot, the Masings work as an online ambassador to a dozen specialty toy stores across the country. The couple helps these clients by developing a website with an online store. Once that is up and running, Dragonfly Depot works with the store through managing and shipping online orders out from their fulfillment center in Ann Arbor.

Classic toys. New media.

"The first thing a customer sees when they visit a website is design," says Hans Masing. Even before reading any content, colors, fonts and pictures shape a customer's first impression.

Hans Masing and Dragonfly Depot's designer, Chris Drummonds, both agreed that the websites should feel "luxurious and rich," including only the most pertinent information to reflect the toy stores.

When Dragonfly Depot begins designing a new client's website, they ask clients to focus on the emotional response rather than the technical details such as a blog, calendar or photo album, which are addressed later.

"It's more in terms of feeling – warmth, playfulness, old world charm," says Hans Masing. He emphasizes that toys are an emotionally driven industry. Like describing a delicious meal, it's more about the overall effect than the specific ingredients.

"It helps the designer identify what flavor they want in the meal. It melted in my mouth, the taste was overwhelming," he said. "We stay away from technical detail and focus on emotional impact."

If clients have a logo or design in mind, they incorporate that as much as possible, and the designer helps fill in the gaps. Toys that Teach has been in business for 25 years, but they never had a logo. Drummonds came up with a frog character that pops up all over the Web site, acting as friendly guide. "Turns out, that was exactly what the owner had in mind but couldn't describe it," says Hans Masing.

A virtual play date

Tree Town Toys' Facebook page represents another marketing possibility for specialty toy stores. The Masings use the Facebook page to connect to the community online, not to sell Tree Town Toys.

"The Facebook page helps reinforce a feeling with the community; the feeling that we have with local customers," says Hans Masing. "It's another place to post announcements, game nights and things like that."

Ann Arbor's diverse cultural landscape also connects with the Masings' family values and possibilities as a merchant. They see the community as rich with socio-economic and religious diversity, exposing their children to a broad spectrum of experiences. As local  merchants, the Masings view their "brick and mortar" stores as an opportunity to plug into the community.

"Ann Arbor is a very ethnically diverse community, and we try to find products that reflect this," says Hans Masing. "We are thrilled, for example, to be able to offer baby dolls in a number of different skin tones so that parents can find dolls for their children that are representative of their cultural identity and race."

In these economically stringent times, many families are looking for ways to stretch a buck. That's good news for specialty toys, says Hans Masing, since the play value (how often a child or family picks up a toy or game) of specialty toys is higher than many mass market toys or entertainment options.

"Wal-Mart is the largest seller of toys, [but] I don't think we have to compete against Wal-Mart," explains Hans Masing. "I think we have to compete against television and video games. We compete by giving families face time with each other through really unique games and product line that you won't find in Wal-Mart or Target.

"With money being tight as it is, we see our sales are increasing. That makes us happy, that families are playing together and spending time together. All technology aside, that's our ultimate goal to get families playing together."