Toy Story

The Small Dreams Story

Shona Brethouwer searched Melbourne in 2005 for a hand-made wooden doll's house for her daughters. But all she could find were the sort of banal plastic models stamped out by factories in China and sold at impersonal toy mega-marts. It was a depressing shopping experience.

The following year, Shona, her husband (Kai) and their two young girls went on a family trip to visit Kai's family in Holland. Shona was stunned by the range of beautiful hand-crafted toys that were available in Europe. She saw an opportunity.

She says, "We were sitting outside a toy and bookshop in rural Holland and on the spot we decided to open a toyshop when we got back to Melbourne. We spent the next four weeks researching brands and prices in Holland and realised that we could probably make the business work."

With a small inheritance of $26,000, no business plan and no retail experience, they ordered $6,000 of wooden toys from a wholesaler in Holland. Within a week of returning to Melbourne, they rented a shop in the café and arts strip of High Street Northcote; six weeks later they opened Small Dreams. Most business advisers would have told them they were crazy.

However, business boomed as inner-city parents discovered a friendly, local alternative to the ubiquitous toy-retailing warehouses. Shona and Kai (a graphic designer) created an intimate, welcoming space where toddlers have their own play area; parents can peacefully enjoy browsing the toys or ask for considered advice. In April 2008, Shona opened a second shop a few doors away called Big Dreams, which sells hand-made baby clothes, nursery furniture and accessories.        

The Challenge

To maintain personalised service in a rapidly growing business and constantly improve on the points of difference that separate Small Dreams and Big Dreams from other toy and baby shops.

The Solution

Shona's shops are beacons for customers searching for quality toys, good advice and a relaxed community atmosphere. They are utterly different from the toy supermarkets staffed by barely trained checkout workers. On a typical Tuesday morning the Small Dreams shop is filled with mothers; a father and some small children are in the play space.

Shona chats with people as friends rather than customers while she processes sales and wraps presents. She says: "I build relationships and trust with customers. I like being part of the community and looking after the people who look after me."

Honesty is the foundation of trust. Shona says: "Children don't need a lot of toys. I tell people if I don't think something they have chosen is right or if something cheaper would be better." Now some busy customers just drop off a list with the sex and age of children that they want presents for and ask Shona to make the selections. She will also hold goods for up to a year for people who can't afford to pay up-front.

The first shipment of toys that Shona bought on the family trip to Holland was an expensive mistake. Many of the toys were poor quality and about a third had to be written off. She learned the hard way to research products more thoroughly and to make more careful decisions about where to spend money. She now only stocks products of mid to high quality.

As the businesses have grown, Shona has employed staff with specialist skills so that she can focus on sourcing stock, keeping up with bookwork and, most importantly, being visible in the shops and having time to talk with customers. Pennie Jagiello has a background in retail and visual merchandising; she now manages Small Dreams four days a week. Catherine Street works in the shops 2-3 days a week and has just set up an electronic stock system for Big Dreams. Shona describes her as a computer whizz, organisational freak and craftswoman. She will take over the management of Big Dreams four days a week later this year.

Now that the businesses are running well, Shona says she is very aware of the need to avoid complacency. "If I get too comfortable, the business will suffer. I am always thinking about ways to improve and hold onto our points of difference."

Regular customers are curious about what the Dreams will have next. Shona satisfies that curiosity and keeps the business buzzing by travelling to trade shows in Germany, Holland, the Czech Republic and New Zealand (her birthplace) in search of products that are different to what is available in Australia. High-quality products and personalised service give her an edge that she works hard to maintain. 

The Result

Revenue grew by 40% on 2006­-07, enabling Shona to move up a level and employ staff.

Shona no longer spends her nights arranging shelves; now Pennie takes care of presentation. The new electronic stock system at Big Dreams has been a great investment of time and money, enabling them to track stock levels, retail trends and stock costs.

By close attention to costs, Shona has been able to make her inheritance go a long way. The business has grown without taking out a loan or an overdraft - a powerful cost advantage at a time of rising interest rates.

In the next 12 months, Shona plans to begin an online retail operation and employ a public relations consultant to do advertising and editorials in parenting magazines. The electronic stock system will be implemented at Small Dreams.

Author Credits