Leading industry journal covering the global toy industry including practical 'how to' articles, research, industry reports and insights.

04 February 2019 ~ 0 Comments

2019 Spielwarenmesse-Nuremberg Toyfair Review – Llama’s, Lizards and Electronics!

2019 SPIELWARENMESSE-NUREMBERG TOYFAIR REVIEW – LLAMA’S, LIZARDS AND ELECTRONICS!

The 70th Spielwarenmesse-Nuremberg International Toy Fair has drawn to a close. As ever, this show offers the biggest and best opportunity to connect with toy people from all around the world. Just like usual, this equates to a massively stimulating and somewhat exhausting experience!

Whatever your business, if it is toy business this is the most amazing show to visit in terms of scale, breadth and array of international visitors.

There were some changes this time, some halls and some companies had changed or shuffled round – most people I spoke to found the new arrangements to be better, or at least no worse.

In terms of the mood, as I’ve written elsewhere, heading into 2019 there is a definite feeling of uncertainty, and of changing times. There are 3 major areas concerning the toy business which appear to be in flux:


1. The consumer – kids still love toys, but are playing with them less as they are ever more addicted to screen time. Parents are using toys to leverage kids off screens and kids are increasingly ‘collecting’ vs ‘playing’.


2. Kids are therefore watching more user generated/informal content and less formally produced programming/movies – this affects both our licensing path and our marketing approach (more on this in my next article, and yes, I will take the liberty of mentioning in the meantime our venture which creates compelling YouTube content for toy companies!).


3. Retail – retail has never been easy, but now things seem so uncertain. Where are our ‘anchor’ listings coming from, which retailers will commit to sufficient stock early enough to allow us to push the button on inventory production and marketing execution? More companies are working on direct to consumer initiatives in the face of increasing uncertainty post Toys R Us and forecasting/inventory management is ever more tricky.

Back to the show, on a personal note this was my 20th Spielwarenmesse and every year I have a few more friends to catch up with, and find myself giving out less and less business cards as I meet established contacts. The show itself has changed quite a lot in my 20 years of attending, for instance, 15 years ago we British toy people refered to ‘the smoky halls of  Nuremberg’ as smoking was still allowed inside in those days. Today that seems like a distant world away. The size of the show has grown significantly in this time, as has the international audience. So many things changed, but some things remain – thousands of companies featuring great products for instance! Also, the old adage that many of the best meetings are in passing definitely rings true. One year I really want to arrange no meetings and just stand in the aisle and compare productivity between the usual approach of shoehorning in as many meetings as possible and meeting people more casually in passing!

In terms of trends, I always find it hard to take a top level view among so much detail while rushing around to meet people. But there were some common themes:

Plant based plastic style materials

Many in the toy industry seem to be utilising the ‘ostrich head in the sand’ approach to the threat of plastic backlash to the toy industry. Thankfully some are working hard to use plant based ‘plastics’ and other materials. It is possible that we could see a plastic backlash against toys, and as the saying goes: ‘failing to prepare is preparing to fail’. I would like to see more companies tacking action on this.

Robotics

I saw numerous iterations of STEM & pure fun Robots, seems like this is a growing category.

Non-tech STEM

Non-tech stem continues to be prominent & growing.

Llama’s & Lizards

I saw numerous Llama games & toys walking the halls. Also, I spoke to one leading industry sales guy who was adamant that Lizards are ‘the new unicorns’ for 2019. In fairness, the toy industry does tend to cycle through the animal kingdom looking for the next year’s trend, so between Llama’s & Lizards we may have the next big thing.

The B Word
Surprisingly for me as a British guy hardly anyone mentioned the looming doom of Brexit – looks like overall the toy world outside of the UK are not indulging in non-stop Brexit backstop navel gazing to the degree Britain is (thankfully). Speaking as a proud remainer, thinking about the days before the €uro when we had to calculate pricing in multiple currencies as one gives me a sharp pain akin to toothache! I have been fortunate enough to work across Europe since the beginnings of my toy career, and have many friends and much respect for the peoples of all nations in Europe. While the UK walks towards the edge of the unknown like an early explorer trying to see if the world was flat or round, I remain a proud European and look forward to a lifelong association with people across Europe & beyond.

Overall

The 70th Anniversary Spielwarenmessee did not disappoint. As ever the show was extremely well organised. Obviously there are some issues to address in setting up & running such a huge gathering of people, companies and product – but yet again the organisers delivered to the global toy industry a highly effective opportunity to do toy business…I’m already looking forward to the 71st Spielwarenmesse!

#2019trends #llamas #lizards #electronics
#spielwarenmesse70notout

25 January 2019 ~ 0 Comments

2019 UK Toy Fair Review – The Times They Are A Changing

2019 UK TOY FAIR REVIEW – THE TIMES THEY ARE A CHANGING

As the sun finally set (at last!) on a tough 2018, the UK toy trade gathered at Olympia Exhibition Centre in London this week for the BTHA UK toy fair. In my opinion, this is one of the best organised trade shows of all the 12-15 I visit each year, and hats off to the BTHA & the industry as a whole for putting on such a great show year after year.

As we entered the show the BTHA & NPD announced a 7% decline in the toy market year on year, which is obviously bad news. Although to put that in context they did highlight an overall market size of a still fairly hefty £3.3 billion, or $4.3billion USD at the time of writing. Online share of market grew (again), to represent 34% of all sales, which is both a stunning statistic and a major ongoing challenge to bricks and mortar retail.

Understandably then, the overall mood was one of ‘battening down the hatches’ against a number of major headwinds: an even tougher and less predictable usual retail environment than usual; an ever imminent and still hard to predict ‘Brexit’; and a fast accelerating transition in marketing models from the traditional reliance on TV advertising to more digital and content based marketing.

The feeling I got from across the UK toy trade was one of uncertain times and of an industry coming to terms with significant challenges to the long established traditional ways of doing things. For some companies these circumstances seemed like a threat, but to some changing times are clearly offering lots of opportunities.

On the product side, I would say that there was no shortage of new product or innovation. Uncertainty does not seem to have lead to slashing of new product development overall. There was a point in summer 2018 when we wondered if 2019 would be a year of austerity for the UK toy business…but that was not reflected in the product on offer. From that perspective as someone who did laps of the hall (upstairs and downstairs) most of the day, I saw so many new items that I was left feeling like 2019 has all the new product needed to return the market to growth.

I have heard much talk about traditonal licensed toys being less of a surefire bet than in the past, and there is no doubt that kids are viewing media very differently versus previous generations and that seems to suggest a move away from the traditional blockbuster movie model for toys, but nevertheless with a strong 2019 toyetic movie slate – Toy Story, Lion King etc., it’s hard to see how movie related toys won’t be up year on year come the end of 2019.

These are interesting and challenging times for sure, but there will be plenty of winners in 2019, and come December 25th, children across this ancient and venerable island won’t be disappointed by what the UK trade is delivering this year.

On we roll to Nuremberg, see you there next week – safe travels!

We recently launched a new brand and product management service. This service has been very popular and our capcity is now full at the time of writing. Some of our brand and product management clients asked us to help them create YouTube content, so we recently launched a new strategic partnership creating content for toy companies. To find out more, click here or drop us a line: http://www.kidsbrandinsight.com/toy-industry-veterans-launch-new-marketing-content-production-service-for-toy-companies/

18 January 2019 ~ 0 Comments

Toy Industry 2019 – Reasons To Be Cheerful

Having arrived back this week from Hong Kong toy fair, it is clear that the global toy business is still managing the aftermath of the failure of Toys R Us in the USA & some other markets. While many of us are natural optimists, the mood in general was one of digging in and riding out uncertain times.

There is no reason for doom and gloom though. Uncertainty and consolididation often lead to bigger and better things. So by way of presenting an optimistic view of the toy business, here’s some reasons to be cheerful about the global toy industry as we head into 2019:

  1. Parents recognise the value of playing with toys more than ever – as the human race tries to come to terms with devices and screens that are more addictive than the strongest narcotic, toys are offering a genuine alternative to excessive screen time. When I first conducted consumer research interviews with parents about toys and what they thought of toys (going back 20 years or so), mums/moms often labelled toys as ‘plastic crap’. They generally just saw toys as something the kids wanted and which could keep them quiet for a bit! Fast forward to today, and parents will seize on anything which can leverage their offspring away from screens. This is a fundamental demand driver for toys that is not going away.
  2. Kids still want to purchase/play with toys – overall, kids play far less with the toys they own vs 30 years ago. I identified a trend towards ‘toy stockpiling’ 5 or 10 years back, whereby kids would end up with so many toys they were literally falling out of their bedrooms, and they were effectively collecting versus playing. Despite the low usage per toy, kids still want toys. They demand and get hundreds of toys throughout their childhood. They play with them to varying extents, dependent on product category/play pattern etc., but they still want and demand toys.
  3. Product development in toys has never been more vibrant – there will be those cynical old souls out there who think back to olden golden days with the rose tinted haze of nostalgia. But in terms of product output, we have never had more platforms for product launch before. We may have a less simple model than in the past, but for creators and originators, the ways to market are so much easier and more accessible. There are still some formulaic old style products out there, and kids often still love them, but niche and far out products are much more common in the market, which is healthy for our business.
  4. 2019 is a strong toyetic movie year – we have new instalments of several proven toy selling movie franchises in 2019 including Toy Story, Frozen, The Lion King, Avengers, Star Wars etc. Historically, whether the toy industry was up or down 3-7% would depend on the strength of the movie slate. By this old school measure, 2019 should be good. OK, the impact of movies is somewhat diluted by YouTube & other content distribution fragmentation, informal content etc., but movies at this point still remain a major driver of the toy business, and 2019 looks good from this perspective.
  5. Marketing no longer needs to cost $millions – once upon a time, the way to drive high sales volumes was to tell retail you were TV advertising the product. Nowadays, as we leave 2018 where the Number 1 product was not TV advertised things have changed. Going back a couple of years, Hasbro’s huge success with Pie Face came from social media trends (along with great distribution and marketing). While the change in marketing model makes things far less certain than when we could just TV advertise everything, the good news is that there is another, cheaper way which should further broaden the range of toys on offer and drive more vibrancy in the toy business.
  6. Retail diversification/consolidation can offer opportunity – the loss of Toys R Us (in some key markets) shoudln’t be under estimated in terms of impact on the toy business. But, change can also lead to opportunity – can you find alternative distribution channels/models? Some company’s will seize the opportunity to build new business, some will sit & moan about how hard things are without TRU. This is a time to refresh and renew, and we can be quite certain that a national scale toy retail specialist will return in the USA before too long.

So times have been easier, but there are considerable bright spots. Business growth is out there and waiting for those bold, fearless and relentless souls who will reach out and grab it.

We recently launched a new brand and product management service. This service has been very popular and is now full at the time of writing. Some of our brand and product management clients asked us to help them create YouTube content, so we recently launched a new strategic partnership creating content for toy companies. To find out more: http://www.kidsbrandinsight.com/toy-industry-veterans-launch-new-marketing-content-production-service-for-toy-companies/

15 January 2019 ~ 0 Comments

Toy Industry Veterans Launch New Marketing Content Production Service For Toy Companies

Matt Knott and Steve Reece announced today that they have launched a new strategic partnership offering content production services for toy companies.

With the growth of YouTube as a marketing platform, the pair plan to utilise their extensive experience of toy industry marketing and content production to the benefit of clients.

Matt Knott said “Steve and I share the same excitement for the toy and game industry, and it’s a mouthwatering prospect to be working with him again and offering the industry a smorgasbord of content creation. All that know-how and passion of working with toy and game companies from all over the World will give us a unique insight to make our clients successful. We’ve got the right people too with an abundance of creative talent. I can’t wait to get started.“

Steve Reece confirmed “After nearly 20 years in the toy business including brand marketing, advertising and interactive content production and having personally conducted more than 1,200 focus groups with kids & parents about toys, I felt the time was right to use what I’ve learned to help toy companies produce more motivating and compelling content. We are offering a specialist service based on in depth knowledge of the toy business and kids. Matt has decades of highest level content production experience, and having worked with him previously I knew we’d make a great team.”

For more information, or to arrange a meeting at UK, Nuremberg or New York toy fairs contact Matt via: [email protected]  or Steve: [email protected]

About Matt Knott: An experienced, well-connected Producer, Creative and published Game Designer, Matt’s delivered high profile projects for global brands, McLaren Automotive, BBC, blue chip organisations, and renowned visitor attractions, as well as successfully crowdfunding his own game, now distributed and licensed internationally. Passionate about the challenge of working across creative disciplines whether its concept creation, animation, 3D and product design, interactive and game development, or even data visualisation, Matt leads teams, with diverse talents, from initial brief through production and approvals to realisation of the project for clients. For more information go to: www.mattknott.co.uk

About Steve Reece: Steve is M.D. of Kids Brand Insight, a leading toy industry Consultancy. His experience includes working for Hasbro & others in market research, brand marketing, commercial management and interactive content management. The first YouTube content Steve executive produced launched to an unsuspecting audience back in 2007. He has a career marketing spend of more than £25m, but more importantly for every £1 spent he has returned at least £7 in sales over time. For more information go to: www.KidsBrandInsight.com

14 December 2018 ~ 0 Comments

Company Profile: Chalk & Chuckles

In the past few years, educationally focused toys have been quite prominent in the world of toys – which can only be a good thing! 

We seem though to have begun to emphasize STEM (i.e. science, technology, engineering & math/s) as the prevailing definition of educational/developmental toys. There are however many other ways in which toys and play can have a positive impact on child development and education.

One company – Chalk and Chuckles embraces these benefits, both with their award winning line of educationally beneficial and fun to play board games. They have also recently headed into other product categories with their new range/brand – Caring Cats.

Caring Cats is a super cutesy and stylish brand featuring a collection of cats that are very caring. The concept behind the brand is to encourage children and to help parents to encourage children to be empathetic and caring towards other people.

We caught up with the team behind Caring Cats – Pallavi & Prachi Agarwal to find out more about them/their brands:

STEVE: Please can you explain the background of your company/team and how you came to be in the toy and game business?

PALLAVI/PRACHI:

Chalk and Chuckles was born out of endless conversations between Prachi & I, which were repeatedly centered on how much parenting had changed, and the environment in which children were growing up now. Prachi’s work as an Educational Psychologist saw her working with children(both neurodiverse & neurotypical) and families daily that were often struggling with ways of connecting & promoting learning in a fun way. Something, that kept coming up in our discussions was how ‘resilience’ in children had decreased significantly. This coupled with us seeing children of friends & families only strengthened our belief. 

And somehow, we found our answer in “You are what you play”. This was really the starting point of Chalk and Chuckles. Our philosophy is encapsulated in our tag line that led to the name “Chalk and Chuckles” and then flowed the products. 

(STEVE’S NOTE: Pallavi’s background is in finance with a degree from the University of Nottingham; and Prachi’s background is in psychology & education from Harvard Graduate School of Education)


STEVE:  How did the idea for Caring Cats come about and what are your goals for the brand?

PALLAVI/PRACHI:

Stories of unkindness and intolerance are all around us and daily messages of achievement and personal happiness overshadow messages about concern for others. A growing sense of entitlement and need for immediate gratification have only compounded the problems in today’s time. 

The idea for Caring Cats really grew from our deciding to make a board game on Kindness that allows children and parents to expand conversations around kindness and promote empathy. We started with a simple belief that “kindness is always possible and there’s always something that you can do to be kind.” Resources, talent & temperament impact our way of being kind. Our goal was to make kindness easy and it had to be broken down into concrete actions. We narrowed down to 5 categories and thus were born the Caring Cats. 

  1. Kind with words (Chattychoo) 
  2. Make something to give (Makermax) 
  3. Give (Goodygum) 
  4. Help with time & talent (Helpfilli) 
  5. Thoughtful & courteous (Lotothot) 

The world needs more kindness and it’s not lost on us that we need to be kinder to ourselves too!  Thus, there’s another Caring Cat in the waiting.  

Our goal for Caring Cats is to build significant brand equity and establish it as a successful long term cross-category brand with a global footprint. We also aim to make it a part of the school curriculum.

STEVE: Please can you outline which products you have available for the Caring Cats range & why you chose those products?


PALLAVI/PRACHI:
We have divided our range in Plush, Board Game and Craft kits currently. We realised that the concept could be made accessible to a younger age group (4 year olds) and the Plush came about. They would be the perfect positive companions and role models. Crafts were a natural extension of activities that each of the cats could do to spread cheer 8 years to adult and the board game falls right in the middle when kids can understand gaming. We will be adding more categories in the long term.

STEVE: OK, thanks for telling us all about Caring Cats. Now can you explain more about your Board Games – what products you have, which markets they are available and your point of difference in the crowded Board Games market? 

PALLAVI/PRACHI:

Each of our Games comes from our philosophy; We say there should be no chalk without chuckles.

We take traditional “serious” concepts like maths, tidying up, grammar, spelling and blend them with gigantic doses of fun. We focus on core development skills, thinking & logic, attention & focus, imagination & creativity, language & communication, social & emotional, pre-academic & academic, movement and memory games.

In our Games, we don’t restrict ourselves to 1 medium; we use fabric, board, paper, wood and don’t use plastic at all. We focus on varied formats, could be Card Games, Board, movement etc. Most of our Games are Family Games that encourage engagement between the caring adults and children.

We are available in 16 countries, US, UK, Canada, Spain, Italy, Greece, Bulgaria, Romania, Israel, France, Russia, Ukraine, South Africa, China, Australia and India.

What sets us apart is that each of our Games has more than 1 way to play. It takes into account the varied ways the game can be used and accommodates the child’s different developmental levels. It is a blend of what can be used in both home and classrooms. Most of the other Games are either educational (boring and serious) or pure fun!


STEVE: And as we head into toyfair season, can you give us an idea of what kind of partners you are looking for/which markets are particularly interesting for you, and where can they meet with you?

PALLAVI/PRACHI: We are looking at reaching to large bookstores and to specialty retailers in the UK, USA, Germany, France and Spain. We will be there at Spielwarenmesse in Hall 10, D 19 and we welcome visitors to our stand.

STEVE: Great, thanks for your time today. One final question, where can people find out more about your company, products and brands? 

PALLAVI/PRACHIwww.chalkandchuckles.com is our website. Our products are available on Amazon in multiple countries and Barnes and Noble in the USA.

14 December 2018 ~ 0 Comments

Company Profile: Muñecas Guca

One of our favourite things to do in the toy business is to visit a factory making really beautiful toys, and to see those toys in various stages of build/creation. A recent visit to the Muñecas Guca (Muñecas is Spanish for dolls!) factory near to Alicante, Spain was one of those delightful experiences seeing hand crafted highly realistic baby dolls being produced.

Guca are one of Spain’s leading doll manufacturers and suppliers. They have been going for around 15 years and have in this time buil tup an impressive business as well as a highly committed and very skilled workforce. Over time Guca have built their business in Spain to the point where they are now in the top 5 for dolls in Spain, and number one for ‘Reborn’dolls. For those who haven’t yet come across ‘Reborn’ dolls, these are super realistic, highly crafted baby doll toys produced with huge care and attention. In Guca’s case, they are also produced with techniques which are patented/patent pending depending on which market we are looking at. One of the methods by which Guca achieve ultra-realistic hair on their baby dolls is by a special gluing process featuring real Mohair hair – and it is this process which is patented, meaning that while Guca can freely use this technique, other companies may not without infringing the patents (which have been vigorously defended to date).

Guca recently changed ownership, and with this change of ownership came an increased focus on international growth. Export Manager (and shareholder) Pablo Amorós has extensive international business experience from outside the toy industry, with a track record in import export in various product categories. We caught up with Pablo as part of writing this profile to ask him more about Muñecas Guca, their future plans and any news we can share:

STEVE: Pablo, it was a pleasure to visit with you recently and to see your impressive production facility. My first question for you is why you (and your fellow investors) recently decided to invest in Guca Munecas? What was it you saw which made you want to be involved?

PABLO: Hello Steve, it was nice to have you here, thank you for your visit to the factory. The decision of investing in Guca is a mix of different things, on one side is what we can call entrepreneur instinct, and then on the other the certaincy of having a nice and good business opportunity in front on me. Guca was the first factory positioning Reborn dolls for the mass market, and is positioned now in Spain as the Reborn leader. I thought, why not to do this in the rest of the world…and we are now here going for it!

STEVE: What do you see as the main strengths of Guca Munecas?

PABLO: The main strength of Guca is definitely our people. Our added value processes are all manual: painting, hair gluing etc., and these require detailed and in depth training and talented people to do it. Beside this, our success is just the passion and love that every worker puts on his work. Without this it would not be possible to get the high quality and finishing that we have in our dolls.  

STEVE: Which is your personal favourite product from Guca & why?

PABLO:  Difficult, but If I have to decide, I would go for Leo. He has everything, he has natural hair which looks very real and the hand painted finishing in head, arm and legs makes him look like a real new born baby.

Image result for guca munecas Leo

STEVE: Can you share any exciting news for 2019? Any new products or initiatives you can share withour audience?

PABLO: Well, I don´t want to spoil our presentation in Nuremberg, but we will present a completely new line of dolls, a new conceptwith a higher level of finishing than our actual Reborn Line. We will also present our new Corporate image, according with our new vision of the company.  

STEVE: My understanding is that the Reborn doll category is well known in some markets e.g. USA and Spain, but still growing in some other markets. Can you explain the underlying appeal of ‘Reborn’ dolls and why you think they will roll out globally to be a permanent feature around the world?

PABLO: Reborn dolls are so similar to real babies, this awakes similar feelings in people as when they hold a real baby. They all want to take care of them, to dress them, to hug them. We have different profiles of clients, most important are girls between 8 and 12 years playing to be mums, handling the doll like they see real mums with real babies!

STEVE: Can you give an idea of your Export plans and which markets you are working on next? Also, what kind of companies/customers are you looking to meet @ Nuremberg and other toyfairs?

PABLO: Well, until now our international market quote is quite low, so we can say we have everything to do. We are targeting USA, the biggest market for us as a specialist for Reborn dolls, but we obviously are targeting all the big markets in Europe as well: UK, France, Germany and Italy.  For big markets we are looking for sales agents, this way we can control better where we place our dolls. Other markets we are looking for potential partners, could be distributors or wholesalers. We are anyway open to consider every possibility on any market. This year we open our company to the world and we are definitely going for it.

STEVE: If we had this talk again in ten years’ time, where do you think Guca will be/how will things have changed and what would still be the same?

PABLO: Ten years!! – who knows :).We believe that Reborn has come to stay long term as a new category of doll. Anyway we are working hard to update our Boutique line, which is our traditional doll line, and must say that we are quite proud about the collection. Answering to your question, in ten years we would like to be a reference in the doll market, placing Guca between the top 5 doll suppliers worldwide.

STEVE: Thanks for this interview Pablo. If anyone reading this wants to contact you how can they get in touch?

PABLO: Anyone who would like to join our project please feel free to contact us at [email protected], we will go through every cooperation possibility. 

06 December 2018 ~ 0 Comments

Toy Export Sales – The Formula For Progress

TOY EXPORT SALES – THE FORMULA FOR PROGRESS

If you analyse the global toy industry, once you get past the top few toy companies, who tend to have subsidiaries in any market/region worth the effort, you find an industry whereby the vast majority toy sales are made on a domestic/export split. In other words, toy companies will tend to be very well established with leading toy retailers in their home market, but then will tend to work with distributors in other countries.

If there was a formula for successful toy export business it would be something like this:

Time/Persistence x Legwork x Quality of product x Quality and depth of relationships x Selling ability/focus

Normally, it takes time to establish a full network of distributors. There are so many companies, brands and products to choose from that even if you have something really good, it will take years to establish a full global distribution network. The number one failure factor I have seen having consulted with many companies on how to grow their international sales is false expectations and budgeting of the likely rate of progress. It doesn’t usually work very quickly. OK, you may be able to find a handful of examples where something went global quite quickly, but for every globally distributed product that did it quickly there are at least 1,000 which did it typically i.e. slowly, in fact, a 3 to 5 year build is typical.

At the time of writing, we have helped companies create new distribution arrangements into the following countries: USA, Canada, Mexico, Brazil, Argentina, Chile, UK, Eire, Benelux, Sweden, Norway, Denmark, Finland, Iceland, France, Germany, Russia, Spain, Italy, Portugal, Eastern Europe, Middle East, South Africa, HK, Malaysia, Singapore, Australia, New Zealand, Japan, South Korea – oh, and in case we forget – Liechtenstein! There are probably others we forgot, but in all these cases, the prevailing trend was TIME, it took time! Maybe around 5% of these markets were entered within 1 or 2 meetings as there was such an obvious fit between the two companies & the products were an obvious opportunity. But for 95% of the markets/projects, it took multiple meetings, and took longer than any of us expected/wanted!

The second factor which goes along with time is ‘leg work’ or ‘grind’, call it what you will – doing all the shows, taking a few more meetings than the other guy, following up just one more time on that unanswered call/email etc.

Clearly you also need a good product, but that should go without saying. To have any chance of competing in a world with millions of individual toy products, you had better have something that compares well – the two golden questions to ask in development of products is this: a). why should any distributor/retailer put this product on the shelf/online store vs all the thousands they get to choose from and b). why would a consumer choose ot buy your product over the millions of others they could choose from?

Clearly the capability of the sales person and their focus on the business is a key factor, although if you speak to the most successful sales people they will usually tell you there is no real secret, just hard work and persistence, but these factors develop quality relationships which in the end becomes a major factor in success. If you don’t have those relationships yet, you can always use the services of consultants and/or reps to try to get to more markets more quickly. Over time, that is the only accelerating factor we have seen work time and time again, although that is to be expected as that is a key type of project we work on!

As we get towards the start of toy fair season, everybody is looking for a good 2019, and a quick fix to sales for the next cycle, but it’s normally good to remember that we’re (most of us) in this game for the long run, and the relationships and distribution networks you build today should still be there for tomorrow if you nurture them and manage them properly. So sometimes we mistake quick progress with success, when actually the real success element is long term sustainability – and this takes time to build!

 

 

We recently launched a new brand and product management service. Our small team of highly qualified, experienced toy people are now working with toy companies on a project basis to support them where they need flexible resources. Part of this service is outsourced Export Sales Management. If you need help to boost your export sales, you can find out more here: http://www.kidsbrandinsight.com/services/ 

23 November 2018 ~ 0 Comments

The Toy Industry Goes Acquisition Crazy – But Why?

THE TOY INDUSTRY GOES ACQUISITION CRAZY – BUT WHY?

The last few weeks have seen a flurry of acquisition activity in the global toy industry. In fact, while there have been many individual company sales of comparable or larger companies, I can’t remember so many in such a short space of time!

The question is why have we seen so much activity in such a short space of time?

Well, there are several drivers of this:

Firstly, the usual ebb & flow of business. We do normally see some transactions throughout the year as owner-founders look to move on, albeit the flurry of the last few weeks has been atypical.

Secondly, we’ve just been through the tightest part of the annual cashflow cycle for toy companies. Many toy companies, even the major corporate companies with massive brands, lose money in the first half of the year, as our sales are generally (not always but overall in general) weighted towards shipments to customers in the later part of Q3 and early part of Q4. So if there is going to be an acquisition it is usual for that process to begin towards the end of Q1, with completion towards the end of Q2 or into Q3.

Perhaps the most atypical factor we have in 2018 though is the failure of Toys R Us. From the evidence available in the public domain and from conversations I have had, the big impact is not in lost future sales, because lost future sales can be dealt with via restructuring, cost cutting and increased business with other retailers/new markets. The challenge for some toy companies has been that we as an industry backed our global retail icon Toys R Us because we wanted it to survive in that format. Unfortunately, this goodwill was not rewarded, and many toy companies were left with bad debts from Toys R Us. The one thing that is really hard for a toy company to take is bad debts as the sales represented are planned to be used to cashflow the next cycle. I’m not identifying any particular acqusition target as having been particularly affected by the TRU bad debts, but as a general point clearly this is most likely to be a heavily contributing factor overall!

Finally, the industry dynamic is really interesting right now. There are numerous companies of a certain size that have been in business for decades, but right now seem poised for more growth as they reach a stage in their development and size where acquisition targets become available, as does the cash to fund purchase, while these acquisitions are now too small to be viable for Hasbro & Mattel.

In short, the past few weeks have seen a real flurry of acquisition activity, and it doesn’t look like this activity will be ending any time soon. We’re expecting a few years of consolidation in the global toy industry. Interesting times ahead!

 

We recently launched a new brand and product management service. Our small team of highly qualified, experienced toy people are now working with toy companies on a project basis to support them where they need flexible resources. We have worked on/Consulted with many top collectable toy brands/products. To find out more, head to our sister company Kids Brand Insight here: http://www.kidsbrandinsight.com/services/ 

Moreover, while we’re discussing toy industry acquisitions, if you’re looking to buy a toy company or sell one, we can help you find good companies to buy and good people to invest/acquire, just drop us a line!

09 November 2018 ~ 0 Comments

WHY COLLECTABLE TOYS ARE NOW DRIVING THE TOY INDUSTRY

WHY COLLECTABLE TOYS ARE NOW DRIVING THE TOY INDUSTRY

Collectable (sometimes called ‘pocket money’) toys have been around for a long time.

There are certain timeless fundamental factors for collectable toys including real tactile appeal/compulsion, cues for collecting e.g. wide character matrix and portability to allow children to carry the toys around and play with them wherever their friends are e.g. school, playground, friends house etc.

Traditionally this category was largely ignored by the larger toy companies because you have to sell high quantities of units at 3 or 4 €uros/USD/£GBP to add up to the multi millions big companies typically need to make a product or brand worthwhile.

This changed though during the financial crisis, suddenly the world economy tightened, and the major toy companies took the strategically sound step of launching more lower price point toys at a time when money was very short for many families.

In the last few years, the collectable toy category has become a primary driver of the toy industry. While we once looked to movie toys for the growth spikes in the global toy industry, today movie toys appear to be more like a solid foundation with a movie slate with constant output of toyetic movies which means we don’t have quote the same peaks and troughs as we once did. Instead, today collectable toys are really driving the overall industry growth trends.

The key players in this space – Moose, MGA, Spin Master etc. are of a size where they can develop and deliver big things, but they are small enough (or at least have been until this point) that they can follow the trends and try risky new product launches which would be too ‘out there’ for the more corporate long established companies.

The key trends which we see driving the collectable categories current strength are:

  • Changed Viewing Habits  – i.e. children not watching as much ‘TV’, so toy category not as TV advertising driven as in the past, but more driven by YouTube content, this is after all increasingly where kids are viewing. This allows kids to share online what they like and to share their play patterns in the way that previous collectable toys couldn’t. For sure we’ve always had the ‘playground effect’ where schools become viral toy drivers, but today we get that PLUS online viral effect.
  • Collectable but higher priced – this has been a major move, toy pricepoints seem to have been set in stone for decades i.e. a board game costs €14.99-19.99, an action figure $9.99 to $19.99 etc. If you look back at toy ads from the 1980’s on You Tube, you can see pricepoints which are scarily close to the price points today! What this means in practise is that most toys are no longer a considered purchase, but more of a throwaway product. $10 or $20 is nothing nowadays, and so children get given anywhere from dozens to hundreds of $20 toys during their childhood. This leads to a phenomenon I have outlined before – ‘TOY STOCKPILING’ – whereby children have toys overflowing from their homes but don’t actually spend much time playing with them. The last few years has seen a real pushing of ‘collectable’ toy pricepoints as the consumer proves that the hard price point categories our retailers have shoe-horned us into are no longer valid. All those times a retailer told us that type of toy HAS to be $3.99 or 9.99 or maximum ceiling is $19.99 etc., yet the consumer is now far more in control of what is on offer to them to buy. Therefore, when L.O.L. Surprise! and other toys which have the same format as traditional ‘collectable’ toys ramp up the offering to double (or even higher) the previous pricepoints they are riding the wave of the point in time when the historical trend of under priced toys reverted to more realistic pricing. Combining high volume items with pricepoints which are twice as high as the traditional ceiling for collectable toys solves that historical issue of collectable toys selling lots of units but unimpressive total $$$ as mentioned above!
  • Unboxing/surprise – while YouTube unboxing is comparatively recent, surprise is not new – this has been a key element in selling some lower price point toy items for decades. The combination of the two though is proving to be a ridiculously powerful formula for toys! With unboxing videos now being a primary marketing driver for the toy industry overall and especially for some categories, combining ‘Surprise toys’ with this paradigm blasting marketing model has proven to be MASSIVE for the toy business, and is arguably fundamentally the biggest driver of the collectable toy category and therefore currently the toy industry as a whole!
  • Top notch toy design and ideation – this is arguably less a trend and more a competence, but there is no doubt that there is some clever clreative thinking behind many of today’s successful colelctable toy lines.

So, these are actually very exciting times for the toy industry because we’re in the midst of a toy marketing revolution which is yet to reach full maturity, and those companies quick, agile and risk resistant enough to ride the new wave are winning through and growing rapidly.

 

We recently launched a new brand and product management service. Our small team of highly qualified, experienced toy people are now working with toy companies on a project basis to support them where they need flexible resources. We have worked on/Consulted with many top collectable toy brands/products. To find out more, head to our sister company Kids Brand Insight here: http://www.kidsbrandinsight.com/services/ 

 

31 October 2018 ~ 0 Comments

Kids Brand Insight Launch New Brand & Product Management Service For Toy & Game Companies

KIDS BRAND INSIGHT LAUNCH NEW BRAND & PRODUCT MANAGEMENT SERVICE FOR TOY & GAME COMPANIES

Kids Brand Insight, a leading toy & game industry consultancy have announced the launch of a new support service to the global toy industry.

Under the service, Kids Brand Insight will offer hands on ongoing and ad hoc project based support to toy and board game companies in the area of brand and product management.

The service covers the following areas:

– Brand Management inc: Brand definition & brand strategy, Brand gap analysis, brand extension, consumer insight, brand marketing & competitor/market analysis
– Product Management inc: Product development leadership & process implementation, from briefing to finished product, factory liaison etc.
– Marketing Management inc: Marketing strategy, marketing planning, marketing execution, agency management, TV advertising management – production & media buying management, PR agency management, social media marketing management
– Brand Licensing inc: Licensing review/selection, licensing pitches & terms negotiations, licensing contract negotiations & writing.

 

For more information on the service or to seek to enter the program, more information can be found here: http://www.kidsbrandinsight.com/services/ 

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