E Is For Etch A Sketch, Elmo & Electronics – A-Z Of The Toy Business

E Is For Etch A Sketch, Elmo & Electronics – A-Z Of The Toy Business

Etch A Sketch

This must be one of the most iconic creative play toys out there. First brought to market in 1960, Etch A Sketch allows children to ‘draw’ impressive pictures with a fun and visually intriguing reset mechanism and with some structural aid to draw good linear shapes. Invented by André Cassagnes, a Baker’s son from near Paris, France, who went on to also become a well-known inventor of Kites. In the first year on the market Etch A Sketch is reported to have sold more than 600,000 copies., and in total since 1960 the product has sold more than 175 million copies – an incredible number. The product is still on the market today, with Spin Master having bought the brand in 2016, it looks like this iconic toy is going to be a classic toy forever more.

Elmo (Tickle Me)

Tickle Me Elmo is the very definition of a massive hit product. In the region of 1 million toys were sold in the launch year (1996), and by the following Christmas over 5million had been sold. Elmo of course was a character in Sesame Street, which was as big as a kids’ entertainment program could get back then. Elmo’s feature was to shake, vibrate and to recite his catchphrase. For children, the appeal was massive, because Elmo is the epitome of a cute character, in a cuddly and interactive format that really brought Elmo to life. There have been numerous attempts to bring Elmo back, but with lesser success, but regardless of that, for those people who were in the toy business around that time, Elmo remains the ultimate dream – a massive sell out success product which was 5 times bigger in year two than in the already impressive first year of sales.

Electronics

Ever since consumer electronics came on the scene, the toy industry has done a magnificent job of taking technology and dumbing it/pricing it down to fit toy price points and to deliver compelling play experiences. Way back, the Speak & Spell from Texas Instruments was an electronic educational product which would ask children to spell words & other simple tasks – this product was entirely reliant on electronics. Clearly electronic products are more expensive to develop, because in addition to the usual tooling & other development costs, you also have to develop the electronic components which all adds $$$ to product development. Therefore, launching electronic products in a market where most products miss the mark and fail to come back for a second year can be very risky. When it works though, the results can be extraordinary, Furby is a great example of a product bristling with electronics and other technologies, which sold more than 40 million units in the first three years of launch. Some years later, new versions of Furby featuring updated electronics and full of technology patents was highly successful again. So, Electronics can help toy companies to deliver fantastic products, albeit with some risks attached.

Do you need help to understand the toy & game business? We help people from all around the world to understand and successfully enter the toy business. For more information on how we do this, check out our services here: www.KidsBrandInsight.com/services

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A To Z Of The Toy Business – D Is For Disney

A To Z Of The Toy Business – D Is For Disney

This was probably the easiest of our A To Z articles to write, because there is really only one Licensor who is completely ubiquitous in the toy business, and that of course is The Walt Disney Company. There is no toy company which has so many iconic brands and characters, there is no entertainment company which compares in terms of scope and strength in family entertainment, they have more than 300 of their own retail stores only selling merchandise based on their own franchises and characters, they have TV channels, massive movie release slates and of course more recently they have their own super successful direct to home viewing platform in Disney+.

If we take a quick look at the key properties relevant to toys owned by the Walt Disney Company, we don’t need to list many before we have a collection of the most successful toy licenses ever: Star Wars, Marvel, Toy Story, Disney, and we’ve barely even started at that point! Star Wars is THE toy license, ever since the first movie released back in 1977, Star Wars has been a merchandise shifting juggernaut of a brand, with a massive and deep character universe, endless variations of vehicles and space craft, massive depth in story and classic dialogue, heroes and villains, not to mention some of the most entertaining movies ever made (we’ll skip quickly over the very forgettable Episode 1!).

Since Disney acquired Marvel in 2009, Marvel movies have dominated the global box office with more than $22bn in box office takings across the franchise. In the toy business, Marvel has become a powerhouse on its own, regardless of the broader successes of The Walt Disney Company. Again, the character universe is strong and broad, with a hero or heroine to appeal to everyone.

Even looking at classic Disney icons like Mickey & Minnie Mouse, these classic characters continue to drive significant Plush toy sales each and every year. The classic Pixar movies like Toy Story have some ever-green appeal, and with a seemingly endless array of sequels Toy Story is set to be a classic toy brand for ever more. Pixar’s new releases are normally critically acclaimed and quite often unleash hit toy lines.

From media platforms to Monsters Inc/University toys, from Disney brand to Donald Duck and from Stormtroopers to Sven, The Walt Disney Company has developed over time into the primary global driver for licensed toys & games.

Do you need help to grow sales for your toy company? We help people from all around the world to sell more toys, both in their home markets and into export markets. For more information on how we do this, check out our services here: www.KidsBrandInsight.com/services

U.S. Toy Market Enjoys A Strong Start To 2021

U.S. Toy Market Enjoys A Strong Start To 2021

NPD just reported a strong performance year to date for the toy market in the USA through to April. Most probably the first four months of the year look good as the corresponding period last year aligned with the first pandemic lockdown in the USA, but nevertheless, it was lockdown and frustrated parents and bored kids which were said to have driven sales so high in the middle sections of 2021.

NPD reports the market as being 27% up year on year in $USD terms, with both units sold and average selling price increasing during the reported period. What is also notable is that nearly every super category has grown considerably. One of the immediate impacts of the pandemic hitting was the pulling of movie releases across the board, a year later though we have the ongoing hybrid model of direct to home viewing alongside cinema reopening’s (with restricted capacity), and as such those categories which are typically heavily influenced by the movie release slate have done better year to date than they did last year when ready to go toys were shelved in some instances to await eventual release dates.

Needless to say, it will be hard to keep the year-on-year comparables strong across the entirety of 2021, and across all categories, especially after parentally approved product categories had such a marvellous 2020, but nevertheless, there are plenty of reasons out there to be cheerful if you choose to take a positive view!

To read NPD’s press release in full, just click this link:

https://www.npd.com/wps/portal/npd/us/news/press-releases/2021/the-npd-group-us-toy-industry-sales-experience-27-percent-increase-year-to-date/

Yantian Port Congestion Demonstrates The Need For Supply Chain Diversification

Yantian Port Congestion Demonstrates The Need For Supply Chain Diversification

Due to covid cases rising in and around Yantian port in China, this critical shipping hub for the heart of toy manufacturing has been closed and although now reopened is not working to full capacity, causing an inevitable backlog of containers and ships. In a year where we have already seen demand for shipping significantly exceed supply, causing container prices to rise this not a good thing at all. Even more so as we are now heading into the peak shipping window for toys heading to North America and Europe for peak season sales in Q4.

Back when the covid crisis first hit China, our company had a flood of enquiries about toy manufacturing in India as panic gripped sourcing teams in the toy business. Then India’s covid wave hit and suddenly people were not that interested at looking for sourcing outside China. And now due to this issue with Yantian port, our phone lines have begun ringing again.

If you look at the sourcing strategy of the major corporate companies, risk reduction plays a big part in their approach. The bottom line is that if you don’t have any stock, you can’t sell anything, and therefore you aren’t in business. For this reason, even for smaller to mid-sized companies we recommend a diversified approach to Sourcing in terms of locations. A successful sourcing strategy today probably includes a majority of stock still sourced from China, but with perhaps 10-20% additionally coming from Vietnam and India to diversify risk. For some product categories, it may be realistic and even prudent to source even closer to home. Board games for example can be sourced in North America & from across Europe, albeit with a bit of a price premium. There are factories in or near to Europe producing compounds like dough. But for plastic toys & plush, Asia still remains the primary source for the toy business.

Larger companies have a bigger risk for diversifying production, because if you need to relocate $1billion of toy manufacturing you can’t do that quickly, but for smaller companies quicker moves should be possible. This though doesn’t mean that you should just knee jerk react every time there is an issue. One thing that is obvious is that China will lose toy production capacity as factories either go out of business or advance into more complicated and higher cost product types. So, any business which wants to avoid the cataclysmic risk of having no stock to sell should have already tested the waters and started to source some products from outside China.

The issue with Yantian port should clear quite quickly, and in the end should not have a significant impact on sales for toy companies in 2021, but from a strategic perspective it makes sense to have live alternatives which can be ramped up as required.

C Is For: China, And Cute Toys Like Care Bears

C Is For: Cute Toys Like Care Bears And China

‘Cute’ is a massive thing for the toy business. Toys which are super cute and huggable are often very compelling for children. The younger a child is the more their sense of touch takes priority over the other senses. That’s why a really cute, soft toy will be loved by kids.

Care Bears is an iconic toy brand first launched in the 1980s, and now back in the market via Basic Fun. More than $1billion of Care Bear toys have been sold across retail. There are a number of ‘best practise’ elements of Care Bears to observe: first, a range of characters with different looks, colours and characteristics. They also have a distinctive and presumably ownable pattern on their tummies to differentiate them from any other teddy bear products in market. Care Bears (as the name suggests) encourage caring for other people, something which is very appealing for parents who are trying to teach their kids the right way to interact with other people and the world in general. And then finally (of course) they are super huggable and cute!

China has been a force in the toy business for many decades. Originally entering the toy manufacturing sector with massive and cheap labour force as the attraction for toy companies competing in the massively price sensitive business of toys. Today China is many things to the toy business – it still remains the primary hub for toy manufacturing globally, although the country as a whole is transitioning upwards in terms of manufacturing capabilities there is still a massive array of toy factories of all sizes and shapes. But as the economy in China increasingly moves beyond cheap products to more advanced manufacturing, China’s growing domestic market is the second biggest in the world and growing.

A To Z Of The Toy Business – B Is For Brands Like Barbie

A To Z Of The Toy Business – B Is For Brands Like Barbie

Brands are so important in the toy business. Because our childhood is such a pivotal time for human beings, our childhood experiences become deeply engrained within us. We form a strong emotional attachment to the toys & games we play with as children. If we play with a particular toy when we are young, and that toy is still around when we are buying toys for our own children, we are much more likely to buy the toys we loved, albeit (hopefully) updated and modernised for the times.

One brand which has very definitely passed the test of time is Barbie. Originally launched as far back as 1959, playing with Barbie has been a rite of passage for generations of young children. Barbie has tended to reflect the times, in terms of fashions but also in terms of society and social narrative. In recent years Barbie has become broader in terms of inclusivity to reflect the zeitgeist of the times, and in the process remaining an integral part of the childhood of many children.

Brands in the toy business though are not just about warm rosy feelings of nostalgia. They are also about hard cash. Barbie alone generates more than $1bn (USD) per year for brand owner Mattel. Barbie obviously isn’t the only toy brand delivering massive sales, brands are ubiquitous in the toy business. In many ways in fact, the goal of every toy company should be to create, build and commercially exploit brands. In a business where more than two thirds of toy products on shelf each year are new, brands become highly profitable as they often need less marketing, can often carry forward into subsequent years, sometimes need less investment and are more likely to be listed by retailers.

Brands can also create significant tangible brand equity. If you look at the history of growth for major toy companies, the big landmarks along the way are often major acquisitions of toy brands. The most recent example would be Spin Master’s acquisition of Rubik’s brand and the iconic Rubik’s cube.

Brands are the fundamental foundation of most toy companies enjoying longevity and sustainable growth.

A To Z Of The Toy Business – A Is For Action Man

A To Z Of The Toy Business – A is for Action Man

Action Man is to the European toy market (at least historically speaking) what G.I. Joe is to the U.S. market. Launched way back in 1966, at first the appeal or potential of Action Man was questioned because the prevailing attitude of the time was that boys would not want to play with ‘dolls’. The same thought process applied in the U.S. to G.I. Joe, and in both cases was proven quickly to be erroneous. Boys loved Action Man, for all the reasons we would today recognise – the value of imaginative play & development of how to interact with the world around.

Originally Action Man was a military character, to appeal to generations of children whose parents or grandparents had been through World War 2, during a time when the impact of WW2 in popular culture was at its strongest – this was the era of the epic, all-star WW2 movies.

Hasbro relaunched Action Man in the 1990s and saw big success in the European toy market for around a decade with Action Man being one of the major toy brands in the European market during this period. The themes and clothing were changed during this time, to make Action Man more of an adventurer and extreme sportsman and to reflect the zeitgeist of the time, whereby militaristic toys were no longer approved of by parents.

Eventually the second coming of Action Man faded away, and due to Hasbro’s increasing focus on global product development and launches, it became apparently harder and harder to justify local product development for Europe. At one point in time Hasbro had a centre of design excellence with some of the best creative people in the toy industry at their European HQ in London, but as with all things in the toy business, the world moved on, and Action Man faded from a prime position in toy retail to a fond memory…

…that is until UK company Art & Science International brought to market a range of retro Action Man products under license from Hasbro. You can find those products here: https://www.actionman.com/the-range.php

Rumours occasionally swirl around relating to a full reboot of Action Man, but for now it remains a fond memory of many adults who played with the toys as children themselves, and at least retro Action Man products are now available again!

Our team has worked with and for Hasbro, owner of the Action man brand. We have also Consulted for more than 100 other toy companies. To find out more about our toy & game business Consultancy services, just click here: www.ToyIndustryJournal.com

For more articles & insights on the toy and games business, sign up here for our free e-newsletter sent straight to your inbox: https://forms.aweber.com/form/54/1325077854.htm

Reinventing Construction Toys With Toyi

Reinventing Construction Toys With Toyi

Our company works with a lot of up-and-coming toy & game companies. We are often asked to look at new entrants into the Construction toy market, which in some ways is the hardest toy category of all to enter because of the massive strength of the dominant player in that space (no points for guessing which Danish toy giant that is!).

Some new entrants have a different Construction system, and over time we have seen companies enjoy some success with this approach. Recently though we were asked to take a look at an up-and-coming Construction toy company who are trying to reinvent the way Construction Toys are player with by children. Whereas traditionally it is the building process itself combined with the ‘trophy’ value which defines Construction toys, with Toyi the construction is only part of the play experience.

Toyi’s ground-breaking products look to offer a more open-ended play pattern to children, without structured instructions to follow. Children build the toy, and then they play with the toy. The object of the toy is whatever the child wants. Some of the components act to create a character or to personify inanimate objects. The premise of Toyi is to turn everyday objects into toys – whether that is plastic bottles, drinks cans or other everyday objects. And by adding TOYI components to these objects the child can effectively create their own toys on an ongoing and open-ended basis. Therefore, the play value for children is massive, and in some ways never ending.

One of the other fundamental features of Toyi is sustainability as a key message. Aside from facilitating children learning about ‘upcycling’ by re-using objects which would otherwise have been thrown away, Toyi also has a number of Green initiatives – the product is made from recycled plastic and materials, and most components are recyclable.

There is (of course) also a commercial side to Toyi’s journey. Toyi started as a University project by co-Founder Elif Atmaca, but soon found commercial backing first via a successful Kickstarter campaign which raised $24,000: https://www.kickstarter.com/projects/toyi/toyi-transform-everything-into-unique-toys. The company also raised funds from venture capital to finance the company’s ongoing growth, with distribution into 13 markets already, the company is currently working to find distributors for Germany, Nordic, Korea, Japan and some other markets.

Co-Founder Ögeday Uçurum told us that:

“Toyi‘s successful start has given us renewed confidence in our growth plans. We are now in the process of stepping up to the next level with our business, and we would love to hear from distributors around the world who share our values and want to join us for the next stage of Toyi’s exciting journey.”

More information on Toyi can be found here: https://toyi.io/en/whatistoyi/

Or for those looking to buy Toyi products on Amazon, just click here: https://amzn.to/3tYGuXG

Understanding The Second Coming Of Fidget Toys

Understanding The Second Coming Of Fidget Toys

At the time of writing (May 2021) Fidget toys are BACK! A quick look at the sales charts on Amazon.com & Amazon.co.uk suggests that Fidget toys are the hot items right now. Amazon.com has 4 Fidget toys in the top 10 best sellers for toys, and for Amazon.co.uk it’s 7 out of 10 of the best sellers.

So, what is driving this massive resurgence of Fidget toys? There are some obvious drivers to consider:

Schools go back – the Playground Effect

The toy business was up overall during the pandemic, but there was a clear shift from kid driven toy purchases to more parentally approved purchases. Science and activity kits, board games and puzzles sales went up, but kid driven categories like collectibles and impulse toys were down. Historically, a massive driver of trends and fads in the toy business has been the viral effect of kids talking to kids in the playground at school or elsewhere. When schools & other activities were locked down and not available, this massive driver for toy sales was shut down. Once lockdowns eased, most notably in the world’s biggest toy market – the USA – then this powerful Playground Effect came back, and Fidget toys came back.

Toy Stores re-open

Mass market generalist retailers are less critical for the starting phases of toy trends. They tend to come on board a little later when things go really big. That’s because this type of toy sells due to kids trying them out in toy stores. When toy stores reopened, suddenly there is a specialist retailer focused on getting kids playing with toys, not just shifting boxes out of the door!

Locked down kids released to spend their pent-up pocket money

Economists have reported a massive growth in household savings during the pandemic due to lack of opportunities to spend money combined with some feelings of needing to put money away for a rainy day. The same though is likely to have occurred with kids. Whatever birthday money or pocket money they have received has clearly been burning a hole in their pockets, and so in the same way as general consumer spending has increased in those countries which have come out of lockdown, so we should logically expect the same for kids and their pocket money toy purchases.

Tactile appeal is everything

Tactile appeal and sensory feedback are massive underlying drivers of successful toys. Children are more responsive to their sense of touch than adults generally speaking. Textures on toys are critical, and one of the recurring product feedback suggestions we give is to add more physical textures to toys to increase tactile appeal. The sense of touch is so stimulated by Fidget toys. The analogy we use with our clients is of that person in a meeting who can’t stop clicking a pen in and out repeatedly…this becomes really annoying for everyone else, but it is so compelling for the person with the pen it is hard to stop. Within that impulse lies the appeal and compulsion for Fidget toys.

Innovation in play takes time

First time round the Fidget toy boom came and went so quickly (as is often the case with these things), that there was not a great deal of time for really high-quality product development. Several years later, creative minds have had time to stretch the concept and to work out new compelling executions of the basic idea. So, this time round the bar is set higher in terms of play experience, which hopefully will make the resurgence last longer.

Our prediction overall is that Fidget toys will keep coming back time after time, so don’t throw away any tooling or tool plans, because you don’t know how quickly the trend may come back! Every few years or so Yo-Yos make a comeback, as do plenty of retro products. Fidget toys are just one more classic play pattern set to re-emerge every few years in the future!

We run a Consultancy business for toy & game companies. We work with major toy & game companies through to start ups and one person bands. For more information on how we help toy & game companies grow their distribution around the world: www.KidsBrandInsight.com/services

For more articles & insights on the toy and games business, sign up here for our free e-newsletter sent straight to your inbox: https://forms.aweber.com/form/54/1325077854.htm

China’s Decreasing Birth Rate: Less Of A Growth Restrictor Than Might Be Expected?

China’s Decreasing Birth Rate: Less Of A Growth Restrictor Than Might Be Expected?

China just released Census data from the work of 7 million census takers in late 2020. The major highlights of the data are two-fold: Firstly, the overall population growth rate reduced, although this was marginal – from 0.57% between 2000 to 2010 to 0.53% for the period from 2010 to 2020. This in itself is hardly news, because due to the long term one child per family policy which was only relatively recently rescinded, birth rates have been low. Which brings us to the second major finding – only 12 million babies were born in China in 2020, versus 18 million in 2016.

So, it looks clear from this data that China’s population maintains very modest growth primarily through increased life expectancy. Bearing in mind life expectancy in China was a shocking 45 years of age as recently as the 1960s, the country’s current life expectancy of 77 is expected to keep on rising. Based on projections we found this could be into the high 80s by the end of the 21^st century.

China is not alone in seeing increased life expectancy and reduced births. This is a problem across many countries in the modern world. China though is not like any country. The meteoric rise of the economy and living standards has been a phenomenon like no other in history. With China poised to become the world’s biggest economy at some point in the not-too-distant future, anything which threatens China’s future economic growth is a threat to the global economy.

More specifically though for the toy business, a hefty drop in the number of children being born means less kids to play with toys. While this may seem on the face of it apocalyptic (it certainly would be in the USA or European toy markets), we have to remember that China’s toy market is still growing and maturing, and as living standards and disposable income continue to grow in China, the number of people who can afford to buy toys for children grows, as does the total spend per child in those more affluent families. Think of two graphs going in opposite trends – one moving down (birth rate), and one moving up (disposable income & spend per child). The net result is less catastrophic than the headline birth numbers might suggest.

The second perspective from a demographic point of view is that due to the ticking time bomb of ageing population, China’s government seems likely to need to more effectively incentivise Chinese people to have more children. While we haven’t seen evidence of this to date, it seems likely steps will have to be taken over the next decade to boost the birth rate and to support the economy and demographic balance of society.

One additional point that is important to understand is that the total number of births in China remains is still high versus other countries. While 12 million births in China is a big reduction, it still remains by far the second biggest number of births globally behind only India. To put this in context, for the period from 2015 to 2020, China had 4 times more total births versus the USA. With most international toy companies far from reaching market saturation in China, it seems likely that the total $ market value of China’s toy business will still grow over the next decade, albeit at a reduced rate due to the decreased birth rate.