Category Archives: Uncategorized

New Entertainment Content Releases Set To Bolster Toy Sales

New Entertainment Content Releases Set To Bolster Toy Sales:

Next Transformers Movie On The Way & Loki Wows Critics

This week news broke about the next Transformers movie – Rise of The Beasts, a movie set in the 1990s and set at least partly in Brooklyn. The movie is currently slated for a June 24, 2022 release date. And while the Transformers movie series seemed to fade away somewhat towards the end of the last phase of releases, with 3 movies grossing more than $300m USD at the box office, this new movie is set to herald a good 2022 for Hasbro.

Hasbro as co-brand owner presumably have ‘1st dibs’ on toy rights and based on previous instalments of the Transformers franchise will be likely to roll out a broad product line across toy categories. They will also benefit significantly from their consumer products licensing program.

What Hasbro really need though above all is a commercially successful movie. They will benefit in the short term anyway even if the movie doesn’t do that well, but they could really do with breathing fresh air into the franchise so that they can roll onto a few more movies across the next 5 years.

Another entertainment content release has been making news recently. Disney+ successfully launched Loki on their platform this month to critical acclaim. But perhaps more importantly from a commercial perspective, Disney CEO Bob Chapek announced that the first episode of Loki was “the most watched series premiere” for the streaming service. While we couldn’t find an extensive toy line based on this new TV series out on the market, we did find some new Funko figures coming to market in August. This leads us to an interesting conclusion – whereas major movies tend to need simultaneous product launch alongside the movie event, it appears that Disney+ is rewriting the rules of licensed toys. Following the content first, merchandise second approach of The Mandalorian which saw massive success for Baby Yoda toys despite delayed availability, it seems that there is going to be an ongoing raft of post release toy launches in conjunction with Disney+.

And of course, alongside these two particular franchises, the rest of the entertainment world is hardly standing still. There is much to be excited about looking forward for the toy business.

 

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

Have you listened to our Playing At Business podcast? We talk about selling toys & games, interview successful people from across the toy business & we look at key trends in the toy & game business: https://playingatbusiness.libsyn.com/

 

F Is For Fun, Frisbee & Factories

F Is For Fun, Frisbee & Factories

FUN

There are many complicated reasons why there is a toy business which is worth only a little under $100 billion globally. But the start point for explaining the size of the toy industry is that children (and adults) love to have FUN! Children are more hedonistic than adults with less concern for implications and responsibilities, therefore toy products which offer them a lot of fun will be very appealing! There are many developmental benefits of playing with toys, and these are quite often used to persuade parents to buy toys they don’t really want to buy for their kids. Developing fine motor skills, dexterity, visual observation, co-ordination, communication skills – all of these are positively enhanced by playing with toys, but it is usually a mistake to forget that toys are all about FUN!

 

FRISBEE

This iconic outdoor toy has a fundamental appeal based on something people love to do – throw and catch objects. With Frisbee though, the aerodynamic design/shape allows even children to throw the ‘disc’ further than they would be able to throw some objects, and even more compelling is the ability to develop skills to throw the Frisbee with fade, curl or even to make the Frisbee return to the thrower. Many a Frisbee experience involves a skilled player teasing the catcher with a fade away throw which appears to be catchable, but in the end just sneaks away due to the skill of the thrower. According to Wikipedia, there was a flying disc product on the market in 1937, but the brand name Frisbee first surfaced in 1957 associated with a product sold by Wham-O, who to this day still sell Frisbee. Total Frisbee sales to date are reported to be in excess of 100 million units, which is phenomenal. Generation after generation have enjoyed playing with Frisbee, and despite all the technological developments society has seen since 1957, this simple but hugely compelling toy is just as much fun as ever!

 

FACTORIES

Not the most exciting end of the toy business, but nevertheless, without factories we would have no toys to sell. There is a saying that ‘Innovation dies on the factory floor’, which is quite a negative perspective, but the reality is that a good idea is no good if it cannot be produced. The toy manufacturing landscape is a few years into a shift from China being the dominant toy manufacturing hub to more of a multi-hub situation with India, Vietnam & other Asian countries picking up toy production, alongside some ‘Near shoring’. Many in the toy business presume that China has always been the place for toy production, but if you speak to the old timers in the business, they will tell you of a time before China’s rise, when they sourced from Taiwan, Hong Kong, Japan & other hubs. Regardless of where the toy factory is based though, a good factory protects the factory workers, complies with all regulations for countries they are supplying and of course manufactures toys at competitive costs in what is a very price driven industry.

 

(N.B. F would also be for Furby, but we already covered that in the previous article in this series, see that article here: https://www.toyindustryjournal.com/e-is-for-etch-a-sketch-elmo-electronics-a-z-of-the-toy-business/

 

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

 

Have you listened to our Playing At Business podcast? We talk about selling toys & games, interview successful people from across the toy business & we look at key trends in the toy & game business: https://playingatbusiness.libsyn.com/

 

How To Manage The Current Logistical & Operational Chaos In The Toy Business

How To Manage The Current Logistical & Operational Chaos In The Toy Business

These are crazy times in so many ways…aside from the ongoing health scare of COVID-19, the logistical situation for those in the toy & games business is as disrupted as it has ever been before. Among the issues we’re trying to manage in our industry, we have container shipping rates which are anywhere up to 1000% of the standard rates in more normal times. We have manufacturing cost increases due to the price of oil going up (increasing the price of plastic), a cardboard shortage increasing packaging costs & costs for games & puzzles, shipping delays out of China – in part due to the container crisis, but also due to COVID-19 outbreaks in and around the port of Yantian, plus we had the closure of the Suez canal which blocked the shipping system even further.

There has been no other time this millennium, and possibly for decades before that which has seen such cost inflationary pressures and such logistical issues with getting stock from the Far East. Even if we can afford to put our inventory on a boat, the reality is that delivery timings are far less predictable than we have become used to.

So now we’ve run through the problems we all know about, what can we do about it? Here’s some suggestions, which although not perfect, may represent the best options available right now:

  1. Commit to stock earlier – a toy & game company without inventory to sell is not in business. Even if there are cost and therefore profitability impacts, we need stock to sell, especially during peak season. What this means is that prudent action would necessitate ordering stock earlier than normal. Obviously, this not ideal, because then you have additional warehousing costs and cashflow requirements, but these are not ideal times! Any toy companies not having ordered all their stock for the back end should probably consider getting those P.O.’s sent out asap.

 

  1. Negotiate price increases – retailers understand what the cost pressures are currently because many of them run their own FOB programs from Asia. Needless to say as always, some retailers will make these unavoidable price increase discussions harder than others, but nevertheless the conversation needs to be had.

 

  1. Review ‘Near shoring’ alternatives – let’s take a step back and consider why we source manufacturing from the far side of the world? The answer is cheaper labour and therefore lower inventory costs. But if we are paying as much as $15-20k per container for shipping, and let’s say we have between 5k to 10k units per container, we are looking at a crazy situation of paying between $1.50 to $4 USD per unit (!). So, if we are in the USA, the cost benefit of sourcing from Asia versus Mexico, or if we are in Europe, the cost benefit of Asia versus Eastern Europe or Turkey is completely eroded. The issue of course, is that there is nowhere near enough capacity ‘Nearshore’ for what our industry demands overall, but that is no excuse for not looking around and seeing what is available. The other advantage of manufacturing closer to home is speed. An Eastern European factory can truck product through to anywhere on the EU mainland in just a couple of days, meaning that resupply can be more closely aligned with demand as we enter the beginning of peak season.

 

  1. Manufacture/Assembly in local warehouse – it is not uncommon for local warehouses to have to fix small manufacturing issues, to apply labels and to repack products on occasion. But there may be more that your local warehouse can do. For instance, maybe your product needs to come from Asia still because your tooling is in the factory, and tooling transfer for a (hopefully) short-term problem is not deemed practical. But maybe the product can be assembled or placed in packaging locally. The more you can control the better in crazy times like these.

 

  1. Embrace the appeal of Scarcity – It’s hard to see how there won’t be some stock shortages this Christmas, and while hot lines normally do sell out, this year seems likely to have more out of stock products than ever before due to the logistical hurdles we are faced with. Should that happen, and you end up with less stock on hand than you wanted, you must do all you can to ensure it all sells out. One of the primary principles of consumer durables marketing is scarcity. By way of example, nothing makes a hot new product like a new iPhone, Xbox or other aspirational product become over subscribed more than a stock shortage. Therefore, if your stock looks short, you need to communicate that to your retail customers and consumers to try to drive scarcity perceptions and sell out what stock you do have.

 

Truth be told, none of these solutions are great – the bottom line is that everyone (aside from shipping companies!) would prefer to see the current issues resolved, but we have to deal with the grim reality which is in front of us. Here’s to hoping that 2022 is an easier year!

 

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

 

Have you listened to our Playing At Business podcast? We talk about selling toys & games, interview successful people from across the toy business & we look at key trends in the toy & game business: https://playingatbusiness.libsyn.com/

 

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

 

Have you listened to our Playing At Business podcast? We talk about selling toys & games, interview successful people from across the toy business & we look at key trends in the toy & game business: https://playingatbusiness.libsyn.com/

 

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

 

Have you listened to our Playing At Business podcast? We talk about selling toys & games, interview successful people from across the toy business & we look at key trends in the toy & game business: https://playingatbusiness.libsyn.com/

 

 

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/

 

 

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

 

Have you listened to our Playing At Business podcast? We talk about selling toys & games, interview successful people from across the toy business & we look at key trends in the toy & game business: https://playingatbusiness.libsyn.com/

 

 

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.

 

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

 

Have you listened to our Playing At Business podcast? We talk about selling toys & games, interview successful people from across the toy business & we look at key trends in the toy & game business: https://playingatbusiness.libsyn.com/

 

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.

 

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

 

Have you listened to our Playing At Business podcast? We talk about selling toys & games, interview successful people from across the toy business & we look at key trends in the toy & game business: https://playingatbusiness.libsyn.com/

 

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.

 

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

 

Have you listened to our Playing At Business podcast? We talk about selling toys & games, interview successful people from across the toy business & we look at key trends in the toy & game business: https://playingatbusiness.libsyn.com/

 

 

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

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