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Sustainability In Toys: What Happens Next? Part 1, Plastic

Sustainability In Toys: What Happens Next? Part 1, Plastic

COP 26 has been and gone. (Most) of the world’s leaders have agreed that urgent action is needed on environmental matters, not least of which is addressing CO2 output and global warming. While some of the solutions to global warming are beyond the ability of the toy business to resolve, there are clearly some actions we can all take which will help.

As we head towards another year it is perhaps a good time to take a look at where we are at on sustainability in the toy business. In the first article in this series we take a look at plastic:

Clearly the majority of toy products on sale are either mostly made from plastic or contain some plastic. Plastic being derived from oil and causing significant ocean pollution and other challenges has been very much in the public dialogue in recent years. Toy companies are increasingly aware of this. The low hanging fruit has been excess plastic in packaging, because plastic is cheap comparatively it has always been a large component of toy packaging (including the ties and fittings used to secure product during transit in pack). Much of that type of needless plastic has already been removed, but there is more still to do on that front. Solutions include clever packaging engineering to remove or at least reduce plastic usage, using sustainable materials such as cardboard and removing unnecessary shrink wrap on some products.

Looking forward, there is of course a potential long-term successor to plastic derived from plastic – that is ‘plastic’ produced from sustainable materials. This ‘bio-plastic’ is already available and being used by some companies in products. Lego has made large strides in this area, and is committed to going much, much further. In 2015 Lego announced a $150m investment in formulating a biobased alternative to oil-based plastic bricks, and their pledge is to switch all Lego bricks produced from 2030 onwards (that’s some 60 billion bricks p.a.!) to bio plastics.

Without getting too far into material science, we do know that there are some drawbacks with bioplastics, at least currently. Firstly, they are not proven to be as durable or to hold their shape as long as oil-based plastics, but perhaps that can be addressed with science/technological advancements over time. We also know that bio plastics are considerably more expensive – from talking to people in the business, we have heard costs to be c. 30% higher. At this stage it is not clear whether this is a price variance which can be reduced over time with volumes of scale, but it is clear that consumers are going to need to be willing to pay more for a greener product, and that retailers are going to need to support that also to get mass adoption of toys made from bio plastics.

We predict big change ahead in this space – plastic is so clearly in the environmental firing line, that bioplastics are an inevitability. As always, some companies will lead the charge, and others will lag, following far behind, but over the next decade we predict a mass transition from fossil fuel-based plastics to bio plastics in the toy business.

Stay tuned for the next instalment of this series of articles on Sustainability in toys.

 

We run a Consultancy business helping toy & games companies get ahead. For more information, check out www.KidsBrandInsight.com/services

We also run a Strategic Sourcing Consultancy advising toy & game companies around the world on their Sourcing strategies, reviewing their vendor base & suggesting improvements. To date our Sourcing services have saved our clients $tens of millions. For more information on how we can help, just go to: www.ToyTeamAsia.com

 

Will The Ongoing Artificial Intelligence revolution revolutionise the toy business? And in what ways? PART 1

Will The Ongoing Artificial Intelligence revolution revolutionise the toy business? And in what ways? (Part 1 of 2)

Part 1 of this 2 part article series takes a look at AI in general and how it will impact the toy business. The next article, part 2 will look at how AI can help us create even better toys.

Those of us who have been working across the last 20 years have been lucky enough to witness the Internet Revolution. History books in the future will show that the last twenty years or so has been more disruptive and seen more fundamental change and development for humanity than the Industrial Revolution. Product marketing, retail and communication between development teams in different places have all been thoroughly changed for good.

The next revolution though may be even more impactful, and it is already underway. That is the AI (artificial intelligence) Revolution. Just as we could order from Amazon twenty years ago, but it took a decade to a decade and a half for Amazon to become the behemoth we all knew it would become, so the AI Revolution has already started, and again over the next decade or two we know it will hugely impact human society in many ways – some good, and some potentially bad.

The question is what impact will this have on the toy business? We have some thoughts to share in a few key areas of the toy business:

  1. MANUFACTURING

Automation, and robotisation have played a part in toy production for quite some time at this point. For more on production automation you can check our Podcast interview with Michele Bovetti, an expert and consultant on this: https://playingatbusiness.libsyn.com/toy-manufacturing-trends-and-production-automation-with-michele-bovetti

AI is a different proposition though, over time, AI will be able to produce complex CAD drawings, and even tooling plans. In short, AI is going to revolutionise the way we design products and make them manufacturing ready. It will also have a big part to play on the manufacturing line – companies like BMW are already working with AI to identify faulty components, AI is also already helping to identify when machinery needs maintenance or replacement, which will lead to less down time and more efficient working.

Toy manufacturing is normally regarded as low end, as the price per unit is low & the technology in the products is normally comparatively low in most cases. Therefore, it will take time for some of the AI driven improvements to filter down to toy factories, but this is definitely on the near horizon already.

 

  1. LOGISTICS & WAREHOUSING

We’ve all seen those videos showing huge numbers of robots travelling around a vast warehouse for Amazon or other companies. Or in case you haven’t, check this out:

https://www.youtube.com/watch?v=HSA5Bq-1fU4

Needless to say, those little bots are doing the work of many people, and they don’t strike or whinge or need expensive Christmas parties, social insurance contributions and all that type of thing.  So, robots are like blue collar job takers, they have already begun to take over jobs which involve shifting things around storage facilities. But where AI comes in is at the white-collar level – as the power and capability of AI grows, so it will be able to heavily influence management/office work disciplines and tasks like predicting demand, optimising delivery routes & generally increasing efficiency.

 

  1. RETAIL

Retail is a hyper competitive space, but it is also critical to deliver efficiency in terms of stock levels, inventory management, customer footfall analysis, demand forecasting and much more. Step up another level and retail becomes about understanding shopper behaviour and experience expectations and reactions. All of these areas can be influenced and improved by AI. In fact, much of retail is driven by metrics, and AI can help with the management of existing metrics, as well as the identification of new measurements and performance criteria.

 

 

  1. MARKETING

Over the course of the last decade or so, marketing has fundamentally changed, so that instead of being driven by rough topline metrics like TVRs/GRPs, and PR campaign reach, it is now all about ROI metrics and social media impact and interaction. Data of course is the arena where computerised thinking and processing power shines. In the next decade we should reach the point where we can literally type in marketing objectives, insert key marketing materials and messages and have AI create and execute campaigns from start to finish. This is massive for the toy business due to the volume of work and resources that goes into setting up new marketing campaigns across large new product slates year after year.

 

  1. CUSTOMER SERVICE

You can already negotiate a new broadband deal with AI without necessarily realising it. You can speak to a friendly adviser at your bank and be effectively talking to a computer with a name without realising there is not a person on the other end of the line or chat box. Clearly the more sophisticated AI becomes the deeper the interaction you can have with it, and the bigger the problems it can help you solve and the greater level of service it can deliver.

 

  1. CONTENT PRODUCTION

In case you hadn’t notice, a lot of mainstream movies or TV shows tend to have quite formulaic plot lines and dialogue. The reality is that there are only so many topics and events that can happen in a movie. So, could AI go as far as being able to write full movie scripts? Perhaps they could even one day be able to fully automate production of a movie, with human actors but everything else created and controlled by AI? That reality is not unthinkable today and could be possible sooner than we think. Various experiments have been run on using AI to write movie scripts, and the reality is that if you give the computer sufficient inputs i.e. thousands of different movie scripts to analyse it can ‘create’ a fairly good movie script already. So, imagine what another few years of growth and development might deliver. The clear implication for this is cheaper content, and with content quantity exploding thanks to Netflix, Disney + and other VOD platforms, it could be that before long we are binge watching even more content due to the growing capability of AI, which in turn may take kids and families deeper into a greater number of franchises which has obvious implications for the toy business.

  1. PRODUCT DEVELOPMENT

We mentioned above how AI will be able to develop CAD drawings, but it is also conceivable that AI could be used for conceptual design for toy products. It’s hard to see how the sheer ingenuity and originality of human product originators can be replaced. But if we consider classic ‘label slap’ licensed toy products, this type of design process could be completed by AI more cheaply & quickly versus human work.

 

  1. FUNCTIONAL & ADMINISTRATIVE OFFICE WORK

It probably goes without saying that the most basic of admin work could be performed by AI. From invoicing to data entry, AI will get better and better, and more efficient at these basic tasks.

 

Overall then, AI is going to massively impact society and business over the next 10-20 years. Mostly it should increase efficiency and free up humans to do more complicated and creative work. Inevitably there are job losses ahead in some areas, but new employment opportunities will arise. One of the scariest things about being a parent in these times is that the jobs your children may do in the future might not have not been invented yet, and so it is hard to know what they should study to advance in a much changed working yet to be defined and realised.

From the perspective of the toy business, AI is already quietly revolutionising the world we work in. Some of the changes will be soft edged as they will involve more efficient solutions and systems versus what we already have, but some will really change our business. Needless to say, like all technology not everything works all of the time, so the process of upgrading new technology and ironing out initial flaws, mistakes and frankly screw ups will take some time, but that process of continuous improvement cuts right to the heart of what AI is all about – machine learning.

Truth be told, it is hard to fully anticipate all that is going to change, but we can surely take reassurance from the one timeless perennial factor that has yet to disappear – children love, want and need toys for so many reasons. Electronic and technology based toys have bene part of the business for a long time, and some play experiences are going to change as technological development advances at a growing pace, but if you watch a child play with a traditional toy, you can see why the fundamental drivers for the appeal of toys is not going to change in a hurry, but nearly every other element and function of how our busines works may be affected in the next ten to twenty years – looks like even more exciting times ahead!

 

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

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