Toy and Hobby Industry Adopts New Retail Strategies for a Slow Economy: A Roundtable with TDmonthly Publisher editors
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June 2003 | Vol. II - No. 6

June 2003 | Vol. II - No. 6 TDmonthly SEARCH

Toy and Hobby Industry Adopts New Retail Strategies for a Slow Economy: A Roundtable with TDmonthly Editors.

Q: Have you noticed a strategy change in the way manufacturers are conducting business in 2003?

A: The slow economy and the consolidation of retail outlets such as K-Mart have prompted toy and hobby manufacturers to be more creative in the search for incremental profits. Popular marketing strategies being used this year include:

  • Lower Price-Points - not only for new introductions, but also for toys currently on the market
  • Non-traditional Distribution Outlets, such as music and video chains
  • Introduction of more Occasion Items: Valentine’s Day, Christmas, Easter, etc.
  • Entering New Categories to capture incremental sales
  • Reintroducing Old Favorites

Q: What price-points do you think would be ideal for impulse purchases? Any examples of new toy introductions that fall into this group?

Mr. T in Your Pocket

A: Impulse Price-Points. Catering to budget-conscious consumers in difficult economic times, manufacturers hope to cash in on impulse purchases by introducing scores of trendy products under $10.

  • Hasbro’s Hit Clips featuring music from Madonna to the Goo Goo Dolls. SRP: $3.99
  • Spinmaster's Astrojax (introduced in 1999), a three-ball juggling game. SRP: $7.99-$9.99
  • Emanation Inc.’s Mr. T in Your Pocket and Cajun in Your Pocket are good examples of unique low-price-point products that appeal to both young and old impulse buyers. SRP: $10.

Q: With chain retailers finding it increasingly difficult to capture the attention of consumers, what type of creative distribution approaches are manufacturers employing to overcome this?

A: Distribution Outlets. With the closing of many Kmart stores and the consolidation of other retail outlets, toy manufacturers are looking for nontraditional channels for their goods. For instance:

  • Using The Fast and the Furious brand, Racing Champions/Ertl plans to introduce its line to specialty retail outlets such as video and music chains.

  • Lego's Clikits
    Lego's Clikits will do promotional programs with Limited Too, a retail outlet for young girls ages 7-14. The partnership designates Clikits as the "preferred fashion design system" of the stores, providing access to Limited Too's consumer contact points as well as representation in their monthly "Catazine.”

Q: Manufacturers and retailers alike have long sought to even-out their sales throughout the year, rather than concentrate on the fourth quarter. Do you see new strategies being implemented to achieve this in 2003 and beyond?

A: Occasion Items. More than in previous years, manufacturers are introducing additional occasion items to their lines. Attempting to level out sales throughout the year, both retailers and manufactures have created alternative-purchase occasions to sell their products.

  • Ohio Art’s Etch-A-Sketch now comes in smaller versions shaped like a heart (Valentine’s day), a Christmas tree, and Easter egg.
  • Patch’s Occasion Card Games now feature games for Bridal and Baby Shower parties.
  • Halloween items. With safety concerns in mind, more parents are choosing to have in-home parties instead of trekking their kids door-to-door. Many Asian manufacturers have responded by introducing more low-priced party sets.

Q: What was the most popular category last year? Any predictions for this year?


A: New Categories. In times of economic slowdown, parents look for low-cost forms of entertainment for their kids, fueling interest in these types of toys. The Arts & Crafts category and the Puzzles & Games categories did very well last year, and the trend continues with Yu-Gi-Oh! Metal Raiders 1st Edition Blister ranking number one in sales according to NPD’s “Top Ten Best-Selling Toys Ranked on Dollars, March 2003.” The game ranked number two in units sold, and took the top spot in the licensed toys category in both dollar sales and units moved. New arts and crafts toys for 2003 include:

  • Bandai’s new Arts & Crafts items, sold under the brands B*Stylin' and B*Cookin', encourage children to explore their creativity.
  • Not to be left behind, Lego is entering the Craft category for the first time with Clikits, hoping to tap a new area of profitability.

Q: We’ve seen so many nostalgia toys in the past few years; what does 2003 have in store for us?

A: Reinventing old favorites. The retro trend continues this year with the release of many licenses made popular in the 1980s. These familiar brands are meant to excite today’s kids while appealing to the parents who fell in love with them nearly 20 years ago. Both manufacturers and retailers are banking on the established recognition factor to drive sales.

  • For girls: Care Bears, Strawberry Shortcake, My Little Pony.
  • For boys: GI Joe, Teenage Mutant Ninja Turtles, MicroMachines and Transformers.

Hollywood studios are also betting on many of these nostalgic brands. The new My Little Pony feature film will premier in October 2003, with theatre showtimes in mornings and afternoons only--a convenient time for parents and typically slow time for movie-going--creating an incentive for both parents and theatres to revisit a tried-and-true property.




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