Toy and Hobby Industry Adopts New Retail
Strategies for a Slow Economy: A Roundtable with TDmonthly Editors.
By TDmonthly Staff
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'sClikits 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?
B*Stylin'
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.
