Toys are goners!
Well, it is if you listen to all the articles being written by the self-anointed experts; again mostly analysts and the media who like to create a juicy story. As like most media, everyone figures they have the exact key to why the industry is failing and why certain companies are doing it faster than others. News flash #1: It isn’t failing! If I hear one more time that physical toys are being replaced by digital screens, I’m going to take my action figures and go home!
Why one company is failing over another has very little to do with embracing digital kids over those who aren’t. News flash #2: All kids today are digital. They were born in the generation where access to, and using a digital device is 2nd nature. Yes, there is social economics that enters into the conversation for those that have and have not, but let’s not make it all about debunking physical toys altogether. There are great toys out there, and kids still play with them, and will continue to do so providing companies get their ducks in order!
One analyst recently wrote that one of the big companies is concentrating on plastic and not characters, and they are in trouble. What? That’s the reason? Maybe there are other reasons this industry has been stuck in a rut for a long time.
Characters rock; or at least they do for toys.
Just finished up my umpteenth Licensing Show in Vegas a month ago. 90% of the exhibitors had something to offer to potential licensees. This show is rather large with attendance growing and hundreds of costumed characters being paraded around daily. A bit creepy, but there was even a Marshmallow Peep costumed character being led around the show!
In 2018 the Licensing world’s sales were $280.3 billion US dollars of which the entertainment/character sector accounted for $122.7 billion, or 43.8 percent of the total global licensing market. The toy licensing sector was down over 2017, but a lot of that was due to the TRU closing effect.
So, this show is a big deal, and licensed characters are a big deal. There were the major toycos like Mattel, Hasbro, Spin Master, all pushing their internal IP and the big entertainment folks WB, Universal, etc. shopping their newest of newest properties hopefully to be part of a child’s holiday wish list.
So, why do character brands dominate the top toys for children?
Even though expensive to rent, licensed properties have their built-in marketing with less burden on the toycos to do so. Those characters that are successful are those that connect to the child in different unique ways. Not all do however. Unfortunately, much of the product is what's called "label-slap"; doing nothing more than attaching a character to a product versus really thinking through what that character has to offer in play.
Perhaps the toy industry is in need of a change, a shake-up, a re-think. It may be time the big 3 or 4 need to step back and look at what they are, behemoth's, overextended and slaves to influences such as internal and retail margins, high studio license fees, and maybe, just maybe, over-dependent on marketing aficionados who really aren't particularly creative! Apologies to many of my marketing friends who are creative! I'm certainly biased here, but I will bet there are hundreds, if not thousands of viable product ideas at all these companies that do not see the light of day. "Too different." "How are we going to sell that?" "It doesn't fit into the marketing plan.""Those kinds of things never sold before." "Walmart doesn't like that sort of thing" and on and on and on. Most companies don't realize that the creatives really do have the insight on what is cool to play with, no matter what the age of the child. Maybe they should listen to them more often.
Unfortunately, the current state of big internal margins (needed to support the behemoth) have eaten away at the quality and playability of many toys. There's a lot of action crammed into a digital games, so you can see why a child is drawn to them. So, fight fire with fire and put more play into the product! It might cost a bit more, but you will have them asking for more.
Kids play with toys as an extension of their interests. If they are interested in a character, that’s what they want to play with. If is all about vehicles, that where they will play. Bringing digital play into their world is certainly achievable, but it has to not take away from the inherent reason the child plays; they create stories. They bond with characters, play though the character itself or they just love the coolness of a vehicle and all that it can do. They want great playthings. Is that such a hard concept?
There is a handful of new, quick to respond, toy companies popping up. Most aren't burdened with all the overhead, but they too have handcuffs on. So, what's the answer? Easier said than done, but design products that have incredible and sticky play experiences. Use characters when it really adds to the play and don't skimp on the playability. Invite the child to tell their stories with the product. Figure out a way!
The Toy Industry is not dying, but it needs some new thinking. Think different. Where have I heard that before?
News flash #3: Marshmallow Peeps might be a hard sell!