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Fall 2003 The Joy of Toys

Before long, the weather will turn frosty, Santa’s elves will start pulling all-nighters, and parents will comb the malls in droves for the perfect toys to put under the tree.

As a specialty retailer, you have to have the right toys, too—the ones that keep showing up in letters to the North Pole, but that also sell well from your cart, kiosk or store. Choosing toys wisely can mean the difference between a merry-and-bright holiday and a dismal year-end.

The toy industry has remained relatively flat. Dipping slightly from $20.5 billion in sales for 2001 to $20.3 in 2002, this year has been flat to date, according to the Toy Industry Association. And projections for the fourth quarter are anybody’s guess. Maria Weiskott, editor-in-chief of the toy industry publication Playthings, points to the $400-per-child tax-refund checks, which started going out in August. “President Bush says people will put the money back into the economy.” she says. “Some people are predicting that parents will use it on… holiday gifts, so we’ll have to wait and see.”

Harold Chizick, director of marketing/communications for Spin Master, Ltd. (Toronto, ON), says, “People are always going to buy toys. It’s one of those segments that always seems to pull through. Just be conscious of the price point and choose toys with great play value, and they’ll do OK.”

Beyond the latest trends, cart and kiosk operators have to think about price points and markup. Many toy wholesalers and distributors say the average markup is about 300 percent, with higher markups on lower-priced items. Price points have to straddle the line between too high and too low. What’s the sweet spot? “I’d say $19.99. It’s affordable, but it’s high enough to generate revenue,” says Terry Giordano, regional sales manager for Forever Collectibles (East Brunswick, NJ). “Rents can be pretty substantial in malls, especially around the holidays, and I don’t know if you can get there selling $3 items.”

Show-offs

Selling toys from carts and kiosks is largely (if not totally) about demonstration. It has to look like fun. No matter how well-known or obvious, when it comes to toys, it’s nearly always a case of show-and-sell. “You can’t stick Yahtzee or Monopoly on a cart and expect it to sell,” says Dayne Sieling, president of Overbreak, LLC (Sun Valley, CA), a toy wholesaler and distributor. “Toys with activity, which can be demonstrated either passively or actively, do the best.”

This year, Overbreak is among numerous companies bringing new, exciting and easy-to-show toys to market. Their Hover Disc is a 36″ mylar disc that hovers in the air, something like a giant gentle Frisbee. It’s easy to play with, even by yourself. Supported by a national TV campaign, the Hover Disc will be in 300 malls this fall, says Sieling, but held back from retail chains. Another new product from Overbreak and also supported by TV advertising is Digi-draw. This sketching tool lets the user trace anything onto anything—for example, a photo or comic strip onto a backpack or T-shirt. “It’s so easy that it makes anyone an artist,” says Sieling. “Kids can try it right in the mall.”

Another hot demonstration toy is American Home Products’ Bungee Ball, a proven holiday plaything for kids of all ages. A soft ball is attached to a strong bungee cord with a wristband. Throw the ball and it comes back—and a demonstration draws a crowd to the cart or kiosk. And because the ball is tethered, it never gets lost.

“You want to design your cart and operate it so that you’re constantly demonstrating,” says Tim Runner, president and owner of Awesome Specialties International/ASI (Mission Viejo, CA), an importer and distributor of toys and other products. “Demonstration—flashing lights, sound effects—attracts attention. Drawing people to your cart is half the battle,” he says. “Once you get their attention, you can explain how great the toy is, and how much their kids are going to love it, to close the sale.”

Pass me the remote

For the second straight year, a demand for radio- and remote-controlled cars and other vehicles will have retailers dashing to ring up sales. “An increasing number of companies either have these toys at market or are bringing them to market this fall,” says Shannon Eis, spokesperson for the Toy Industry Association. Runner concurs: “We expect this category to be at least as hot this year, since the market was not saturated last year.”

ASI is introducing a new mini-car model, the Micro-Q, that comes with one of four sports cars or a police car and a U-shaped controller that resembles a Game Boy controller. The popularity of the RC category has led to many new vehicles. Overbreak is marketing the RC Turbo Twist, an acrobatic car whose front twists 360 degrees. And from RC Die Cast comes a line of die-cast metal cars—Corvettes, Vipers and Mini-Coopers—that are infrared-powered by pressing a watch.

“Remote control toys are very popular for carts and kiosks because they demonstrate so well,” says Runner. “Some malls allow the cars to run across the floor. If that’s not possible, you can set up racetracks or other cute displays on the cart.”

Back to the ’80s

imageDon’t look now, but the decade that brought you REO Speedwagon, Flashdance, spiral perms and The Cosby Show is making a comeback in the toy market. Just as a band might remake a golden oldie rather than risk a new tune, toy makers are relying on re-introducing some ’80s favorites in these uncertain times. “We saw how popular Spider Man and The Hulk were in the last couple of years,” says Nancy Lombardi, editor-in-chief of the trade magazine The Toy Book. “It makes retailers feel a little more comfortable when they’re already familiar with the product; and parents who were kids in the ’80s know [these] items and are making purchases based on nostalgic value.”

Hot toys in this sub-category include several popular products and themes from that era through the early ’90s. New York-based Topps Co. is reviving Garbage Pail Kids stickers depicting these comical (and some would say gross) characters engaged in various bodily functions. The updated stickers, 80 in all, include new ones like “Harry Potty.” American Greetings and its master toy licensee Bandai America, Inc. (Cypress, CA) are re-releasing Strawberry Shortcake, the freckle-faced scented doll, and her friends. On the same scale of “adorable” are the Care Bears. Reintroduced last year by Play Along, Inc. (Deerfield Beach, FL), the pastel bears with a heart are being repackaged this year. Hasbro is bringing back My Little Pony, the pink plastic pony dolls with the long (yes) ponytail and equine friends; and Micro Machines, micro-sized cars with play sets. And no longer gone and certainly not forgotten in this holiday season’s Gen-X nostalgia fest: Playmates Toys Inc. (Costa Mesa, CA) is giving new life to the Teenage Mutant Ninja Turtles. Whether their line includes TMNT lunch boxes has not been announced.

Taking up collections

imageCollectibles are a fine match for carts and kiosks “because they’re impulse items, and they’re inexpensive,” says Chizick. Cute, lovable pets—the fake kind—are in this year. NeoPets, interactive toys marketed by Thinkway Toys (Toronto, ON), are expected to be big sellers, stemming from the popularity of the web site NeoPets.com, where users create their own pets and take care of them. The pets, which light up and make sounds, can interact with each other, and make noises to respond to how their caregiver is treating them. “People take care of the pets and get immersed in them,” says Lombardi. Along the same lines, Tomy’s MicroPets, plastic, tabletop animals, have “really taken off, too,” says Weiskott. “Once you turn the toy on, it will keep moving as long as you’re talking to it. Mistreat it, and it makes a weird noise.”

Sports licensed products are always hot fourth-quarter sellers “because they’re great gifts as well as collectibles,” says Giordano of Forever Collectibles, which licenses sports products for all of the major sports leagues. “The different logos are colorful and eye-catching, and when they’re out there in the center of the mall, you can’t not look.” This year, the company’s sports Bobble Heads are hot, and 40 mall locations expanded to 145. “We find our best success comes when we market a limited quantity. It attracts instant collectibility and creates a little chase,” says Giordano. The limited run is often 500 (Bobble Heads are hand-numbered), as opposed to regular lines of 5,000. Giordano says that NFL products are the best sports sellers, in large part because of the time of year most of the sales take place.

As far as other licensed products go, “anything SpongeBob will be a big crossover collectible for both kids and adults,” says Weiskott. “Nemo [from the summer movie hit, Finding Nemo] will be big, as will some cool items that Hasbro is making from the movie Brother Bear, which will be released before the holiday season.” The licensed food activity category is suddenly very big. For instance, the McDonald’s McFlurry machine, a frosty-dessert maker for which Spin Master acquired the license, is expected to do very well this holiday season.

Stocking stuffers

imageNovelty impulse items—those fun, quirky and totally unnecessary items that you see and just have to have—do very well on carts. There are several promising entries in this category.

The new Rocket Writer by Aeromax should really take off, says Weiskott. “It’s shaped like a rocket with liquid inside, and when you turn it upside down, it looks like asteroids are dripping down.” It lights up, and “it’s great for a cart,” she says. And Lego will offer a new series of its connect-and-build pens this year, which Weiskott predicts will also do well.

What else? Slinkys, yo-yos and spinning tops are cart favorites, and the more unusual and engaging, the better. “A host of companies have come out with really cool watches for children,” says Weiskott. “There’s an extraordinary watch by the company Schylling, which is actually a conductor’s pocket watch with the Thomas the Tank Engine on it. It comes in a tin box.”

From the Great American Puzzle Factory (Norwalk, CT) come two solitaire games, Lucky Seven and Tricky Triangle. “They’re great stocking-stuffers because they’re fun and because of their price point” of $7, says Ursa Mooney, marketing coordinator. The company is also marketing Golf Qubes and Wine Qubes, puzzles made up of 12 solid wooden blocks that would appeal to golf and wine enthusiasts.

And then there’s Astrojax, the gravity-defying toy that has three balls on a string—two fixed at the ends and one that travels between the two. BodyTime Wellness, the new, exclusive marketer of Astrojax, is taking the “part yo-yo, part Hacky Sack” toy out of toy stores, where it languished on shelves, and putting it on nearly 100 carts and kiosks, where it can be demonstrated. “Toy stores weren’t the right market for it, because no one could see what it did,” says Don Brown, company president, a believer in the flexibility and possibilities of specialty retail.

Beyond Barbie

While remote-control toys will be high on boys’ wish lists, visions of fashion dolls will dance in the heads of little girls, even more than usual this year, toy industry experts say. Mattel is introducing a new line, Flavas (pronounced FLAY-vuz), to compete with MGA Entertainment’s award-winning and still hot Bratz line. “Flavas will have an urban, street-life theme, both in the fashion and the graphics on the packaging,” says Eis. “It will touch into a different market than Mattel previously targeted.” Also new from Mattel is Barbie at Swan Lake, a ballet Barbie, “which was beautifully researched and replicated to the ballet, ” says Eis.

Manhattan Toy is releasing a new line of its Groovy Girls just in time for this holiday season, which will be distributed to 9,000 specialty retailers. These soft dolls “get bigger and better every year,” says Weiskott. “Some moms call them ‘the politically correct Barbie’ because they’re culturally diverse, and don’t have breasts and waists.” Even so, “they come with really cool clothes.”

A little learning

The education/development trend continues to grow this year. “Toy makers are trying to incorporate learning and development components into their lines,” says Eis. “Toys that allow children to gain skills, such as learning the alphabet, while interacting with the toy offer a lot of value to parents. Toy makers are using the technology available to cross over into this important category.”

Leapfrog Enterprises (Emeryville, CA), whose LeapPad Learning System was the best-selling toy in specialty stores last year, is adding three new platforms to its line—Little Touch LeapPad (for age 3 and younger; sugg. retail $39.99), the handheld Leapster (pre-K through 1st grade, $79.99) and a revamped LeapPad Plus Writing (ages 4-8, $59.99), billed as a fun workbook. “The category has been growing aggressively for the last three years, and our extensive product introductions this year are a testament to that trend,” says Cherie Stewart, spokesperson for Leapfrog.

“If a toy includes an education benefit, it makes it easier to sell,” says Runner “But kids are going to rebel if it’s not fun.”

Fun is the name of the toy game, after all. Whether it’s high-tech or high-touch… hip, educational, nostalgic or any combination thereof, a toy will sell this holiday season (or any season) only if it’s well made, creative, engaging and just plain fun to play with. But it’s the retailer’s sales skills that help customers see the joy of the toy, take it home, and wrap it up.


Bernadette Starzee

Starzee, a Long Island, NY writer who covers business, sports and lifestyle topics, is a senior writer for SRR. She can be reached at .

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