Submitted By: Tony_Bacala
The End of Mass Appeal Marketing in Toys
Today, I read a column by Kevin Maney of USAToday.com titled “Growing on-demand content may mean blockbuster’s end.” It speaks about the general trend in the entertainment industry where people are moving away from the broad appeal, “Blockbuster” oriented offerings for more specific, tailored content. How people are moving towards downloading a 5 minute action skit by an unknown filmmaker on the internet – to watch on their 2.5 inch video ipod screen, rather than paying 20 bucks to go see King Kong in the theater. He explains reasons why, various and many, and even backs it up with research and theoretical papers conducted at Universities.
Generally, I think this trend is real, and will continue for a while. I also think that this trend applies to more than just the entertainment industry, in particular, toys.
The toy industry is currently “battling” the entertainment industry at the moment. Video Games have all but crushed the boys-toys market, making it a secondary thought for any male child over 5. On top of this, digital devices are replacing good old-fashioned toys in the younger and female demographics as well. The toy industry is responding as it can, re-inventing old favorites with new digital play features, and offering new products that appeal to the digital-age children. A merging of these worlds even further is inevitable for the toy industry to survive. That is all fine and good, but where does that leave such mainstays from yester-year like G.I. Joe, Transformers, Barbie, He-Man, Teenage Mutant Ninja Turtles, and Power Rangers?
The offerings of these and other properties over the last 5 years have been erratic. A general bombardment of product to all retailers, both big and small, of narrow-minded and sub-par merchandise. Did these ventures make the companies profit? Possibly. I don’t have statistics, or inside information about this angle, but we have seen the downfall of numerous 3rd party manufacturers tied to the Transformers license. We have also seen the downfall of the main Masters of the Universe line by Mattel, the invasion of Brats into the Barbie market, taking more than half of the market in some areas. On the other hand, TMNT has come back and stayed pretty strong, moving stock with few shelf warmers. Transformers and G.I. Joe, from a general quick look, have performed toy wise but generally been sub-par. They have huge amount of overstock that needs to be repackaged and sold on sale 2-for-1 just to clear out old waves for the new waves to hit. This occurs to the point that the last waves in a given line go directly to discount retail chains like Odd-Lots and Value City.
I think the reason these types of properties have problems is because of the “Mass Appeal” approach the companies are taking with them. The lines are developed years before they hit the market, and designed so that they need to make 10s of thousands of each individual product in advance, and sell them, to break even. Care or thought related to the individual child, teen, or collector is not present. Yes, things like names, or an occasional color scheme reference to a classic character is there, but generally, this is just a hunk of plastic with a fancy logo. There is no connection to the key aspects of the property and history that made the line popular – with kids and adults – in the first place. This is a “we make this, you buy this” mentality. And really, the way the systems are set up, there is no choice. They designed the toy on the shelf 2 years ago. It went into production 6-8 months ago. Yet, you are just seeing it now. If you don’t like it, or the kids don’t like it, or both, then there is nothing much they can do about it. Not only that, but the next 10 toys are already in the works, and will be on that shelf in the coming months, possibly with the same mistakes and issues that made toy number 1 undesirable. Too bad. Buy it.
This was the mentality the movie and music industries had, until recently. They decided what was going to be good; they put money into it, and said, “Here it is, go buy it”. When the execs lost their nerve, or were threatened with the loss of their own jobs, they began the copycat phase, rehashing the things that worked in the past, tweaking them a bit, and repackaging it for the modern audience. This I think is what triggered the digital rebellion that is forming now. And this is what the toy industry is doing with the classic properties. Half witted attempts to re-invent the circle, in turn not appealing to either the kids, teens, or adult collectors. Not to mention the adults buying for the kids, who see this and go “That’s not the XYZ I remember. Weak.” In a tighter market than ever, I think this is a poor decision.
So what needs to be done? I had written a nice long explanation on what I thought should be done to place here; however, the bottom line is this. The ideas that Hasbro have with Transformers and G.I. Joe, and even Mattel had with Masters of the Universe, are generally on point. They are just being watered down, and dumbed down, in order to appeal to the mass market, or, to conform with cost analysis and risk management recommendations coming from the front offices. And that ruins both markets. You may make the bottom line, but you are not doing all you can to maximize the long-term shelf life of the property. There will not be kids in the year 2022 paying 1000 dollars for Armada Optimus Prime on ebay with their college refund checks. And along the way, you lose the adults.
The toy industry companies need to figure a way to create smaller, niche markets, develop for them faster, and more precisely, and execute them with smaller runs. There should be 10 “Transformers” sub-lines, each done well, each have their own story, video, comic, and design teams. Each should be specific to the wants and desires of the kids/collectors that will buy it. The production runs should be small enough that there is no bottleneck in the distribution networks. They should be able to react to the market, rather than create the market. If the consumer says “I like this, but this part really irked me”, then they should be able to have that same product back on the shelves as soon as possible, “irk free.” – not 2 years later – months later.
A perfect example would be this. In 2006, Hasbro is releasing a 10th anniversary Transformers Beast Wars line. They have the show being re-run on TV via Action Blast (G4 Network). The episodes are available online at Hasbro.com. The toys are re-issues of the original toys, the ones people like, in nice fancy packaging. They have changes that actually improve the original release. Each comes with a DVD of an episode of the show. Each comes with a part of a character that couldn’t be sold by itself due to it not even being a “Transformer”, but is cool to have as a bonus when you buy the others. There is a comic related to the property coming out. There are even new toys being released of classic characters later in the year.
This is what should be done, but 5, 7, 10 times over, with fresh original figures and media, each year. Couple that with low print runs and streamlined distribution. First thing that will be said, “That’s not cost effective.” Well, make it cost effective. Pay your designers less, make them work faster, develop a show (or shows) that can be sold on DVD and support its creation, tighten up your manufacturing and distribution, internally and externally, so that it is. You are the leader; you are the market dominator. To say you can’t do something like that is lazy. The head of Transformers or G.I. Joe development may not be able to, that’s not their job. But there must be someone at Hasbro that can, or start the process. Unfortunately, those people’s job security is based on bottom line profit, and to rock the boat this way now, when the lines are still profitable in the “we make, you buy” format, would be a bad decision. For the investors, and their house payments.
Like the original article referenced above about the Entertainment Industry mentioned, it is becoming more profitable to sell a little of a lot of different things, rather than to sell a lot of a few things. People, and kids, and parents – won’t stand for anything less in this “On-Demand” era. The toy industry needs to realize this, and force change in how things are done. If that means getting the manufacturers in China to do things differently, or changing how they handle case assortments, or completely redoing their internal ordering and distribution network, than that’s what needs to be done.
Otherwise, we can expect the same old same old, until things aren’t profitable anymore, and then they are gone. Who knows if there will be a retro rebirth again 20 years down the line, the next time these things fade out, they may not come back. That’s sad for us, but a major missed opportunity for the toy industry, one they may not be able to afford in this digital-on-demand-video-game-ipod era.
This article references Kevin Maney’s featured on USA TODAY’s website here:
http://www.usatoday.com/tech/columnist/kevinmaney/2006-01-03-on-demand_x.htm
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