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Toy Industry Outlook 2011

Looking into the toy businesses' Magic 8 Ball.

 

PLAYTHINGS ASKED SEVERAL LEADING TOY MANUFACTURERS:
What are some of your predictions for your company and/or the industry in 2011?

Paul DedrickPaul Dedrick
The baby boomers are aging and that means more people looking for affordable entertainment. We see this group as creating a new demand for our party games and jigsaw puzzles.

- Paul Dedrick, president, Buffalo Games

We are planning to be out on the road a lot more in 2011, exhibiting at and attending more trade shows than in the past two years. I expect buyers will be a little less fearful of year-end overstock situations and remember a time when the hot toys sell out during the holidays, thereby prompting them to place orders earlier and plan their inventories more aggressively.

- Ted McGuire, president, Thames & Kosmos

Commerce on the Internet will continue to grow, as will its direct and indirect influence on retail.

Grant ClevelandGrant Cleveland
Web-enabled mobile applications for retail will become bigger, as will innovative online marketing methods, like Groupon. I think the $2.99-$9.99 price range will continue to make up the majority of purchases in toys. There seems to be a stretching of decision times and a compression between ordering and delivering times. We saw more late orders in 2010 than in any other year prior.

- Grant Cleveland, president, DuneCraft

During 2010, we found that the "tech-geek" market has a strong appetite for our product line. This has pushed us forward in setting our sights on the digital market in 2011. We are also planning to continue growing our consulting business, which was where we began our business in the 1990s.

-David Schreiber, president, Uncle Skunkle Toys

We expect from all indications and pre-booked orders that sales in 2011 will be

Ramona ParienteRamona Pariente
even stronger than in 2010. The economy is slowly picking up even though historically, unemployment improves more slowly. To assist in our expansion, we have increased our presence at trade shows and are involved in more social networking.

- Ramona Pariente, president, Safari

HABA is cautiously optimistic with our sales forecasts for 2011. Based upon feedback from our retailers, we've added more games and outdoor children's products with all English packaging. The fact that our wooden toys are still manufactured in Germany and that our parent company has obtained the PEFC sustainable forestry certification really show our customers that we care about the quality of our product, from the raw materials through finished product. To try to offset some of the cost increases from

Lea CullitonLea Culliton
China, we're purchasing fabric items in larger minimums directly from our HABA suppliers, instead of importing from Germany. We will continue to exhibit at the same shows, but we'll also be present at the ABC Kids Show so we can address the needs of the juvenile marketplace.

- Lea Culliton, president, HABA USA

Thirty percent of the items in our catalog are new products. We are giving retailers what we know the market is looking for: innovation, new designs and new concepts. This is the platform to guarantee success!

- Melissa Milne, key accounts manager, The Orb Factory

I believe the industry will see buying patterns continue to be pushed out later into

Melissa MilneMelissa Milne
Q4, given the soft economy. I also believe that national retailers will manage their inventories tighter than ever. We saw this within the independent specialty channel and have felt it in a small way with few key retailers in 2010.

- Darcy Morris, director, sales and marketing, SmartLab Toys

I predict that while some retail price increases are inevitable, they will not be the rule. This will then create tremendous pressure on various organizations that are not ready for the "double squeeze" on their profitability. Inevitably, this will accelerate several trends that are already in place for all to see: reduced

Marjorie IsraelMarjorie Israel
attendance at trade shows, which will lead to a consolidation of industry organizations over time; consolidation within the retailer and the manufacturer groups respectively to generate internal synergies; reduction of the level of innovation from small/startup companies that are facing ever-increasing negative odds; increased reliance on licensing to generate incremental revenues rather than real product innovation and finally, increased importance of technology both as a driver for product innovation and as a delivery mechanism.

- Etienne Veber, president, Learning Resources and Educational Insights

We predict stability and sound growth based on our steady availability of inventory, as well as the introduction of several new products that are a logical expansion to the Citiblocs line. Our exposure to the school market, thanks to our participation in the third

Jamie GallagherJamie Gallagher
annual Goddard Toy Test and our subsequent Top Five Toys Award, will hopefully enable us to penetrate the school market with significant marketing arguments and corresponding potential sales.

- Marjorie Israel Chayette, owner, CitiBlocs

The positive trend of 2010 will continue in 2011, as consumers become comfortable with spending again and a sense of stability grows. I think our business will parallel that trend and slightly exceed it. I would expect price points to rise as inflationary pressure mounts and brands continue to place a high value on delivering quality products.

- Jamie Gallagher, CEO, Faber-Castell/Creativity for Kids

What are your product predictions for the year ahead? Do you foresee any particular hot items or general trends that will impact the industry?

In the small world of science kits, I expect 2011 to be a good year for chemistry sets. 2011 is the official International Year of Chemistry as designated by major global entities like Dow, BASF, UNESCO and the like. Coincidentally, 2005 was the International Year of Physics, and our Physics Workshop Kit has been our best-selling kit since then.

- Ted McGuire, president, Thames & Kosmos

I think the area of science and nature will continue to grow and evolve as it touches activities, crafts and other traditional toy areas. I also think that novelty toys like SillyBandz will continue to be hot as they target an underserved segment of the population.

- Grant Cleveland, president, DuneCraft

David SchreiberDavid Schreiber
We believe that regardless of whether you are marketing to preschoolers, tweens, teens or the entire family, consumers will be looking for products that integrate with their existing investments (i.e. digital tablets, gaming units, smart phones). We also forecast that consumers will be looking for games and related devices that offer a social element. In markets that are already in full recovery, we should start seeing growth in customization and collectibles. If the economy recovers faster than expected, we may see growth in customized clothing lines for dolls or limited edition action figures that interact with video games.

- David Schreiber, president, Uncle Skunkle Toys

It is our position to be a trend starter with the unveiling of Phone Frenzy. With 91 percent of Americans using cell phones, we are certain the game with its creative content will appeal to a vast group of customers who are very comfortable using phones as their primary tool of communication.

- Paul Dedrick, president, Buffalo Games

Many of our customers are looking for something that not "everyone" else has. Exclusive product launches and customized items are becoming more and more popular. I think retailers this fall will be increasing the number of offers and promotions for "only available at" items.

- Melissa Milne, key accounts manager, The Orb Factory

I think price point will continue to drive consumer purchases, although I do believe parents are looking for substance with value. Therefore, topics like art and science will still be key, along with hot trends.

- Darcy Morris, director, sales and marketing, SmartLab Toys

At Toy Fair we'll be introducing our first set of toddler HABALAND blocks that contain removable people figures. As Etienne Veberthe child grows, they can incorporate these same colorful blocks into their Technics blocks and build entire villages. Later this year the retailers will be excited to see that HABA will finally be offering options in classic wooden push toys.

- Lea Culliton, president, HABA USA

I would look for two overall themes: technology - of course - and what we call the increasing importance of the "home-school" connection in a child's development. Parents are ever more involved in the education of their children. In early 2011, we are introducing more than 100 new products with real educational value,

- Etienne Veber, president, Learning Resources and Educational Insights

We will continue to expand brand recognition with variations of color and size, as well as offer new accessories that are specifically designed to accompany the sleek, urban look of our product. This logical growth of figures, as well as 3D connectors made of new materials, should be popular in 2011.

- Marjorie Israel Chayette, owner, CitiBlocs

PLAYTHINGS ASKED RETAILERS:
Will you implement any new business strategies this year?

We will continue to focus on products that are not sold into mass distribution. We will look to expand our exclusive offerings and pursue more products that are geared to specific markets, such as sports team licenses. We will

Jeanette LautureJeanette Lauture
continue to pursue strong promotional opportunities and be competitively priced on all items.

- Sharon DiMinico, Learning Express, Devens, MA

We are implementing a number of changes this year. One possibility is moving our store to a larger space. We are looking into adding Legos to our building section; we have many customers asking for them. We are also incorporating an "open to buy" strategy for purchasing at Toy Fair and other trade shows. We will increase our calendar to include different events that span different age ranges and that reach out to vendors' playdate programs.

- Jeanette Lauture, Aunt Jean's Toys & Treats, Montclair, NJ

Gwen OttenbergGwen Ottenberg
We are attempting to forecast the companies that typically run out of product and buy the pieces that are important to us early and heavily. Instead of buying 10 items, we will buy three to five and be able to give them better shelf space since space is at a premium. We are working with our staff to focus on the entire experience at the store. We are working to expand our business and there is no avenue that we won't consider. In the past, we have been successful with Bucky Balls, and the Wild Creations African Dwarf Frogs, which would be a pet store product. We recently ordered a baby bottle line and a watch line. We are not afraid to try products that make sense for us and our customers, or bring something new to the table. You never know until you try!

- Gwen Ottenberg, Imagine That Toys, Wichita, KS

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