Making Sense Of It All
Insights from the year's toy show season
By Richard Gottlieb -- Gifts and Dec, 4/1/2009 12:00:00 AM
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Richard Gottlieb is president of Richard Gottlieb & Associates |
Each year I attend as many toy industry events as possible in order to get a feeling for what is happening in Toy Nation. I want to know how business is being conducted, what trends are in force, and what the future looks like. In short, I want to know what makes us tick.
In February I attended the American International Toy Fair in New York. It came after stops in the past year at the Hong Kong Toy Fair, ToyCon, the Chicago Toy and Game Fair, the American Specialty Toy Retailers Association Marketplace, the Virtual Worlds Conference, the Dallas Toy Preview and the Spielwarenmesse International Toy Fair in Nuremberg. All of this while managing to put on my own Building Our Future Toy Conference in New York last fall.
My travels through Toy Nation this year have been a bit like traveling through the countryside after it has been hit by some really bad weather. A tsunami of safety problems was followed by a storm of factory closings in China and topped off with a deluge of economic instability. Power lines are down, some trees are blown over, a house lost part of its roof but everybody is cleaning up and getting life back to normal.
After completing my rounds of industry events, and in looking back over my many travels and conversations, I have come to the following conclusions:
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2009: Better than expected
2009 is going to be a rough ride, but not as rough as what was expected back in the fourth quarter of 2008. Retailers have gotten over the seizing up in buying that took place in the fourth quarter and are ready to get back to business. Manufacturers I spoke with in Nuremberg and New York told me that buyers were serious and that they had some excellent meetings. -
Buyers are buying again
Retailers have not just adjusted to the new economic reality but are looking for new and different products. But, they told me, they did not—with some notable exceptions—find them on the show floors in Nuremberg or New York. It seems that many manufacturers became alarmed by the cut backs in the fourth quarter of 2008 and decided to hold back on some of the new products they had planned for 2009. This may prove to have been a mistake as manufacturers who decided to delay new properties for 2009 to an indefinite future may lose ground while those who got innovative make some major headway. -
Paradigm changing products
There are a few companies who are being highly innovative and some new products are emerging that are going to change the way we do business. Not because of their play value but in the way they use new technology to bypass old, costly ways of doing business.
Here are three examples:
Tracksters from 10Vox Entertainment
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Tracksters could be described as Webkinz with cars. Children have their choice of 12 die-cast cars licensed from real-world cars and trucks. Each car comes with a unique code that allows the child to play the online game. Players can then race their cars, buy them, sell them and socialize. There is even a translator that allows kids who speak different languages to communicate while playing. All of that is interesting, but by now is already fairly typical of the entire class of virtual world-related playthings.
What I find powerful about Tracksters, however, is the ability it provides 10Vox Entertainment to influence store level inventories. Because each purchaser registers at the website with a unique code, 10Vox knows which cars are being purchased. Most visitors will collect multiple cars. If 10Vox sees that a particular SKU is moving slowly at retail they can announce on the website that they are awarding additional power points (you use them to soup up your car and go faster) for those who go out and purchase the slow selling cars.
Think about it: 10Vox can push slow-moving inventory without having to give markdown money or run a sale. It can increase the appeal of almost any of its products simply by decree. It's a brilliant concept, and it's potentially revolutionary as it not only cuts costs for retailers and manufacturers, but reduces the risk factor in planning product mixes.
iPix from iToys
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The best way I can describe the iPix is an iPod for children's cartoons. Designed for kids ages 3 and up, the video player is waterproof and durable. For a small fee, parents can download cartoons directly from the iPix website. The library currently includes cartoons from Nickelodeon, Kid Entertainment, Cartoon Network and other major providers. What I think is groundbreaking about this aspect of iPix is that it allows iToys to generate revenue after the sale by selling atoms. It's creating revenue and profit without creating any three dimensional products. For that matter, the company doesn't even have to create content. It's only real costs are royalties and the digital content delivery infrastructure.
Printies from Techno Source
I have written and spoken in the past on a future in which every person's home will be a factory. Children and adults will be able to produce toys from 3-D printers that will extrude an actual plastic product. This is not science fiction; the technology exists and prices for the equipment already are rapidly coming down to an affordable level.
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A company that has jumped out ahead of the market with the idea of in-home production is Techno Source. With its Printies product, all you need is a computer, an inkjet printer and Printies fabric sheets. Kids are able to download designs from the Printies website and then print out three-dimensional stuffed toys. The system bypasses much of the production process, saves on freight and materials, and promises a future in which manufacturing as we know it currently will be a thing of the past.
Optimism warranted
The bottom line of all my traveling is that—after a whole lot of air miles, some bad meals and a few strange hotel rooms—I am feeling optimistic about the future of our industry. We are not just weathering a financial and legislative storm but are building a new, better and stronger toy industry. The result is that change isn't coming. It's already here.
We would love your feedback!
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