Boosting The Bottom Line
Impulse & novelty toys help retailers stay afloat in a trying economy
By Karyn M. Peterson -- Gifts and Dec, 5/1/2009 12:00:00 AM
During times of prosperity, impulse and novelty toys primarily serve as a supplemental category for retailers, diversifying the merchandise mix and keeping a store’s cash-wrap area exciting, innovative and inviting. But all that has been changing, retailers and manufacturers tell Playthings. With the U.S. economic crisis in full swing and unemployment at record levels, toy retailers are increasingly relying on a more expansive selection of lower-priced items to attract customers—and to make sure they don’t leave their stores empty-handed.
Toy manufacturers that specialize in the impulse and novelty arena as well as those for which the category represents only a fraction of their overall stake in the toy business both are taking advantage of the strong demand for inexpensive items, and the category is rapidly growing to include a much wider variety of arts & crafts products, science toys, kids’ accessories, room decor, games, electronics and outdoor toys.
“[There is] no question the current economy favors lower price-point products,” Toysmith’s director of merchandising Rich Ockwell tells Playthings.
He notes, “We feel strong selling impulse items are absolutely essential to the success of specialty retailers. They deliver the fastest turns and highest margins in the smallest-selling footprint.”
Freedom of choice
The Sumner, Wash.-based specialty toy and gift manufacturer offers retailers a selection of more than 1,400 impulse and novelty toys to choose from, as well as more than 100 games, activity kits, puzzles and gizmos from its DaMert division and a variety of bubble toys and other items from its Tangent Toy division. In addition, this spring, it acquired the assets of Lolipop Kids, the Coral Springs, Fla.-based marketer of personalized gifts for children, such as Sweet-Enz hairbrushes, dotted wall letters and Name Itt! room signs.
Ockwell notes, “Impulse and novelty toys have been the heartbeat of Toysmith’s business for nearly 30 years,” and that, so far in 2009, “science 'gizmos,’ novelty magic and the new generation of hi-bounce balls have been strong performers.” Wind-up toys have also remained popular. Meanwhile, Toysmith’s most significant new product debuts this year have been science collections priced within the impulse range, including Robotic Science, Green Science, Electrical Science, Mechanical Science, Mineral Science and Crystal Growing Kits. All are geared for specialty.
Another company providing lots of choices for budget-conscious retailers is Rowley, Mass.-based Schylling Toys, which offers a range of popular under-$10 items that include Sea Monkeys, wind-up toys, rubber ducks, pocket games, activity toys, army men and other mini figures, friction vehicles, diecast, kites, balsa gliders, outdoor toys and Fantasma magic toys. The company also offers impulse-priced retro tin toys and other licensed items based on popular brands like Thomas & Friends, Curious George, Flower Fairies and Sock Monkey, and its line of Flatsy mini dolls.
Some of the company’s recent bestselling items include the Sea Monkeys and Flatsy, along with spinning tops, Thomas bathtub squirters, diecast trains, Rocket Balloons, mini Erector sets, and backyard headlamps for kids, Schylling sales and marketing coordinator Jaime Edry tells Playthings.
For Woodinville, Wash.-based manufacturer Play Visions, business has been holding steady, according to sales manager Kiley Rose. “Being an impulse novelty company with the majority of our items in the low price point range, we’re doing okay,” she says. “People are still willing to spend $5 on a toy.”
However, she also notes, “Business is tough; when our customers struggle, we struggle. We need them to stay in business to have success.” Key to creating that success, Rose says, is having a wide selection of innovative items to choose from, so stores can find what works best for their clientele.
“Keeping a fresh mix of impulse/novelty items is a key factor in the success of the specialty retailer,” Rose says. “Those companies are always trying to find the next hot item. Most of their business is driven by local children, and if they don’t have new items to offer, those kids get bored. It’s vital to keep things fresh. Moreover, keep the same kids coming back to see what’s new.”
In terms of innovation, Rose notes that the new CPSIA regulations will likely result in the slowdown of the company’s own design and development of new products; however, there may be some welcome consequences of the new testing environment that will benefit Play Visions and its retailer customers. “Our competitors are now in the same situation,” she explains. “The knock-off companies will not go through the expense to copy an item, and test it for safety without the knowledge that it will be successful. Therefore, it will take them way longer to bring in an item similar to ours, which gives our item a longer life at retail.”
At the moment, Play Visions offers hundreds of impulse and novelty toys from its main division as well as selections—like the new Bubble Oh Frog, which produces bubbles from his mouth, and the Splashy dashy Otter, a battery-operated pool/bath gliding toy—from a smaller company it acquired, Club Earth.
Rose credits the company’s ongoing success in this tough market to its recent acquisition of the zoo/aquarium toy-focused Club Earth as well as another smaller company, the plush-focused Cascade Toys.
“Our biggest growth area would definitely be attributed to diversifying our product range,” she tells Playthings. “Cascade Toy immediately put us into the plush game. Next, we bought Club Earth, and this really expanded our customer base by allowing us to have the right mix of products for zoos, aquariums and museums. These two companies combined with an already successful novelty line has really helped us gain credibility with a much bigger audience.”
Major player, minor products
Speaking of a big audience … Cleveland-based Creativity for Kids, the specialty kids’ division of art supply company Faber-Castell, is also getting deeper into the impulse action, according to company representative Lisa Brody. This year at Toy Fair, the company introduced four new Creativity Kits—Press On Nail Party, Mini Flower Frames, My Handprint and Clay Key Chains—priced below $10, a follow up to 2008’s mini kits line that were also impulse priced.
Meanwhile, Malibu-based Jakks Pacific, one of the U.S.’ largest toy manufacturers, is also eyeing the impulse/novelty category closely this year. The company is well positioned to offer lots of lower-priced items due to its extensive licensing relationships with key kids’ brands, according to Michael Rinzler, general manager of Jakks’ CDI division.
“The impulse part of our business is doing very well this year,” he says. “In this economy, it is no surprise that price points under $5 and top-branded goods such as Disney, Nickelodeon and Barbie are succeeding. We have seen good upside in this area of our business as consumers appear to be selecting less expensive alternatives [in order] to save money.”
New from the company this year in the under-$10 range are the Puffles, the penguins’ adorable pets in the virtual world of Disney’s Club Penguin, which come with a code to unlock items online; new characters in the Neopets Collector Plush line, which also come with an online code; a SpongeBob Window Buddy; the MXS Pro Stunt Rippers; mini Puppy In My Pocket & Friends and Baby In My Pocket collectibles, Pokémon figures; and Pop 'n’ Battle Pokéballs.
And anything priced at under $5 with “A” branded content is selling well, Rinzler notes.
Hot brands, distinctive styles
Another company that relies on licensed content in the impulse and novelty area is Southampton, Pa.-based Basic Fun. Its new lower-priced items for 2009 include Ben 10 character key chains; expansions to its Star Wars Saga and Clone Wars figure key chains and Stack Ems; Star Trek vehicle key chains based on the original series, ST: Next Generation, and this month’s big-screen film; a Spider-man key chain with retractable “web” (back by popular demand); and the Madballs Classic Series 3 and Sick Series 3 rubber balls licensed from AG Properties.
But licenses aren’t the only way to go to attract spontaneous sales.
For Seattle-based Accoutrements, wholesaler of toys, gifts, affordable art, and classic novelties, absurdity and randomness is actually the order of the day; the company prides itself on its distinctive styling and the innovation in its popular novelty product lines.
Some of the top selling new items this year for Accoutrements are its Fairy Eggs (tins of egg-shaped bubble gum), the electronic Yodelling Pickle, Finger Monkeys rubber puppets and the Shimmering Jewels Puffy Stickers, according to company representative Jerilyn Davidson. Also popular recently is the company’s new cupcake-themed impulse line, which includes Cupcake Dental Floss (flavored like delicious frosting), Cupcake Mints (which come in an illustrated tin), Puffy Cupcake Stickers, and Cupcake Bandages (which includes a free prize tucked inside their decorated tin.)
Chicago-based Sassafras Enterprises also creates impulse-priced kids’ products with a unique look that are license free. Its line includes animal-themed school supplies, room decor items, kids’ accessories, wooden games and activity toys. New items this year include an expanded collection of room decor (memo boards, door hangers, picture frames) and paint-your-own bird house and paint-your-own bird feeder kits. “The response to this [art kit] line has been tremendous,” Sassafras sales facilitator Chris Grzych tells Playthings. “[Those are] new and hot.”
For Midwest Seasons of Cannon Falls, creating its own look for the brand—and making sure to include lots of lower-priced offerings—have led to growing business in recent months in both the kids’ toy and gift space, according to Beth Lorentz, Midwest’s vice president of marketing.
“The impulse side of Midwest’s business is strong this year,” she tells Playthings. “[Our] novelty, low cost gift items are some of our best selling items this season. This is driven by our retail customers’ need and desire for proven winners that have high sell-through potential. Especially strong are our line of 'mini-shimmers’ and Genuine Monkeez sock monkey backpack clips and plush monkeys.”
Both product lines are priced below $5.
Lorentz encourages specialty toy retailers to stock up on these lower-priced items because of their track record already at retail. She notes, “Strong-selling impulse items help specialty retailers keep their customers coming into the store to discover new, fun, inexpensive items to purchase for their own families or as gifts, especially in a tough economy when many families are trying to stretch their dollars.” n
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