What’s Wrong with the Toy Industry?

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Does it seem like the toy industry doesn’t function as smoothly or predictably as it used to?
  After reading Gerrick Johnson’s latest Toy Scout report, I have concluded that that may well be the case. 

Gerrick is the toy industry analyst for BMO Capital Markets.  His job is to anticipate the success or lack of it for publicly held toy companies.  His latest report depicts an industry whose various parts are struggling.  He points out that:

  • Movie generated toys (particularly those that promote action figures) no longer can be counted on to move the numbers they once did.  (According to Gerrick, Hasbro’s action figure sales are down 30% over the last two years).
  • Barbie, a mainstay of the toy industry, has lost 25% of last year’s shelf space allocation in Toys R Us.
  • Toys R Us is instituting a “TRU Transformation” strategy designed to reverse the struggling retailer’s fortunes.   Reasons given for the strategy by Toy R Us management are, according to Johnson: “… retailer a poor in-store experience bedeviled by slow checkouts, unorganized shelves, difficult returns, and out of stocks, margin pressure due to excessive promotional activity and poor inventory management, and lagging competitors' online and in omnichannel performance.”
  • Target’s toy business was down “high single digits” in the 4th quarter.
  •  Wal-Mart’s Entertainment business which includes toys, was down mid-single digit in February.

No, it’s not all bad news; My Little Pony is doing great; JAKKS is faring better than it has; Frozen, the Disney movie, is a big hit and there are new products on the way.  Still; what is going on?  Doesn’t it feel like the industry has been running in place for too long a time? 

Why does the toy industry feel like a person with a cold that just won’t go away?  Some thoughts on that in my next posting.

 

 

One thought

  1. “The earth has a fever” – Al Gore
    The toy industry isn’t the only one suffering from a transition that feels like something is wrong.
    There is.
    “Where there is no vision, the people perish” is an Old Testament quote, and in the world today, particularly the “first world”. we are meeting intellectually with the same boundary that Alexander the Great ran into in his mid-thirties… it is written that Alexander wept when he saw there were no worlds left to conquer, and we are in the beginning stages of an international grieving process.
    When I was a child, the promise of possibility, of hope, was alive and thriving. Kids in any classroom in America knew that if they wanted to, they could become President of the United States. Imagination was rewarded, or at least unchained. Parenting was not so much a trained response to having children as it was an obligation that brought discipline, or at least the facsimile thereof.
    I am not being nostalgic when I say the world was a far different place from what it is today.
    The condition that we are in is of our own design. We created toys that emphasized compliance, sameness, imitation, not imagination. We allowed the children to give up their own ideas of what things looked like by feeding their minds with what we believe things look like. Monsters were mollifid, weapons were nerfed,dangers defanged.
    When I was a kid, we used real hammers and saws and nails to make toys that looked like crap. But our imaginations filled in the lines, blurred the bad paint jobs and made the toys our own version of what we read in books.
    We are killing the golden goose. We want compliant kids, selfless kids, kids with matching socks. Safe kids, prissy kids, even kids who share bathrooms and are identical in most practical ways, so we can put them in the same cubes and squirrel away their “utility to society” and remove from them their “individuality and willfulness.
    There used to be an ad I thought better recognized the reality that we are missing…
    “Fat kids, skinny kids, kids who climb on rocks
    Tough kids, sissy kids, even kids with chickenpox, love…” Well, you can probably fill in the brand, but the points are these…
    1. Humanity, even with a mapped genome, is still made up of human beings across a very broad spectrum of psyche, physiognomy, and philosophy. Breeding a perfect species, removing the flaws, or medically stabilizing the next crop of us only causes ripples in the gene pool…
    2. We are, in essence, attempting to weed out the exceptional by weeding out the different. Stop making guides on HOW to build with interlinking blocks. Stop showing us what the space ships and technology is supposed to look like, tell us what possibilities haven’t been pursued yet. Give us permission to dream again.
    3. There will always be iniquities, unfairness, and evil in the world. We are human. I’m not saying to ignore the problems and focus on the good; that is just as inherently irresponsible as what we are doing… but instead of building a framework to guide play – that way leads to madness, anyway – create anchor points of reality, that the most creative, most innovative, and least bound by externally imposed limitations, our children, can play “for reals” again.
    How do we make this happen?
    1. Hold parents responsible for raising their kids. As toy and game designers, use our skills to give parents back control. I remember one of the most powerful tools in my parent’s arsenal was the lid for my interlinking building sets – the mechanized and unmechanized ones – you know which ones of which I speak. A lot of good came out of being grounded from building…
    2. Unbind teachers from responsibility for the outcome of the class in forms of testing, but do hold them accountable for failure to succeed at doing the child’s best. There are numerous tales of teachers expecting excellence, and being rewarded with high classroom performance. Carrots work far better than sticks,even metaphorically.
    Utilize the progression from toys to games to real life, rather than short-circuiting form toys to conformity. I know I have a personal investiture in growing the games marketplace, but I have seen the outcome of a generation afraid to play as adults, to play by and with the rules, and to play just for the sheer fun of it. We speak of gamification, of rendering from game play all its utility, but it is in the actual play that learning occurs… not the other way round.
    Jonathan Albin is the “Game Market Guru”, and he gets people playing games. For more information, and to join the Game Market Guru in his quest to get people playing again, visit http://www.theGameMarketGuru.com, and his Facebook Page, Jonathan Albin, the Game Market Guru.

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