Creating the Toy Experience

Unlike most packaged goods, toys are designed to create a memorable experience that lasts long after the product passes over the checkout scanner and lands in a happy child's toy box. For toy manufacturers, the challenge is evoking that experience in a way that will resonate with both the young consumer and the gatekeeper/shopper -- mom, dad, grandma, grandpa -- who is wielding the wallet that day.That challenge is compounded, marketers say, as toy sales have been battered by the recession, although not quite as much as some other categories. Sales in the first half of 2010 -- $7.77 billion -- were stable compared to 2009, according to a report from NPD Group.As some shoppers are trading down to lower price points, "Retailers are cutting their investment in higher-priced products to minimize their own risk," says Martin Hitch, president of Bossa Nova Robotics LLC in Pittsburgh. "So that choice often is made for consumers. They may [decide to trade down] anyway, but the first step in that chain is the retailer."Some manufacturers have introduced reduced-feature toys to provide lower price points to keep customers buying. Many note that $100 is the divider under which they try to stay."The economy has had a huge impact on everything right now," says Ben Jamesson, director of customer marketing at Fisher-Price in East Aurora, N.Y. "Customers want value, but that doesn't mean it's only about the lowest price. Innovation is still very important in toys and baby gear. The key is how to convey your product's value in a more difficult economy."Adds Dave Henderson, senior director of customer strategic marketing at Hasbro in Pawtucket, R.I., "Today, the consumer must see the value that you're offering." Shoppers define that through price, brand and franchise, he says. "Communicating play value is critical on-shelf."Moving shoppers to the purchase decision requires convincing them that the toy will provide a long-lasting experience, explains Michael Araten, president of K'Nex Brands in Hatfield, Pa. "It's the new normal," he says. "Parents are concerned about experiences more than 'stuff' in today's economy. They'll hold off on buying a new suit to take their kids on vacation, because that will create great memories."Who is the Toy Shopper?K'Nex, Araten says, tries to meet the needs of five customers: parents, grandparents, kids, teachers and retailers. "We have to determine what's most meaningful for each and what problems our products solve for them."Each audience has specific needs, notes Bossa Nova's Hitch. "Kids want to know features, but parents want to know benefits," he sums up. "There are different ways to approach those needs. Kids are heavily influenced by the media, by their friends and by trying out toys, whereas parents do more research and tend to rely on independent reviews." Bossa Nova supplies free products to key independent reviewers in an effort to influence blog-reading parents with their product reviews.The preschool market offers a unique challenge, notes Hasbro's Henderson, as its users have little input. "Kids begin to embrace brands and have favorites to influence the decision when they're about three years old," he says.Fisher-Price knows that challenge, too. "The prenatal mom is a different audience and requires different display materials," Jamesson says. "The same is true for moms of infants, preschoolers and older children. At the older ages, you also have to see the toys through the eyes of the child to accomplish some of the communication goals."Toy companies are conducting more research, especially focus groups, to ensure that they understand these nuances. "Mattel is conducting more 'mom talks' to understand the shopper," says Dean Rinicella, president of Darko Inc., Twinsburg, Ohio, which produces displays for Mattel. "There definitely is more research being done on our end and with our clients."Interactive display units have proliferated in toy departments in recent years and their LCD screens can provide significant in-store data by tracking touches, he points out. Such units keep track of how many times each button is pushed to see which areas consumers are most interested in and which aren't getting any attention. Darko also is doing more research after every campaign, looking at sales data and display activity to determine what didn't work in an effort to improve the next rollout."There's a lot more effort on the back end to gain customer insights and understand how the display affected sales," Rinicella says. "We want to learn how they really worked and what segments were most impacted."Creating PartnershipsMany companies are adding "play value" by integrating their toys with their online messages and with retailers' websites. "The Internet is a much bigger player now," says Daryl Finley, senior manager of visual merchandising at El Segundo, Calif.-based Mattel. "Consumers are going to the web to become more educated on brands, and boys and girls are using it as an entry point for brands. It helps build a connection and definitely helps drive them to the store, where they make a final decision."K'Nex creates online videos for each of its products. "About 75% of our customers do online research," says Araten. "We can add an unlimited number of videos there to showcase the products." His merchandising for Walmart begins at the retailer's site. The company also ties into online fan groups for key toy franchises, such as NASCAR.When it comes to the store itself, Mattel has begun "a new direction of being strategic with each retailer in how we implement programs," says Finley. "We won't use the same display for each account if it doesn't match their strategic direction. It's more time consuming, but it differentiates the retailers and helps us better define how we fit into their business models."An example is an interactive racing display for Hot Wheels cars placed in 1,250 Target stores in September. The game, only 3 inches wide, was designed as a blade sign, with two Hot Wheels cars in chutes with plungers that shoot the cars through a raceway, triggering lights and sounds. Displays are placed at each end of the 4-foot space, with pegged product in between. "It was designed specifically for the space and creates an engaging display that increases dwell time," says Finley.Hasbro, too, is collaborating more actively with individual retailers, says Henderson. "The goal is to integrate and build programs that enhance the consumer's experience with our brands on-shelf and at home." The company leveraged shoppers' desire for value by tying into a recent Walmart program with the tag, "Walmart Family Moments." Featured in more than 3,600 U.S. locations beginning in September 2009, the section combines elements for a family night, including Hasbro board games, Pepsi beverages and Frito-Lay snacks. The program was highlighted in print advertising, national TV, on the Walmart Smart Network and online, and it continues today.The key, Henderson says, is to communicate with the consumer in "a complete 360-degree model." That includes the "moment of truth" when shoppers stand before the product at the shelf. "If we don't understand each retailer's shoppers and what drives them, we cannot close the loop," he says. "It is our team's responsibility to close the loop.""Our goal is to work with retailers to integrate the web and in-store experiences and make sure we're sending the same message," says K'Nex's Araten. "Two years ago, those were separate worlds for most retailers, but now they realize they have to coordinate their efforts." Online toy options also help expand the catalog and visibility of higher-end toys that may be cut from the store inventory.RobotGalaxy, a New York-based store where kids can build their own robot toys, has focused on creating partnerships in any format that works. It began in 2007 via two company-owned, 2,000-square-foot mall stores, and then adapted its merchandising program to produce a 500-square-foot store-within-a-store in the Times Square Toys "R" Us. Now, it is looking to add lockable, refrigerator-sized kiosks inside retail shops that offer kids' birthday parties."We are looking at every avenue to partner with retailers to be more efficient and merchandise in small spaces," says Oliver Mitchell, founder and chairman. "When you're a toy company without a movie franchise, it can be a challenging position. So we're looking for ways to adapt to find locations." (For more on RobotGalaxy, see the sidebar).Interactivity is KeyOne key way marketers are ramping up in-store needs is through interactive displays. "Shoppers today are really reacting to interactive displays, and their importance has grown," says Tom McClure, director of marketing at VTech Electronics in Arlington Heights, Ill. "We've been doing them for years, and today, especially with new products, we're doing even more. Retailers are realizing that they are not just a useful tool but that shoppers almost expect them, at least for electronic toys."Lowered costs for components and the need to explain more features, especially with electronic toys, have encouraged their use, he says. "They have proven effective. It's a huge benefit when you can get the shopper to stop and be engaged with the product in the aisle."Mattel has taken this approach with the Hot Wheels display as well as an interactive display showcase for Disney Princess dresses for dolls and girls. Selecting a dress triggers the playing of that Princess's theme music, with lights showcasing the dress. "It's an all-encompassing experience for the girl and suggests to Mom that she can offer this experience to her daughter," Finley says. "They both need to see it and take part. How do you communicate all of that experience if the product is in a closed box on the bottom shelf?"Fisher-Price's Jamesson agrees. "Some retailers were hesitant to take shelf space away from products, but we're seeing that change because they want a more interactive and fun environment," he says. "We love that. We think we have a lot of innovative and fun products, and we love to show them off through P-O-P, signage and other merchandising vehicles."Fisher-Price has received good reviews for its interactive Imaginext Bigfoot the Monster display. "It allows us to showcase key features and the excitement of the toy, which may not come through as strongly on the packaging or on TV as it does in person," Jamesson says. "Creating hands-on experiences for the child is very effective. Retailers like those types of displays because they can drive traffic to the aisle."Darko Inc. also sees interactive displays that feature either moving parts or an LCD screen growing in popularity. Dan Rinicella Jr., vice president, says, "Toys 'R' Us has always encouraged these displays, and now Walmart is doing more. Even Target is doing a lot, and that's uncommon."Packaging Opens UpIncreasing interactivity has also brought packaging changes. "Open packaging and 'try-me' options create a form of P-O-P for the product," says Fisher-Price's Jamesson. "They let us communicate features in a fun and simple way."VTech's McClure agrees: "Packaging is very important, because the reality is that few shoppers come into the store knowing what they're going to buy. They've been exposed to the products, and the packaging has to reinforce that awareness."On-package messaging is being tightened to increase impact. "We've been disappointed with packaging in the toy aisle because it's always cluttered," says Bossa Nova's Hitch. The company has cleaned up its packaging copy to focus on three core messages for each product. Mattel also is condensing packaging copy. "We don't want to overwhelm the shopper, and it's easy to do," says Finley. "A lot of communication needs to happen, but you have to retain your brand integrity. We want to ensure that our merchandising can tell the story beyond the Hot Wheels 2-inch-by-3-inch blister card."Brands are also adding sustainable design concepts to reduce packaging waste. At K'Nex, race-car packages are designed to be reused as ramps, with stickers hiding copy. At Hasbro, ties that restrain toys in packages are being switched from wire to rattan to make them more sustainable.Placing scannable tags read by smartphones onto packaging will be the next step, Araten says. Many shoppers already are using their phones for product reviews, pricing comparisons and even digital coupons. Fisher-Price's Jamesson agrees. "I think we're at the beginning of that technology now, but it will surely impact more and more programs going forward."

Creating the Toy Experience

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