Hasbro, rivals develop new products quickly to profit from trends fueled by social media
Toy companies are mimicking the moves of fast-fashion retailers as they scramble to produce toys and games tied to the swift rise and fall of trends driven by social media.
Hasbro Inc., Mattel Inc. and other companies are rushing to collapse production times and capitalize on fast moving trends such as slime making kits and viral videos that can spawn new games and toys. The goal is to spot ideas and get products in stores in a matter of months instead of the following Christmas.
Toy companies need rapid turnaround times if they are to profit from these trends, which spike and dissipate quickly. Copycats, usually smaller manufacturers, also can quickly crowd the market.
The quest to discover more fads comes as the $27 billion U.S. toy industry experiences a slowdown. It grew by just 1% last year after rising 5% and nearly 7% in the preceding two years, according to NPD. The research firm said the 2017 growth was fueled by toys tied to “social media driven trends,” while higher-price toys and those tied to some movie properties such as “Star Wars” fell short.
Toy makers—which are convening in New York for the four-day North American International Toy Fair, which runs through Tuesday—also are coping with the bankruptcy of Toys “R” Us Inc. The retailer is closing about 20% of its stores.
When Lawrence Rosen, chairman of LaRose Industries LLC, noticed in October 2016 that sales of his Cra-ZArt glue were rising more than 50% a month at Walmart stores, he said, “We knew something was up.” Children were mixing the glue with a few household ingredients— baking soda, contact-lens solution— to make slime.
By January, Mr. Rosen, a toy-industry veteran of four decades, presented slime kits with glue and other ingredients at a toy fair. He also teamed up with Nickelodeon cable-television channel to license its name. After getting buy-in from retailers, he started making the kits at his two U.S. factories and shipped them 45 days later. He quickly sold one million units. In the first year, retail sales topped $50 million. Other slime-kit makers jumped on the trend.
In a sense, the companies are lifting from the playbooks of fast-fashion retailers such as Zara and Forever 21, which can churn out new coats in just 25 days, say analysts. Among toy companies, smaller firms can move quicker than the big players, who need to nurture established brands and develop toys to satisfy large licensing partners such as Walt Disney Co.
Mattel has carved out a team of fewer than 10 executives to develop toys that match up with larger trends in the industry. Mattel Chief Executive Margo Georgiadis said in an interview Friday that she gave the team three months and a “next to nothing” budget to create a few ideas to pitch at a January toy fair. Those items, including a plush toy, are expected to be sold later this year.
Hasbro last year established a similar team, called “Quick Strike,” hoping to turn socialmedia trends into marketable products. The maker of Monopoly and Nerf guns has come up with several games inspired by viral videos.
Fantastic Gymnastics is based on a bottle-flipping trend where children try to land water bottles upright, while Speak Out grew out of online videos where people tried to pronounce phrases with dentist's mouth guards in their mouths. The latter took just 11 weeks to develop.
“We've since expanded this approach to our broader organization,” Hasbro President John Frascotti said. “All of this is resulting in a faster, more nimble and more efficient product-to-market process.”
Until the giants catch up, small companies are having their day. MGA Entertainment Inc.'s hit toy last holiday season, L.O.L. Surprise!, a ball that children unwrap to reveal small dolls and accessories inside, took just 18 weeks to hit stores. An item from that line was the top-selling toy of 2017 in dollar sales, according to NPD. Just Play LLC's doll and accessories based on the teen pop star Jojo Siwa took four months to develop after the company signed a licensing deal with Nickelodeon.
The goal is to find a trend that can last beyond the initial fad. “Sometimes they're hot and in-and-out, and other times, you have great success stories,” said Charlie Emby, co-president of Just Play.
Zing, based in Portland, Ore., has three social-media coordinators whose job includes scanning for trending hashtags. In June 2016, the company noticed on social media that people in Greece were using a variation of rosary beads called beglari as a fidget toy. By mid-December, Zing's version of the product, Thumb Chucks, was in stores.
Zing also jumped on the fidget-spinner trend. While it sold quickly, Zing was left with a “decent amount of inventory,” said Josh Loerzel, Zing's vice president of sales. The episode highlights one of the risks of chasing trends: “They burn really bright,” he said, “and really short.”
BY PAUL ZIOBRO