Preschool market less risky for retailers

How do you market a product to an audience who can barely walk, talk and eat with a fork? Until recently, retailers approached the preschool market with caution because children under the age of four were considered difficult to reach through...
July 1, 1998

How do you market a product to an audience who can barely walk, talk and eat with a fork? Until recently, retailers approached the preschool market with caution because children under the age of four were considered difficult to reach through traditional advertising avenues. Unlike their older siblings, they are not as likely to be influenced by peers, movies or television. But the attitude towards the preschool market has changed as buyers are discovering that selling products for preschoolers has become less risky. A slew of licensed products for this demographic have made it into a market with high growth potential.

‘The preschool market is most definitely on the increase,’ says David Niggli, executive vice president of merchandising for FAO Schwarz in New York. This growth, he says, can be attributed to ‘the [rising] number of licensed products that are available for that age group and [the fact] that parents are more likely to buy something they recognize,’ instead of an unknown property.

Disney Channel, Cartoon Network and Nickelodeon provide launching pads from which properties can be introduced to parents and kids. Because licensees know that programs on these channels are scheduled to air for a given period of time, they have the opportunity to develop long-term marketing plans that include preschool items. The Rugrats TV series, for example, contains dialogue and plots that appeal to children over the age of four, but the licensed apparel and toys, such as the colorful Rugrats dolls, also target a younger demographic, but one that will become the show’s audience in time.

‘There used to be a fear of marketing too young because the audience might not be a reliable one,’ says Nancy Overfield-Delmar, a retail and licensing consultant who is currently working with Parachute Properties on its Goosebumps line. ‘But now, the industry realizes that young children are less likely to lose interest in a toy at the rate that older children do and every year, there is a new preschool audience. This is appealing to retailers.’

Retailers are also banking on preschoolers being influenced by older siblings who are familiar with certain properties. Goosebumps, a property spawned from a series of suspenseful preteen novels, has lent its image to products aimed at eight- to 14-year-olds. Goosebumps clothing for three- to six-year-olds is also in stores because, according to Overfield-Delmar, even though these children are not yet at the reading level of the books, they are still influenced by the property.

In the last decade, properties like Barney and Sesame Street have not targeted specific genders, so retailers have felt less of a risk carrying licensed products based on these properties since they do not need to stock separate lines for preschool boys and girls. ‘Bedding is one area where this is the case,’ says Nell Roney, vice president of licensing and marketing at The Bibb Company, an Atlanta, Georgia-based home textiles manufacturer. ‘Barney sheets, clothes or plush dolls suit both boys and girls, which make the products attractive to retailers.’

Another reason licensed preschool products are doing well may be that parents are familiar with the world of licensed properties. They grew up at a time when Star Wars bedding, plush Sesame Street and Disney characters (not to mention superhero lunchboxes) were common department store finds. And when choosing which licensed products to buy, parents are more likely to purchase items based on properties that they have a sentimental connection with.

Classic characters greatly reduce the risk for retailers, says Gary Caplan, president of Gary Caplan Inc., a Studio City, California-based consulting firm specializing in licensed consumer products. For preschoolers, the risk of using a classic character is smaller because this demographic is less likely to be quickly turned on to the next big thing.

‘Big Bird and Winnie the Pooh are considered low risk because you know parents will buy them, while you really have to [work to] sell new characters,’ he says. ‘Older kids always want something new and will tell mom and dad what’s out there, but parents first have to be informed and then convinced about something new before giving it to their two-year-old.’

Highly publicized launches, in-store placement and flyer advertisements are vital to the success of any new property, and this is certainly the case for preschool-age products.

‘One way we’ve worked to attract parents [of preschoolers] is by promoting our stores as a destination for licensed properties,’ says Laura Pope, a spokesperson for Wal-Mart stores. ‘Through in-store placements and advertisements, we’ve become known as a place to buy the classic and the latest properties.’

Caplan, however, believes that the success of any preschool property starts with manufacturers. The combination of licensed names and innovative toys in recent years, such as Tyco Preschool’s Sesame Street products, has been a breath of fresh air to retailers.

‘Tickle Me Elmo and Sing & Snore Ernie really brought parents of preschoolers back into the stores,’ he says. ‘They did use classic properties, but at the same time, if parents feel good about the item, they will buy it, even if it’s a new property.’

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