If you listen carefully, you can hear the sound of the toy industry issuing a collective sigh: ‘Finally, a hit!’ It’s been a while (three years, in fact), but folks can finally say the words loud and proud about the Harry Potter line. Though NPDFunworld won’t release its final TRSTS data for Q4 till sometime this month, retailer consensus is that the last two months were extremely good, due largely to the success of the Potter merch, which managed to prop up what was an otherwise so-so year in toy retailing. The most recent NPDFunworld data showed overall toy sales rose 10.8% during the busy shopping month of November, compared to the same period last year.
At U.K. toy store chain Hamleys, Potter merchandise accounted for 5% of its Q4 sales, according to the chain’s chairman Simon Burke, who dubbed it ‘the biggest thing since Star Wars.’ (Presumably, he was referring to the first Star Wars movie). Similarly, Steve Benoff, a buyer for action figures, vehicles and electronics at FAO Schwarz, was also quick to heap the superlatives on the wizardly one, ranking it number one in terms of sell-through amongst movie-based lines.
Since it has become an industry ritual to play Monday Morning quarterback when a big event toy line hits–in an attempt to divine the reasons why it did or didn’t work–let’s now train the telestrator on Potter.
What lessons–if any–can toycos glean from the Harry experience? A superficial analysis would suggest that it’s time for toycos to get with a franchise–and fast. Of course, Harry Potter is not your typical franchise. Before becoming a merchandising concern, it came to the table with plenty of publishing world equity. But as the last three years have demonstrated, a strong sales pedigree in another category does not automatically guarantee boffo toy sales (see The Grinch or Star Wars: Episode I as proof). No, the credit for the Potter toy line appears to lie with the licensor and licensees. Inasmuch as we all know the reasons behind a hit toy line will forever remain a mystery (the most carefully calibrated programs are often negated by one of the market’s many intangibles), licensors and toy licensees seemed to get their end of things right for Potter. ‘Overall lines were much tighter,’ says FAO’s Benoff. ‘There was much less duplication with SKUs than you typically see for a [blockbuster] license.’
That was no fluke. After witnessing the strong (though not overwhelming) sell-through of the book-based Potter merch it released in Q4 2000, Mattel took a hard look at the movie line and cut several items that it felt failed to successfully translate the license into product. In other words, Warner Bros. and Mattel practiced restraint, ensuring that the line’s scope and content cleaved to the public appetite. And it paid off.
This less-is-more approach also led to the emergence of more interesting toys. Lego’s Hogwart’s Castle and Mattel’s Snape’s Potion Activity Set and Levitating Challenge game were all legitimately innovative products, without a whiff of label-slapping about them. So with Potter toys meeting the industry’s expectations, has the retailer’s faith in the ability of event pics to drive toy merchandise been fully restored? Not quite.
‘I think buyers are going to be cautiously optimistic about their orders for big properties,’ says FAO’s Benoff. ‘Harry Potter didn’t quite get the monkey off the industry’s back, but it is lighting the way. This year, there is some big box-office potential (in Harry Potter and the Chamber of Secrets, Lord of the Rings: The Two Towers, Spider-Man and Star Wars: Episode II–Attack of the Clones) that could, and should, by all accounts, make it’s way back to retail.’ We can only hope…