The race to toy shelves has always been just that. But what used to be a marathon of conception, research, design, testing and shipping is quickly being compressed to a sprint.
This accelerated pace has been spurred by seismic shifts in the retail landscape, like the demise of Toys “R” Us. When the industry’s preeminent big-box store began shuttering its locations in the US and multiple global markets in March, competitive retailers like Walmart and Target moved to significantly up their online game in an effort to avoid TRU’s fate.
The main focus? Getting products out fast. This is because consumer expectations range from fast, faster and right this second, a trend that’s exacerbated by kids and their notoriously short attention spans.
Target, for example, has acquired the Alabama-based same-day delivery platform Shipt. The retailer is leveraging Shipt’s technology at most of its locations in major markets, and by the end of 2019, all of Target’s key product categories will be covered by same-day delivery. These efforts come as Amazon continues to gain ground. In June, the digital retail giant expanded its same-day delivery and one-day shipping to 8,000 markets across the US.
With so much focus on speed, toymakers are feeling the pressure to condense their own timelines. But how they’ll win this race depends on a variety of factors.
Own your tech
“The world just keeps getting smaller, and speed to market is a huge variable for the toy industry,” says Richard Yanofsky, co-founder and president of Canadian toyco WowWee. “With kids, we need to be on time with pop culture trends. We need to be fast to take advantage of those swings in taste while the window is still open.”
WowWee, home of the hit animatronic toy range Fingerlings, is taking technology into its own hands in an effort to increase speed to market.
“Speed to market is physically limited by the time it takes to tool, de-bug and, on more complicated stuff where there’s electronic engineering, make sure those aspects are tested. Right now, it typically takes 75 to 90 days to tool on average,” Yanofsky says.
To cut those timelines down, WowWee creates a significant chunk of the technology that powers its interactive products. By manufacturing its own circuit boards, personality engines and sensors, for example, the company is bypassing time spent explaining their needs to a third party and the inevitable back-and-forth that exists when multiple companies partner on a single project.
However, Yanofsky says developing truly innovative toys takes time no matter how much of the tech is handled in-house.
“The type of development that sees pioneering a new product or a new concept without any point of reference is more expensive and just takes longer,” he says. “The flip side is that when you hit, you’re original and you’re alone. That’s a luxurious place to live in, if you can.”
More common, Yanofsky says, are lateral steps from a familiar starting point. For example, to add a personality engine to a plush item (think Fingerlings HUGS), the company can dig into its coffers to determine costs and timelines.
“Now, when we have an idea, we can architect it quite quickly through past references with a deep understanding of the manufacturing of the toy itself and its component parts,” he says. “But you can never be cookie-cutter for the sake of speed. All of our upcoming products have different features, from playback, to directional mics, to kiss technology. Part of the allure of Fingerlings is the fact that no two products are alike.”
For Isaac Larian, CEO of California-based toyco MGA Entertainment, the secret to increasing speed to market is eliminating unnecessary bureaucracy.
“The key for us is that we don’t have a lot of red tape,” Larian says. “I am the head of design as well as the CEO of the company, and we have small teams.”
In addition to limiting the number of employees working on any given product, Larian says he limits the number—and length—of meetings in an effort to decrease the time it takes the company to put toys into kids’ hands. In fact, he says no meeting needs to last more than 10 or 15 minutes.
“If we have a good idea, something we think will be successful, we go after it. We don’t sit back and debate it. We don’t need multiple meetings,” he says. “We take a lot of risks.”
A recent example is MGA’s Moj Moj collectibles range, which launched in April. Designed for children six and up, the line features more than 95 soft and squishy characters in blind packs, as well as a claw machine playset. The playset allows kids to win blind packs through gameplay similar to the classic arcade game, or to display their collectibles. According to Larian, it took just seven weeks to get the range to market.
MGA’s upcoming Poopsie Slime Surprise line also takes advantage of a trend—this time, poop. The range, which launched in August, features a unicorn that kids can feed and sit on a potty to create slime. The slime comes in a number of colors, and can be transformed through packets of unicorn magic that create sparkles or scents.
With other companies like Mattel and Spin Master also making a mad dash for the bathroom to take advantage of kids’ increased interest in toilet humor, Larian says the company’s speed to market is crucial to arriving on trend and not after the final flush.
He admits that moving so quickly is a risk. MGA has taken a loss in the past, Larian says, on product lines that didn’t connect with kids in the testing phase.
And even when toys do connect, there’s no guarantee the trend will last long enough for a company to launch its take. A recent cautionary tale is the fidget spinner. Last year, fidget toys and spinners were selling like hot cakes, with Hong Kong-based toymaker Zing air-freighting millions of its version—called Spinzipz—into Target, Toys “R” Us and Walmart stores in May 2017. Data from market research firm The NPD Group found that global toy sales in the first half of 2017 grew 3%, with fidget spinners driving 10% growth in the All Other Toys category. But just as quickly as they spun into the zeitgeist, fidget spinners fell out of favor.
Because trends can fade so fast, Larian says it’s important to push to increase speed to market, but that it’s also crucial to understand a company’s limitations. After all, the only thing worse than missing a trend completely is arriving just in time to put a toy on shelves that kids don’t care about anymore. “We can never become complacent,” he says.
Go big or go home
Steve Totzke, EVP and CCO of Mattel North America, says the company’s size has been an advantage as the California-based toyco has pushed to cut down on the time it takes to launch a new consumer products line.
“At Mattel we have the luxury of very large, established brands like Barbie, Hot Wheels and Fisher-Price,” Totzke says. “These are massive brands that allow us to make some bets.”
Rushing a range to market in an effort to take advantage of a trend is the kind of gamble that could make or break a smaller toymaker. Because of Mattel’s heft, the company can bet big on an untested collectibles line while taking more time on products related to its legacy brands, which can be counted on for revenue. Totzke says the company has focused much of its speed-to-market efforts on games and collectibles as a result.
Mattel’s No Thumbs Challenge Game, for example, hit the market in six months. The game—which requires players to complete a set of tasks without using their thumbs—was inspired by a series of challenges on YouTube. The toyco’s Pooparoos Surpriseroos collectibles line, meanwhile, capitalizes on the aforementioned poop trend. The range is designed for ages four and up and features squishy creatures that eat miniature food items before pooping them into a toilet. The line also takes advantage of the ongoing unboxing trend, since the collectibles and miniature food items are stored inside the toilet, blind-bag style.
“Right now, the collectibles category is lending itself to speed to market,” Totzke says.
Because collectible ranges often feature multiple series—and are easier to manufacture than high-tech products with circuit boards or accelerometers—they can quickly take advantage of flash-in-the-pan trends. And kids are responding. Recent data from The NPD Group shows that global toy industry sales grew 4% in the first half of 2018 to US$18.4 billion, and that growth was led by collectibles. The category saw sales increase 26% in Q1/Q2, accounting for 11% of dollar sales in the total toy industry.
Another advantage of Mattel’s size, Totzke says, is its ability to quickly incorporate new technology into best practices.
3D printing, for example, has allowed the toyco to move its sample-making on site. Mattel now works with a number of 3D printers, allowing the development team to move from digital design to prototype almost instantaneously. Software, too, is evolving; Totzke says providing employees with access to the best possible tools will, in perhaps even just a few months, lead to increases in speed that haven’t yet been considered.
After all, it was only a few years ago that ordering a toy online (instead of going to the store) was considered unusual. Now, recent data from the Pew Research Center found that 79% of US consumers shop online, up from just 22% in 2000. More than half of all US consumers have purchased something through their mobile phone, and 15% purchased after clicking through a link on social media. Consequently, Mattel is shifting its strategy to take advantage of the fact that the majority of consumers shop online.
“In the past, we were beholden to retailer sets,” he says. “Retailers would set their shelves once or twice a year. Now, with omnichannel, we can get a new product online immediately with any of our partners through their websites, as well as pure-play online retailers like Amazon or Alibaba.”
One area Yanofsky, Larian and Totzke all agree is off limits when it comes to increasing speed to market is quality control.
“That’s something that I’m very particular about,” Larian says. “No product can come to the market unless it’s safe for children. No amount of money is worth putting an unsafe product out there.”
Totzke agrees, pointing to Mattel’s Fisher-Price products as a range that simply requires more time. “When you’re talking about products for infants and preschoolers, when you’re talking about learning and development and childcare, those categories are insight-driven. They require consultation with parents. They’re not trend-based, and I’d say that’s a key difference.”
While there’s no speeding up quality control, Yanofsky says efficiencies can still be developed.
“Obviously, if the defective rate becomes a problem it is very repercussive to your business,” Yanofsky says. “We’ve seen big recalls from larger companies. And, especially as the consumer gets younger, quality issues become more severe. The younger the kid, the more onus there is on the manufacturer to make sure things are safe and that the product itself is void of defect. What we do to combat that, when we’re looking to be quick, is that we don’t leave it up to a third party.”
WowWee has its own quality control department, Yanofsky says, and those employees
are able to physically visit the premises of any manufacturers partnering with the toyco. Because WowWee has team members sitting in the factory watching production, any concerns about quality control can be immediately addressed.
“It’s a great thing to be more efficient and to be faster, but with every asset comes a liability. In the case of the toy industry trying to increase speed to market, quick product development becomes more challenging on quality control issues,” Yanofsky says. He argues that companies looking to increase speed to market must also adjust their approach to quality control to account for those challenges. “The benefits of speed to market outweigh the potential liabilities.”
Get into print
3D printing is a catchall term for various additive manufacturing processes that, under computer control, join or solidify materials to create a three-dimensional object. Additive manufacturing sees objects created by building up materials—like ABS plastic (which is used in LEGO bricks) or PLA filament—layer by layer
Early additive manufacturing equipment was developed in the 1980s, but things really got moving when the fused deposition modeling (FDM) printing process patents expired in 2009. Then, in 2013, NASA employees Samantha Snabes and Matthew Fielder created a prototype for an affordable, large-format 3D printer.
The 2014 report from Colorado-based consulting firm Wohlers Associates projected the global 3D printing industry would grow nearly 600% to US$21 billion in 2020. In 2015, Mattel launched a series of apps that would allow kids to design their own toys to be produced via 3D printing. Australia’s Moose Toys took on the trend in 2016 with its Qixels 3D Maker, which creates pixelated designs using layered water-bonding technology.
This year’s annual Wohlers Report shows that the 3D printing industry grew 21% to US$7.3 billion, with everyone from medical professionals to toymakers taking advantage of the technology.