Marketing, must-have toy crucial to retailers
By Lorrie Grant
USA Today
Toy retailers sorely need a must-have item to emerge this year to yank them from the doldrums.
Without one so far, they have resorted to big discounts to spur sales, and more cuts are likely to come in their own effort to stave off a third-consecutive year of flat sales.
They are pulling more than price cuts out of their bag of tricks, however, to draw traffic.
That includes stocking up on some nostalgic items, such as the Slinky, which is turning 60 this year — along with the leading edge of the baby boom.
It also includes attempts to stand out from rivals with exclusives. At New York's FAO Schwarz, a Hot Wheels Custom Car Factory kiosk will give kids, or gift givers, the opportunity to add special colors, designs and wheels using a touch-screen monitor by Planar Systems.
Creative marketing is critical for the holiday season that provides the toy industry about 50 percent of revenue.
Among those needing a boost is K
Also, "We are doing more in-store demos than in years past, allowing consumers to experience toys like iZ and animated dolls out of the box," says CEO Gregory Staley, who used to run rival Toys "R" Us.
A creature-like toy, iZ likes music. Twist and turn its ears for rhythms and press its belly to change the beat. Its eyes bounce to the rhythm, while its horn glows in rainbow colors to the beat. Connect an iPod and the iZ will dance to your tune. It's made by Zizzle.
But fearful that consumers will be tight-fisted in the face of high gas prices and high heating bills, toy store competition has been most intense so far in pricing.
"It could be a blood bath," Kurt Barnard, president of Barnard's Retail Consulting Group, says of the aggressive pricing.
The battle is being led by the gorilla of toy selling, No. 1 seller Wal-Mart. Its sales were hurt last year when it was less aggressive, after beating up Toys "R" Us and Target badly on price the year before. It has vowed not to make that mistake again and, among other moves, has promised to match any competitor's locally advertised price yesterday.
"We know that (customers) won't be disappointed by the value they can find at Wal-Mart," brags Chief Marketing Officer John Fleming.
But others aren't yielding: Toys "R" Us issued a $10 gift card in its mid-November circular that touted deals on everything from dolls to karaoke systems to Xboxes. Target and Kmart have plush rocking horses as low as $30. And at J.C. Penney, there's a range of scooters and riding toys from $5 to $200.
Low prices alone might not be enough to revive the toy industry. Traditional toy sales are down about 5 percent through September, even with some strong lines tied to hit films such as "Star Wars" and "Fantastic 4."
Behind the softness:
"There are more choices outside of just toys than kids may have ever had," says Anita Frazier, toy analyst at marketing data firm NPD Group. "It's been a challenging last couple of years. I don't see that changing."
