Catch Toy Fair, Before It Fades Away

It's Toy Fair again, the week when Manhattan is overrun with toy marketers, retailers, industry analysts and costumed characters, and thousands of new toys are presented in charming displays, often with the assistance of professional actors, actresses and models.

But don't let the gaiety and crowded elevators at the Toy Building fool you: The industry, and with it, Toy Fair, are on the verge of major upheaval. Aided by the Internet and savvy marketers' ability to micro-target consumers' wants and desires--and create and market niche brands--toy companies of all sizes will soon be able to efficiently reach kids and families as never before. With the transparency and access to information which the Web offers, inevitably, lots of new, direct-to-the-consumer companies will see their fortunes rise, and niche brands will proliferate. And with thousands of mini-markets tailored to clusters of consumers, innovation in products and marketing will soar, even as some of today's mass toy brands drift into obscurity.

There is no mistaking that this is a paradigm shift for an industry that has been consolidating for years, with an emphasis on mega-brands that employ TV ads to reach the widest audience with toys that often are based on a mass-appeal TV series or motion picture.

Clearly, this strategy brought great success to those skilled at playing the brand game. Brands were built and bought and borrowed, and a few toy companies--notably Hasbro and Mattel--prospered in an environment earlier traveled by great brand portfolio marketers like Procter & Gamble.

Hasbro today has a chest full of great brand names: the Hasbro name itself, and divisional names like Milton Bradley, Parker Bros. and Playskool. Among its many world-famous trademarks, Hasbro owns such names as GI Joe, Monopoly Scrabble, Nerf, Furby and Tonka, and licenses such powerhouse properties as Pokemon, Teletubbies, Star Wars and Batman.

Likewise, Mattel, in addition to licensing Disney, Nickelodeon and Sesame Street, owns such prime brand real estate as Barbie, Fisher-Price, Barbie, American Girl, Barbie, Polly Pocket, Barbie, Power Wheels, Barbie, Matchbox, Barbie, Hot Wheels, Barbie, Tyco and--did I forget?--Barbie.

Yet the wheels have begun to come off the bus. Even with unarguably the best brand names in the world of toys, both Hasbro and Mattel are in trouble with investors, and rumors abound that both--but especially Mattel--may soon be acquired.

Mass brands still matter in the toy business. One shudders to imagine the straits Hasbro and Mattel would be in without their marquee brands. But unlike the case with, say toothpaste, developing a great toy brand and then nurturing it with advertising and promotion has never been a guarantee that your customers will stay with you until the end of time. Even before the Internet and videogames grabbed kids' attention with their promise of controlling a world from an easy-to-use keyboard or panel, toys tended to enjoy only a short shelf life for an ever-changing demographic group with a short attention span. For a seven-year-old getting ready to transition out of toys and into a chat room, the end of time--as far as your toy products are concerned--comes very soon. All its MBAs notwithstanding, the toy industry has long acted more like the fashion business, with its disposability and changing whims, than like packaged goods.

Which is not to say that if you'd like to chuck your job and get back to playing with toys, now wouldn't be a good time to try it. The barriers to entry are lower than ever. For the price of airfare to Hong Kong (where from the comfort of your hotel dining room you can contract with toy factories' agents to make millions of dollars' worth of toys) and the cost of building a Web site, you, too, can be in the business. You, too, can create a brand which, if not on every child's lips, can connect with a significant audience of adults and children. If you move real fast, you, too, can exhibit at one of the last Toy Fairs before this most anachronistic of trade shows disappears. With or without you, toy Fair will soon fade away and February in New York will become a little grayer. The children, though, won't notice: They will get great new toys targeted at them, bearing brands that are not yet born.

Seth M. Siegel is co-chairman of The Beanstalk Group, N.Y., a worldwide licensing agency whose clients include Harley-Davidson, Coca-Cola, Stanley and McDonald's.

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