from Toyland



The toy industry is grappling with big changes. Toys “R” Us will close all 800 of its U.S. stores after 70 years of business, falling victim to the dominance of Walmart, Target and Amazon. Global toy sales have risen every year in the last decade, but at a slower rate than video game sales. Children’s television networks continue to suffer poor ratings, while “unboxing” videos on YouTube are more popular than ever. Social media campaigns are now more effective than TV commercials in familiarizing children with new brands. Apparent consequences of these changes are cheaper toys and shorter-lasting fads.

A rapidly changing retail landscape demands innovative strategies of toymakers and brick-and-mortar retailers. Here it’s worth examining WowWee and MGA Entertainment, two toy companies that use the changing economy to their advantage. WowWee’s Fingerlings and MGA Entertainment’s L.O.L. Surprise! dolls are big sellers in the era of YouTube, Instagram and Snapchat.

WowWee brand manager Sydney Wiseman spends hours on the internet everyday looking for potentially viral content that might interest consumers. That’s how she stumbled upon a popular Facebook photo of a tiny monkey hanging onto someone’s hand. Eighteen months and many sketches later, her team developed the Fingerling, a robotic toy modeled after the pygmy marmoset. The Fingerling, which retails for $15, hugs the user’s finger and reacts to stimuli like clapping and stroking with programmed sounds and animations. By the end of October 2017, one Fingerling was being bought every minute on eBay, and this success is due to WowWee’s engagement with social media. They effectively used millions of internet users as a giant focus group. Instead of traditional TV advertising, the company paid key influencers and content creators on YouTube to promote their products.

MGA Entertainment is another company that has leveraged digital media. The Bratz doll maker designed a new line of products informed by the “unboxing” online video trend. The L.O.L. Surprise! dolls are packaged in round, shiny plastic cases filled with individually wrapped accessories. Consumers must peel away layers of packaging and unwrap each knickknack to reveal what’s inside. MGA CEO Isaac Larian has sold more than 25 million dolls since first going on sale in December 2016. The success of L.O.L. Surprise! dolls relies on consumers documenting and sharing their purchases on social media, thus making the product more widely known in an organic and inexpensive way.

The popularity of these social media-driven collectibles is not unlike the popularity of Beanie Babies, Cabbage Patch Kids, ZhuZhu Pets, Tickle Me Elmo dolls or Furbies, but the methods MGA Entertainment and WowWee used to market their products are novel. These companies adapted to shifting consumer trends and embraced social media. If companies like Mattel and Hasbro want to maintain their status as titans of the toy aisle, they too will need to engage with young consumers in digital spaces. Failure to do so will result in losing sales to upstarts like Hashtag Collectibles, a Brooklyn-based creator of internet-inspired plush toys, puppets and figurines. Artists at Hashtag Collectibles readily admit to “spending way too much time on the internet.”

Toys “R” Us may be closing, but this speaks more to stubborn corporate practices than lack of interest in toys. The retailer recently rejected MGA Entertainment’s $890 million offer to purchase many of the existing stores in the U.S. and Canada. The success of innovative companies like WowWee, MGA Entertainment, and Hashtag Collectibles shows that parents are still willing to hunt down trendy toys for their children. Companies that follow and engage with young consumers in digital spaces are most likely to succeed.

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