Best Toys of next Christmas?
NEW YORK — It's Goldilocks time for the nation's toy merchants: Not too pricey, but not too cheap. Innovative, but still fun to play with.
For the thousands of retail buyers at the nation's largest toy fair this week, the challenge is to find toys that are just right — and will stay that way by the time the holiday season rolls around.
Barbie, Beanie Babies and last year's breakout toy Zhu-Zhu Pets are here, featuring new looks or new gimmicks. Monopoly, which turns 75 this year, is celebrating with a new circular board and credit cards.
And on the hot list? An iPod-like electronic toy for preschoolers called the iXL from Fisher-Price.
Every winter, retailers are tasked with the notoriously difficult job of predicting consumer spending patterns months in advance as they look for the hottest toys for the all-important holiday season. Merchants of all kinds face the dilemma of figuring out what shoppers will want months down the line — apparel buyers, for instance, are also in New York this week for Fashion Week — but the toy industry is unique in that a disproportionate percentage of its sales (about 40 percent) come during the final two months of the year.
This year, after a good-but-not-great Christmas for the industry and with shoppers still spending frugally, toy buyers at the American International Toy Fair said they were anticipating another cutthroat holiday season.
"The objective is to not have the most inventory, but the right inventory," said Jerry Storch, chief executive of Toys R Us. "What we're trying to do now is understand what products we like most and where to place our bets."
So despite being surrounded by the latest action figures, Barbie dolls and stuffed animals, many attendees said they were exercising more caution in ordering products.
"You're always guessing, and you're guessing eight months out," said Eddie Moore, a site editor and buyer for amazon.com. "You're looking for 'that,' and you don't know what 'that' is. ... In an economic downturn, it's definitely more of a challenge."
With more than 32,000 attendees, 1,200 exhibitors and 100,000 toys, the four-day event is one of the world's largest trade shows for the industry. Toy makers large and small preview their 2010 product line and take orders from retail buyers in preparation for the holiday season, which accounts for 40 percent of annual toy sales.
Industry watchers say they expect slightly better spending on toys this year but doubt there will be a huge resurgence. U.S. retail sales of toys totaled $21.47 billion in 2009, a decline of less than 1 percent compared with $21.65 billion in 2008, according to market research firm NPD Group.
"The trend in 2010 is going to be on value, but I think we're going to see a little more willingness to spend than we did last year," said Sean McGowan, a toy analyst at Needham & Co. "Caution will still be the guiding principle."
So buyers said they were examining and testing toys more carefully before placing orders, with many planning to stick to safe bets such as big-name toy brands, electronics and classic games.
"Because of the way that the economy's been the last year, I don't want to be holding on to inventory I can't sell," said Scott Fisher, owner of two kite shops in Franklin, Wis. "It's more like back to the basics."
Gary Marx, a sales representative at toy maker Daron Worldwide Inc., said the company had noticed a recent shift in consumers' preference for toys for the whole family.
"Instead of a family of four going out for a movie and dinner for $60 or $70, now they order in a pizza and build a puzzle for a few hours," Marx said, adding that although the company's 3-D puzzles were selling well, he had received no orders for an executive series Air Force One model airplane that retails for more than $300.
But analysts say it's not as easy as making and selling ultracheap toys. McGowan noted that even though retailers rolled out shelves of low-priced playthings last holiday season, many didn't sell well.
"A toy under five dollars has a greater potential to be a waste of money in a time when kids are looking for more sophisticated toys," he said. "A toy under five dollars is a party favor."
Savvy kids are still looking for creativity and newness in the market, he said, so retailers have to find the right intersection of product innovation and value.
One of the products creating the most buzz at the fair was the iXL, the portable electronic device for preschoolers. It features six applications including a game player, art studio and story book. The toy, made by Mattel Inc.'s Fisher-Price division, is scheduled to be released in July for $79.99.
"We understand that families around the globe continue to keep a close eye on discretionary spending, choosing carefully the products they purchase," said Neil Friedman, president of Mattel Brands. He added that this year, the company "packs more innovation across a range of price points."
Other hot toys expanded on classic brands, such as Barbie Video Girl, which features a live video camera in Barbie's chest that broadcasts footage to a screen on her back; an expanded line of last year's breakout toy, Zhu Zhu Pets, and eight new characters to the Ugly Dolls brand; and updated versions of classic games such as Monopoly and Twister.
The economic downturn didn't stop Little Kids Inc. from rolling out its largest number of new products ever this year, President Jim Engle said. The Seekonk, Mass., toy maker's products include no-spill bubbles, a cookie maker and indoor sports sets.
"If you can't come up with new, exciting stuff, there's no reason for a company like us," he said. "We think it's a risk to not do new products. If you just stand back, you're going to be overrun."