A year ago, parents readily splurged on their kids’ toys — and the industry unleashed fancy, pricey playthings.
Hasbro brought out a talking parrot for $69.99, Spinmaster a transforming robot-helicopter for $110 — and Zizzle a pinball machine, complete with lights and sound effects, for $350.
This year, parents dealing with debt, higher energy costs and housing trouble are more reserved — and are likely to opt for budget-friendly toys that lend themselves to long-lasting play, experts say. At the American International Toy Fair, which starts Sunday, manufacturers will emphasize “good play,” said Chris Byrne, an independent toy trendspotter for thetoyguy.com.
“What’s the play experience? Not just wowing kids with technology,” he said.
At the New York event — not open to the public — manufacturers will feature toys that will hit shelves later this year and may go under the Christmas tree at year’s end. Many will showcase playthings that aim to challenge kids to think, play nice with others — and leave the couch.
LeapFrog’s $49.99 Tag Reading System reads stories aloud for or along with kids as they scan it across books; Wild Planet’s Animal Scramble ($19.99-$24.99) calls out zoo animals that young kids must identify and tag to achieve the fastest combined speed or personal record if playing solo; and VTech’s $69.99 V.Motion uses a Wii-like joystick to get kids moving and schooled in science, spelling and arithmetic.
Tight purse strings
Some toys are a continuation of last year’s lavishness. Hasbro’s $179.99 robotic golden retriever does what real dogs do, even obeying commands including “give me a paw.” Fisher-Price’s $289.99 Power Wheels, which zooms up to 5 mph, transforms into a T. rex with glowing eyes and a ferocious roar. And this one takes the cake: Nikko America’s $2,700 R2D2 projects movies onto walls with its built-in DVD player, travels and turns full circle, docks iPods, plays FM radio — and speaks the language of the Star Wars character.That's an extreme case, but in general will parents spend upward of $100 on toys?
“Parents aren’t going to be happy spending $50 or more on something their kids won’t play with,” Byrne said.
The toy industry has upped the innovation recently after years of losing kid customers to digital music players and video games. Little ones are adopting technology earlier all the time — even as young as 2.
“The toy industry is certainly good at innovation — mimicking what’s hot in the rest of the world and 'kidifying' it,” said Cliff Annicelli, editor of Playthings, an industry magazine.
He means kid tech like Fisher-Price’s $54.99 Kid-Tough Digital Camera, which thanks to its rubber casing can endure drops on land and 30 minutes under water. Plugged-in playthings like Webkinz and Neopets, plush toys that also have virtual lives, are a hit with the kids and popular with parents, too, since they offer a child-friendly online hangout.
But can innovation soften the economic blow on the industry? Last year’s toy recalls threw the industry a curve ball — and helped drag down sales 2 percent to $22.1 billion. This year, toy prices are inflating due to both higher costs in energy and Chinese labor — and stricter toy safety.
“People who were going to make an impulse purchase might not now,” Annicelli said.
Safety efforts come after millions of Chinese-made toys, including Elmo, Barbie and Polly Pocket, were recalled last year mostly for lead, which is toxic if ingested by young children.
Mattel, the world’s largest toy maker, recalled more than 20 million toys alone, costing the company about $110 million.
“We are much more aware of safety,” said Neil Friedman, president of Mattel brands, in an interview. “We have stricter rules in place. I think toys will be the safest they’ve ever been.”
Maybe. Yes, manufacturers have boosted toy testing — and local governments and Congress are pursuing safety legislation. The House passed a bill that would ban lead from toys, mandate testing by independent labs and hike funding for the Consumer Product Safety Commission. The Senate has yet to do so. And that means the new federal regulations won’t apply to this year’s Christmas toys.
“Consumers are still asking ‘Is this safe?’” said Byrne, the trendspotter. “There’s some work to do with raising that consumer confidence.”
Last year’s recalls frightened a number of parents into boycotting Chinese-made toys – and started a movement to only buy American. That proved tricky, though, because 80 percent of playthings are manufactured in China. Yet some independent toy makers saw their sales tick up.
“What will be interesting to see is if companies that make toys in the U.S. can keep that spirit going,” said Annicelli of Playthings.
Same goes for eco-friendly toys, another emerging trend. They range from playthings made with sustainable wood or soy ink — to those that are one with their packaging.
While the industry giants hog the spotlight at the Toy Fair, the little guys, which may sell American-made or “green” toys, might catch their big break — and get noticed by retailers.
“This is the show where we find the little gems of our business,” said Fred Hurley, chief merchant at eToys.com.
How toys fare in a recession
And little gems might just help the industry through these tough economic times.
Historically, the business has taken comfort in knowing that parents don’t completely deny their children toys — ever. (That’s just mean.) Here’s proof: Parents even scrounged for playthings during the Great Depression in the 1930s. But the toy industry did suffer. Hundreds of toy makers went under — and others slashed profits and produced cheaper toys to survive.
“Anytime the economy gets rocky, which we’re certainly in that situation, you have to look at it and expect an impact,” said Anita Frazier, an analyst with NPD group. “How big? You don’t know.”
Must-have toys saved the industry later in the Depression: Popular cartoon characters — Superman, Popeye and Mickey Mouse — came into vogue and triggered a buying frenzy of their plush toys and action figures.
“If it’s the right thing that a mom wants for her child, we’ll overcome issues out there,” Mattel’s Friedman said in an interview.
Regardless of monetary problems, kids will continue to want the coolest toys. Parents have literally trampled over one another to snag must-haves like Elmo. Thursday, Fisher-Price announced his reincarnation, which had been kept hush-hush. Elmo Live, retailing for about $59.99, can speak, sing, play games — and bob his head, wave his arms and cross his legs. Another “it” item: Play Along’s $179.99 Hannah Montana Malibu Beach House, a dollhouse replica of that on the hit Disney show staring Miley Cyrus.
Tie-ins to movies like Speed Racer, Batman and Indiana Jones could also move toys such as Lego’s $39.99 Cruncher Block and Racer X, Mattel’s $279.95 Batmobile — and Hasbro’s $14.99 Mr. Potato Head: Tater of the Lost Ark of Indian Jones, respectively. Kids are consumers like the rest of us — and they know what’s hot and not.
“They want what their friends have,” Byrne, the trendspotter, said about kids. “You don’t want to have the cheap one.”
But parents hold the pocketbook.