Figuring Out The Future
A cross-section of the children's entertainment industry looks 10 years ahead at the first Building Our Future Toy Conference
By Richard Gottlieb -- Playthings, 11/1/2008 12:00:00 AM
It is 2018 and 10-year-old Barack O'Brienstein has just gotten notified via his mobile communication device about a new action figure. The company that makes the product has just sent out a message to everyone on its network that a download of the new plastic toy is available.
Barack loves action figures and he knows this is a good one because one of his friends does previews for the manufacturer and has given it his seal of approval. He trusts his friends more than anyone.
Barack runs home, purchases the download via his computer and prints out the action figure from his new 3-D printer. It's cool that he can make toys in his own bedroom and, in this case, he actually prints out two; one for himself and another for his father. Barack and his father both love and collect these kinds of toys and play with them together. In fact, the two figures look exactly like Barack and his dad.
Barack and his family play with most toys together. They are currently building a castle with wooden blocks. Everybody is now playing with 'old fashioned toys' because they have made a big comeback. Barack's not sure why but his dad says it has something to do with people wanting to enjoy both the real and virtual worlds. Whatever the reason, he and his family think that playing together, whether with their mobile devices or with their three dimensional toys, is great.
The Building Our Future Conference was a real success. We had hoped that by selecting a diverse group of Toy Nation leaders, putting them around a table, and enabling them to talk to each other in a safe, collaborative environment we could produce a sense of what is coming for Toy Nation in the next five to 10 years. Well, I am pleased to say our experiment worked—and it worked well. In fact, the little story at the beginning of this article is based on some of the predictions that came from our discussions.
The process
We thought it was important that everyone feel they were on the same level. That meant that there were no speakers or “experts.” Everyone was equal and everyone was an authority based on their histories or what they currently did for a living. We reinforced this notion of equality and community by beginning the conference with a family-style dinner. By allowing attendees to serve each other and to share food together, we hoped they would similarly share ideas.
Finally, we were careful not to look for consensus. When you attempt to make everyone agree, you also make them confrontational. They want to convince instead of express. Instead, we just allowed everyone to feel that they could share whatever idea they had without worrying if someone would disagree or push back on a certain point.
The results
Did we get a clear vision of the future? Of course not! We are business people, not clairvoyants. What we did get, however, was a number of possible futures. There was in fact so much creativity that came out of the meeting that I cannot possibly sum up all of the day's thoughts in a single article.
In writing this piece, I became very aware of my subjectivity and how it would color the way I interpreted the results. I am sure that each attendee would write a somewhat different summary of what was said. This is human nature. It is my hope, however, that what they would say would not be greatly different from what I have written here.
Below is a recap of what I deem to be the most compelling predictions for the next five to 10 years. Everything here came from comments at the meeting. The “Winners” and “Losers” predictions are all mine.
With that said, here are some predictions:
Diversity within diversity
Racial identity in toys, particularly in dolls, may follow one of—and probably all three—of these tracks: Authenticity, ambiguity and avoidance. Conference members noted that as the “minority” groups are growing in numbers and influence, their sense of identity grows as well. That means that dolls and other toys that want to appeal to these groups will need to feel authentic to the communities towards which they are being marketed.
This will create some major challenges for manufacturers, designers and retailers. To be authentic may mean that not only must a doll look, for example, Hispanic, but look like a particular kind of Hispanic person. Just as in every group, not all members look the same; Cubans may have a different look than do Argentines. That would need to be recognized.
How does a mass merchandiser manage diversity within diversity? Not easily. Think about it: you'd have to plan inventory for your 1,000 store chain in such a way that the dolls look like the people who shop in each of your stores.
One way that mass merchandisers and manufacturers could handle that challenge is to avoid it all together. They could choose ambiguity rather than authenticity by selling dolls whose features are so ethnically mixed up that they look like no particular group. By looking like no one, they look like everyone.
They can also ignore it by increasing the size of their plush departments at the expense of the doll footage. There is no ethnicity when it comes to bunnies and bears (yes, I know that there are many species, but panda bears and cotton tail rabbits lack the necessary spending power to impact the market).
On the other hand, e-commerce providers will have a field day with diversity. The Internet allows retailers to market incredible variety because they don't have to inventory the product. They can just have products drop shipped to consumers.
Potential winners: E-commerce providers and plush manufacturers.
Potential losers: Big box retailers and mass-market doll manufacturers.
Games and gaming
Conference members seemed to think that there were two compelling futures: a resurgence in classic game play and a continuance of electronic gaming.
On the classic side, “Euro” or “German” games (think Settlers of Catan and Carcasone) are said to be quadrupling their sales each year. It seems that more and more board game players like the intellectual challenge these products provide.
On the electronic gaming side, we are seeing a movement in the digital entertainment community towards “serious games.” These games offer the player an experience that is enriching and educational first, entertaining second. Advocates of serious games are aggressive apostles for the development of electronic gaming that has this kind of strong content. They want to see it in libraries and schools and they are on the front lines pushing those institutions to carry such products. We may see traditional board gamers following their example and pushing for the inclusion of board games as an important part of schools' educational curriculum.
Potential winners: Specialty manufacturers, traditional retailers, libraries, educational providers, and e-commerce and catalog retailers.
Potential losers: Makers of mass-market games with little content.
Intergenerational play
Attendees seemed to see adults—particularly senior citizens—as becoming ever more important as toy consumers. Toys will not only appeal to these older groups, but many toys will attempt to attract all age groups to play together—in other words, “intergenerational play.”
Some products already do this. Nintendo's Wii, for example, is a cross-generational platform and is a hit with parents because it brings families together.
This notion challenges the concept of targeting individual children based upon simple age grading. Rather, attendees seemed to see “life stages” rather than age as the way that products will be grouped. “Life stages” are important because the products that appeal to, for example, a “sandwich generation” member (an adult who has children and parents to take care of) is going to be different than those that appeal to a single mom, a teen or a senior.
The group appeared to feel that specialty retailers (particularly toy stores), e-commerce providers and catalogers already merchandise their products by life stages. On the other hand, mass merchandisers are still marketing their toy departments primarily to children and remain heavily reliant on age grading.
Potential winners: Specialty retailers, catalogers and e-commerce providers.
Potential losers: Mass merchandisers.
New products
Moore's Echo (a variation on Moore's Law, which stipulates that the number of transistors that can be fitted on a square inch doubles every two years) states that what is cutting edge technology today will filter its way down to toys 20 years later. Based upon this concept, we should be able to know what is coming in 10 years by looking at what was cutting edge technology 10 years ago.
I took a shot at it and Googled “hot new products for 1998.” I found the winner of The Data Warehouse Institute's New Technology Caucus & Pioneering Products Shoot Out held in November of that year.
The winner was a product that had the “innovative ability to deliver personalized broadcasts … from a relational database, to several output devices including email, pager, and mobile phone. [It] alerts users to important business events via existing and emerging communication channels, only notifying users when pre-defined business conditions are met.”
It's easy enough to imagine a future toy or toy company that communicates with other children and or parents whenever something new comes out about that toy.
The group also felt that today's children are developing an expectation for toys being either interactive or Web-enabled in some fundamental way. The group felt that this will effect their toy buying decisions when they become parents.
In short, products like Webkinz are just the beginning.
Potential winners: Manufacturers with strong research and development teams.
Potential losers: Manufacturers who rely on traditional sources for their new products.
Peer-to-peer marketing
Peer-to-peer marketing will grow to become the primary influencer in how people make purchases. Children today rely on each other via their cell phones and computers to share information on what to purchase. They trust their friends now and they will do so even more as adults.
This means that bloggers, friends and other personal influencers will have great power in determining which products and brands ultimately succeed or fail. Children today look for authenticity, so bloggers and other influencers will have to be transparent on what and how they base their decisions.
Potential winners: Consumers, “authentic” influencers, PR specialists.
Potential losers: Traditional mass market advertising campaigns.
Global opportunities
Participants expect the toy industry to go from sourcing globally to selling globally. They predict that the majority of toy production could remain in China but some of it will move to places like Vietnam. They would not be surprised, however, to see some breakthroughs in how toys are produced (think 3-D publishing, electronic ink and RFID tags) that will realign the current production and logistics paradigms that today's toy business is so firmly organized around. Participants also foresee growth in global business opportunities for U.S. toy manufacturers as China and to a lesser extent India, Brazil and Russia become major retail markets for toys sourced from outside those countries' borders.
What comes next?
So, did we predict the future? Unfortunately, we won't know that until 2018.
In the meantime, it is my strong belief that more important than the eventual accuracy of our predictions is that we empowered ourselves to think of the future as something we have some control over.
As Antoine de Saint-Exupery, the famed aviator and author of The Little Prince once said: “As for the future, your task is not to foresee it, but to enable it.”
What follows are quotes on the first topic tackled by the attendees: the market for multicultural toys. A more complete version of the discussion can be found online at Playthings.com's Up Close section starting on November 10. Additional excerpts of the day's highlights will follow in future issues of Playthings.
“Last week I was with a client and we were going around looking at stores, and this client had a department that they were managing within these stores. We were trying to figure out why their business wasn't growing the way the rest of the store was growing. So we were walking around and I noticed there wasn't a lot of people in their department, but when I walked the rest of the store I noticed there were a lot of Hispanic people shopping. And so I came back to them at the end of the day and said, 'I noticed that there were a lot of Hispanic people in the store but none were in your department. How are you doing on Hispanic products?' My client said, 'Well, we don't do very well there.' And it was like a light going on: 'Well, maybe that's where you should focus.' They didn't do very well as far as manufacturing Hispanic products so they were not meeting the demands that the population that were shopping those stores demanded. And that's one of the key things here.” —John Fermann
“I think that one of the things that's really important is to continue to innovate what dolls can be, and I think there's two aspects of the multicultural theme that I would bring forth. One is that Bratz came out of nowhere in 2001 and became a billion dollar business, and some theorize that part of the appeal of Bratz was it had a multicultural look. You couldn't quite put your finger on what the ethnicity was, which was a departure from Barbie. It wasn't about appealing to a specific ethnic group. It was a multicultural proposition, and I think that is a really interesting point to make. Then the other piece of it is dolls like Carol's [Baby Abuelito] and Denise's [Dolls Like Me], where it's very focused on appealing to a specific ethnic group, and I think that also is an interesting way to think about multicultural. But I think by and large that the most important thing is that Bratz debunked the myth that Barbie was absolutely unassailable, and I think it opens up possibilities for others to really come in and create a much more innovative offering within the segment, which is so important, and I think that is going be really exciting to see. [Over the next five years] I think that there will be a lot more innovation and I think that will drive growth.” —Nancy Zwiers
“I think there's a dynamic that's going on here. I come from a country where multicultural is the culture, Canada. So we've had this issue for 20, 30 years, and I honestly believe multiculturism is here in the United States. It's just that people aren't admitting to it. We launched a doll called Baby So Real, which was a multicultural doll, and I can give you statistics about the percentage of blue-eyed blondes that were sold, the percentage of Asians, the percentage of Hispanics, the percentage of African-American. And it really blew us away in terms of the lack of separation between what was traditionally considered the U.S. doll market—the blonde, blue-eyed Barbie—and for some of these others. So I think multiculturalism is here. It's an opportunity for people who want to take advantage of it. What we need to find a way to do is to get past the buyers that are resisting the evidence, and find a way to get directly to the mom or the grandparent or whomever is willing to buy that doll.” —George Irwin
“With the Internet and with being able to sell and promote directly to the consumer, there's so much that can be done. I think we actually have to start thinking about each company selling their product to whomever wants it, and make it available to everybody that can find it, because everybody, especially now, is searching online for product. They're searching for what they want and they're able to go and buy it directly. It doesn't have to be sitting in a store for them to be able to get it if you can create it and put it out there, and not have to deal with just the gatekeepers at retail, if that's possible. At a certain point it's like the long tail theory. If you're able to provide it and if there's interest, people will find it.” —Barbara Jones
“[Barbara] segued right into my business. That's exactly what has happened to me. I offer a variety of products that people can't find in brick and mortar stores; parents are coming to me because they can't find baby gifts and toys that represent children of color in other places … As for the Bratz thing, it wasn't only the multicultural aspect that pushed Bratz. It was the hip-hop aspect. The parents who are buying Bratz are the same parents who allow their children to watch music videos, and those dolls mimic the Beyonces and the Mary J. Bliges and the J.Los of the world. That's why Bratz sells. They put their finger on hip-hop culture and said, 'How can we take J.Lo and Beyonce and whoever else, with the makeup and the clothes and the short skirts, and turn it into a doll, because these little girls are watching these videos?' and that's why it flew. More so than being multicultural it was about hip-hop. I don't think little girls, when they see Beyonce or J.Lo see a Latina or a black singer. They just see J.Lo and Beyonce.” —Denise Gary Robinson
“Multicultural is also a hot topic in Europe. Because of our history it's a sensitive topic, but there's a lot of immigration from the North African countries to all European countries, so there's a huge impact from that. But I think the more interesting point is if you talk about cultural influences, there's a lot of influence in Europe from American culture. We watch the same Hannah Montana as you do. (I don't know if that's good or not!) ... I grew up watching cartoons, but not American cartoons; I grew up watching Japanese cartoons, unaware that they were Japanese. I think some underestimate the influence of manga and anime. So, it's no longer just the American culture of influence. I think there's a large part also from Japan, and who knows what happens when Chinese culture becomes bigger internationally.” —Ronald Mannak
“Occasionally we're asked to develop animated product for smaller companies, and I remember we had a request to develop something to help children that were bed-wetters get over their anxiety about bed wetting. We were going to do a live shootbut but then there became issues of: Do we have a balanced cast? Do we have disabilities included in our cast? And so we went with an animated approach with the characters, specifically animals, because they don't really speak specifically to different ethnicities.” —Scott Traynor
“I do a lot of adoption volunteer work on the side. Oftentimes adoption stories do lean towards animals and things, so that you can kind of cover a larger gamut to try and explain, because you can't really include everybody. I also think that there is sort of a time and a place to have some toys that are more [ethnically] specific and some that are more ambiguous.
I'm Chinese-American. I remember the whole Cabbage Patch Kid phase, and I actually couldn't find a Cabbage Patch Kid that had black hair. So then we found a doll called a Cauliflower Kid. I think I was the only person who had a Cauliflower Kid, but she had black hair! I couldn't get a Cabbage Patch Kid like everyone else. My doll had slightly, I guess, 'tinted' skin—I'm not sure—but that racial ambiguity didn't matter. It was like, 'Ah, here's one that looks more like me.'
The last time I saw an Asian doll was at an adoption conference and it was like, 'Oh, I've never seen this before.' I wasn't married; I didn't have any kids and I was like, 'Oh, but I'll buy this so one day I can give this to my daughter,' thinking that was my only chance to buy it.” —Vicky Wu
“I think the schools are going to really weigh in on this. Years ago the schools never really talked about diversity, but in the last few years I know the schools in our area—and I've heard of others across the country—have 'diversity day,' where they encourage the kids to dress in ethnic costume and they bring in the food of their group and the kids study the various cultures. So I think if you have the schools promoting diversity it's going to affect our market as well.” —Mary Couzin
“I think there's also a great deal of respect for authenticity. In the libraries, talking about manga, what we see is a great deal of respect for manga that is printed the Japanese way, back to front. Kids don't want to read the Americanized versions because they feel that they're less authentic. They're less real. They haven't been treated with the respect due to the cultural aspect of those books. I don't know how that translates into the toy industry, but it is something that we are seeing within the libraries, and that a lot of the publishers have had to deal with.” —Chris Harris
“I think the issue of authenticity is really important. For us, I believed it would be a challenge because within the Hispanic community there is tremendous racial diversity. We went round and round in terms of what our model was going to look like and what connotated 'Hispanic,' for my partner, Hilda, who is Cuban-American. For her, she's a darker-skinned Hispanic, but her father was white, blonde hair, big white handlebar mustache. She said, 'I want Abuelito Pancho to look like my father.' So, with our characters a lot of what signals to Hispanics that these are authentic is the way the hair is done, the housecoat that the grandmother is wearing, the guayabera shirt that the grandfather is wearing. What we also found—because the core to our dolls is music—is that traditional Hispanic lullabies and nursery rhymes [spanned different Hispanic communities]. They hear the music and it doesn't matter what their specific Hispanic background was, whether they were Mexican or Puerto Rican or Cuban.
“I think, though, that the desire on the part of companies to create one item that's going be all things to all people is hard.” —Carol Fenster
“I guess from what I'm hearing, it really depends on who you're selling your product to. If you're selling to a child and really targeting that child, I'm sensing that whether it's a plush animal or sort of an ambiguous multicultural doll, it's not mattering quite as much—if the doll looks sort of like them, they're happy. “If you're targeting the parents and making it a parental purchase, that's where it becomes, I'm sensing, more important—where it's a specific message that 'This is an Asian-American doll,' or 'Yes, this is an Hispanic-American doll.'' —Danna Dueck
“There's something that hasn't been mentioned specifically—and that's licensing. If it's a licensed character, it probably spans ethnic lines because people see them on TV. They see them in movies. So it really doesn't matter whether it's a Japanese character. If it's a good license and it's on TV or movies, it crosses all ethnic lines.” —Fred Mills Winkler
“It's a fascinating thing that ethnicity matters to girls in this particular realm more than boys. Ultimately, what we're seeing is boys are willing to cross an ethnic barrier that girls might not, which is opposite of what I would think.”—Jeff Pinsker on dolls versus action figures
“I've been watching [multicultural toys] come on for almost my entire career. I'm just surprised it took so long for the doors to blow open. People have been coming to me since the early '90s, saying 'We want a line of this. We want a line of that.' Retail never accepted it. That's biggest problem.
“I think what's so great about Uglydoll is they sort of void everything we're talking about.” —Matt Nuccio
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