Building toward tomorrow

If a child were in a room with only one toy, Brio President Peter Reynolds hopes it is a set of wooden building blocks. "They're so versatile," he explains. A key to growth in the category, he says, is "letting parents know this is an important part of development. Children are getting older younger, and we need to keep them playing." Citing the Wright anecdote, he adds, "we need more scientists and technical people in our society."

"People are looking for classics, not something that will be passé in a few months," says Lego spokesman Michael McNally. Rokenbok founder and CEO Paul Eichen is reservedly optimistic. "High quality and educational toy systems will suffer less overall than other folks might," he says. His hopes are buoyed by the fact that, while his 4-year-old business is growing, sales of starter sets make up a smaller percentage of receipts. "In our first year, in 1997, 80 percent of sales were starter sets. Now it's a third," he explains, suggesting that customers are sticking with the product as they get older.

With so much talk of classics, however, the debut of Bionicle has given Lego an early home run by combining action figure play with a quick build system. These mystical warriors from the Lego Technic line are not without precedent, however. Lego's Robo Riders and Throwbots are its true progenitors. Like Bionicle, Robo Riders featured similar packaging and character-driven storyline (motorcycle-style bots combat an Internet virus). Designed for ages 8 and up, Lego found most purchasers were over 10. In its studios, the company developed a story and characters to target tween boys (with a sweet spot at the 10-year-olds). "Usually," McNally says, "you can spend several hours building a set before you can play with it. Bionicle is for kids on the go." Post-build play is an important facet of the line. So, too, are the characters. Bionicle, as well as Lego's efforts in snagging key licenses, is a clear manifestation of the company's recent evolution from a construction toy company to a family entertainment company. And Bionicle has only just begun its multi-channel launch. DC Comics is inking a three-part comic book and Upper Deck is partnering with the Danish bricklayer to press a trading card game.

Although building blocks foster such a fundamental play pattern, boys comprise much of the products' audience. Social expectations for the genders hold significant sway over consumer dollars. If the gift-buyer, be it parent or grandparent, thinks it's only for boys, only boys will receive it. There is a parity with so-called girls' toys. "If a boy plays with a doll before he is 3, he will play with a doll later in life," says Reynolds. "If you give a doll to a boy at 3 or 4 for the first time, society has already told him (it's not appropriate)." Despite expectations, Reynolds and Learning Curve's Robotix Brand Manager Michael Edelstein, in particular, have noticed that blocks engage girls as much as boys in a play situation. "When you throw out a tub of Robotix," Edelstein notes, "girls are more creative." Ritvik's Steve Donahue, Mega Bloks product manager, suggests girls lose interest after the preschool years "because there is not enough product that appeals directly to them." K'nex President and COO Norman Walker is also the father of four daughters and says girls will play with blocks if they have them, but they're "not at the top of their lists." Trendmasters' product manager of Zoob, Susan Castiglioni, agrees, "Society says boys build things. Breaking through that may take some time."

At younger ages, particularly during the preschool years, the category breaks out more evenly between boys and girls. Lego hopes its Bob the Builder sets will appeal across genders and that the Harry Potter sets will keep slightly older girls in the loop. Mega Bloks offers two SKUs for a specific preschool assortment—a Build and Play Kitchenette and Workbench—to conform to consumer perceptions about what is gender-appropriate.

Lego has recently had success in bringing more girls—and kids in general—into its Mindstorms line. When it was originally launched in 1998, 70 percent of the purchases went to adults and 30 to kids. Today, those numbers have flipped. For Inspiration and Recognition of Science and Technology (FIRST) is a non-profit organization designed to spark kids' interest in math and science. With Lego, FIRST coordinates an annual robotics championship for middle school students. A teacher leads a group of students to design a robot to complete a predetermined challenge. Thirty-five to 40 percent of the participants are female, McNally says—not bad for a stereotypically male-dominated category (construction) and subject (science).

Another important challenge to block makers is in retaining kid customers as they get older. K'nex's Walker emphasizes the importance of recruiting at a younger age. The back to basics trend, the current weakness in boys' action lines and the success of Bionicle are bringing more people through the construction toy aisle. Cyber K'nex, he says, helps bring in the 10- to 13-year-olds. Walker's company has seen a double-digit sales increase for September due to consumers' predilection towards products with classic play patterns. It bodes well, he concludes, for holiday projections. On the retail end, Bill Taylor, owner of Sandcastle Toys in Newport, Ore., has had a 35 percent increase in business in September versus the same month last year. Since the Sept. 11 attacks, he says, customers are thinking patriotically with the attitude: "I'm going to buy because I think we should."

K'nex, like Lego, has begun to test the licensing waters. MechWarrior, based on FASA's tabletop game and Microsoft's video games, offers a deep fantasy universe of giant, man-operated robots in combat (a boy license if there ever were one). Each set in K'nex's product line contains instructions to build two different robots (with foam rockets that really launch). "You have to be selective," Walker says. "If you want to deliver excellent retail margins, that puts pressure on costs. So the license has to be very strong." A MechWarrior game for Microsoft's Xbox is scheduled for the near future, which will keep the brand in the public's eye. For the younger set, K'nex has revamped Lincoln Logs, under license from Hasbro, to combine playset elements with the traditional wooden log play.

Such combinations in play patterns are key to the category's growth, manufacturers say. A building block upstart, Playmates, hopes to score with its combination of construction and interactive figures (of the kind found with its Simpsons sets). The company's Lord of the Rings sets are shipping now. Miniature figures speak and interact with each other within the Lego-compatible environments. It's a long-term license, Playmates vice president of electronic toys and games, Tom McClure, says. An in-and-out, one-time license wouldn't be "doing ourselves or retailers any good."

Playmates isn't the only new player in the category. Euan MacDonald, a visual effects supervisor at Industrial Light and Magic (who includes Phantom Menace and Jurassic Park: The Lost World among his credits), spearheads Atollo with his brother and father. The construction system is based on a prototype his father, an architect, designed 20 years ago. Compatible with Lego and K'nex, the flexible joints allow more freedom than brick-based systems. "Kids generally throw the instructions away and build their own things," he says. Available regionally in San Francisco and making its debut through Discovery Channel outlets this month, Atollo will make its New York Toy Fair debut in 2002. Progressive Trading's Magz, on the other hand, has been all the buzz in specialty stores for more than a year. "Talk about a great product: It's a little pricey, but it's a perfect gift," says Sandcastle Toys' Taylor, who also does solid business with Zoob, Robotix and Inhabit Toys' Anatomics. "If I can't sell a customer on anything," he adds, "I show them Magz." Progressive Trading President Steven Balanchi attributes the product's colors, magnets and all-ages appeal to its success. Zoob, meanwhile, will get a new look in 2002. Trendmasters is changing the position of this brand for an older crowd by incorporating electronic parts, says Castiglioni.

Both Taylor and Annette Garcia, owner of Wee Loft in Dana Point, Calif., are stocking Brio's Erector sets. Garcia has benefited from Lego (although not the Studio or Mindstorms lines with which she'd have to compete with big box stores), Anatomics (Lego-compatible) and Magz (for all ages). Erector, however, can go to an older boy ("anything with a motor" is a plus, she says) without having to worry that a warehouse will carry it for less. Taylor also thinks the sets will do well, but he "fear(s) it'll be another Tinkertoy."

If this year's holidays are to be, as Taylor says, "a Norman Rockwell season," there may be no better product to involve everyone in the family unit. All play, says Reynolds, is an opportunity for family. "In society we think, 'Give the toy to the child and that will buy me 15 minutes of quiet.' Adults shouldn't look at play as a chore."