Keeping Contemporary?

It's been a wild ride. Since 2001, when MGA Entertainment's Bratz dolls began to give Barbie a run for her money on mass market store shelves worldwide, there's been nothing stable about the doll category. Dolls have always been an emotional category—the emotion usually being love from the little girls whose first role play experience somehow almost always winds up being “playing mommy” with a coveted baby doll—but in recent years it seems everyone's had an opinion, and a strong one at that. Are the Bratz too bratty for America's impressionable daughters? Is Barbie really a role model for all the things a girl could dream to eventually become, or is she just a symbol of all that's wrong when it comes to society's view of what a woman's body should be?

While those questions play out in the media and universities' women's studies departments, the reality of the doll business at retail has been a market tossed between extremes. Bratz dolls may continue to be questioned for their looks, but there's been no question of their appeal. In their first year of release they helped drive the doll category's sales up by 8 percent. In 2003, the category was buoyed by a 64 percent sales increase in mini dolls and accessories on the strength of lines based on revived Strawberry Shortcake (Bandai) and My Little Pony (Hasbro) assortments, as well as Mattel's Polly Pocket. In 2004, the category's sales were down 6 percent overall, and fell another 2 percent in 2005 to approximately $2.7 billion, although even then a look behind the numbers showed growth of 18 percent for “large dolls” and 13 percent for “soft dolls,” according to sales tracking firm The NPD Group, Port Washington, N.Y.

And through it all, analysts have studied Barbie's every move, continually looking for signs of weakness, and often finding it. This year, the brand witnessed an 8 percent drop in worldwide gross sales quarter-over-quarter during the first three months of 2006. By the second quarter, though, sales had fallen only 1 percent compared to the prior year's period, spurring Robert A. Eckert, Mattel's chairman and CEO, to say at the time that he was “pleased with Barbie's progress thus far,” but that the company was “still in the process of implementing a variety of enhancements for the brand over the next year.” Those promised enhancements have many in the industry, and in the wide world of fervent Barbie collectors, eagerly awaiting Toy Fair 2007.

The doll market's overall slowdown in 2005 was “partly because of a lack of innovation and partly because there are other toys, such as MP3 players, that kids want” instead, says Isaac Larian, CEO of Bratz maker MGA Entertainment.

This year, MGA's doll business is doing “extremely well,” he says, particularly its Bratz Big Babyz The Movie Lil' Singers, which let girls sing along to five of the direct-to-DVD movie's signature songs. And the company expects the new Bratz Forever Diamondz line to be “very hot in the fourth quarter.”

Brian Zheng, president of Playhut, agrees with Larian in the assessment that competition from consumer electronics products like MP3 players is in part to blame for drooping doll sales. “Children, especially girls, are so advanced in technology at a young age that they're dropping their traditional toys and hopping into computer play,” he says.

So to tap into that perceived demand, Playhut will release GoLive MystiKats, a fashion doll assortment with two play patterns—one traditional and one interactive—married together. “I think I can rebuild the gap between 4-years-old to 8, potentially to 10, so that girls in that age are still able to play with fashion dolls without hiding in their closets,” Zheng says. “They will be proud how they can interact with the fashion doll and how well they can exchange information and do what they want without being called a baby.”

The line includes four fashion dolls, plus a doll stand that senses which doll is placed in it, and a hand-held unit and cartridges that allow girls to play games (either on the hand-held's screen or through a normal television) based around creating or choosing the right fashions for each doll's personality, along with themed video games. Of course, you can also just dress them up like fashion dolls, too.

“We think the line has good timing,” Zheng says. “And it looks beautiful, not like a robotic fashion doll. It's still very much feminine but able to marry with technology.”

As of last month, the line was available only at Target's 300 newest stores but will ship to the rest of the chain, as well as to Toys “R” Us, by the time the holiday shopping season begins. Because of production capacity challenges, “we decided we would not ship to Wal-Mart until next year,” Zheng says, although he does expect the doll to be available at Wal-Mart.com, as well as at the other major toy retailers' Internet stores this holiday season.

Mattel is also basing its Barbie fortunes on technology this year; its interactive Let's Dance! Barbie Doll, based on the Princess Genevieve character from this fall's direct-to-DVD movie Barbie in The 12 Dancing Princesses, is expected to be “a huge success for the holiday,” the company says, thanks to technology that brings choreography from the movie to life. The company's Little Mommy Play All Day also leverages technology as part of its appeal. The doll says more than 30 phrases and lets girls know when she has had enough of the supplied “snacks.”

At Denver-based online and catalog retailer eToys Direct, doll sales perform well, in general, at the several toy retailing Web sites it manages “but has followed the industry trend” of being fairly flat, says company spokesperson Sheliah Gilliland.

Like Larian and Zheng, Gilliland also believes that the market's recent softness is part of “the trend we've seen across the board of kids getting older younger and being interested in getting an iPod at age 8 instead of a Barbie doll.”

Among the standouts in the category at eToys.com—the company also runs KBtoys.com and co-manages the toy departments at Sears.com (and the Sears Wishbook catalog) and Kmart.com—are Cabbage Patch Kids, the Bratz dolls and some Barbie items. “But there doesn't seem to have been anything that's really captured the imagination of little girls in the past year, or even several years,” she says.

eToys' merchants are excited about several new products coming out for this season, Gilliland says, such as Playmates Toys' Amazing Allysen (“It's on our hot holiday toy list.”), plus its Strawberry Shortcake and World of Ariel dolls; Baby Alive (Hasbro), Cabbage Patch Newborns (PA Distribution), Bratz Kids and Bratz Diamondz. “We feel strongly that Diamondz is going to do well,” she says.

Last year, the company had “great success,” Gilliland says, during the holidays with a close-out Bratz doll that was 2-feet-tall and originally cost more than $100 retail. “We bought every unit that was left of it and were able to sell it at a really good price; it flew—a big gift item. It looked like a $100-plus gift that people got an incredible bargain on. We'd love to have another item like that!”

eToys isn't entirely dependent on outside vendors to drive its doll sales. The company also does its own doll business, having acquired the rights to the My Twinn customized doll brand in 2004. “We've been very successful with that business,” Gilliland says, helped by “extensive product development since then.” The line now includes “dozens of new items for fall this year, from beautiful matching holiday dresses for girls and their dolls, to athletic outfits, dress up items like a witch costume that we've been positioning as a Halloween item, and a lot of really cute doll-only outfits and accessories.”

There's also a line of My Twinn Baby dolls, launched in late August. They are customizable like the bigger My Twinn doll, with different hair and eye colors and skin tones to choose from. The dolls target a younger girl than the traditional My Twinn doll customer, who is most often 6 to 9 years old. They also cost a lot less, $29 each, compared to $129 and up for the 23-inch doll.

The state of the doll business has spurred many smaller retailers to forsake play, baby and fashion dolls entirely. These days, even the revamped FAO Schwarz stays away from almost any doll found at chain stores. It's a strategy that's worked so far, says David Niggli, president and chief marketing officer.

“Our doll business is very healthy right now,” Niggli says, “It's one of our top volume businesses. We tend to have more of a collector doll business, which I think is a little more stable.”

The company is driving its doll sales by combining a product mix of “classic” baby dolls, such as Corolle's, with collectible dolls—many of them FAO exclusives from Madame Alexander, Tonner Doll and Jason Wu—and by creating an environment where the actual purchase of the dolls is an experience in and of itself. The retailer prominently features two interactive doll purchasing opportunities: the Doll Factory, where girls can have their own Madame Alexander doll custom made for them; and the Newborn Nursery, where girls can again choose their own customized doll, this time a Middleton Doll baby doll.

“A lot of vendors have been pleased to see that through exposure at our store they're seeing a lot of younger girl collectors,” Niggli says. “There are girls that are very involved with fashion; when they see a Robert Tonner doll they really appreciate the attention to detail. Are collectors still predominantly adult women? Probably, but it's an expanding market.”

Huckleberry Toys, a newly formed New York company, will produce the product.