Why Do Toymakers No Longer Know How to Sell Action Figures?
After seeing a post over at DoomKick (An Open Letter to Serpentors Lair) — that was itself a response to another blog post online — I feel it’s worth taking a few moments to point out that it isn’t any one brand or company in the boys’ toys category that’s struggling these days. Yes, Hasbro and Paramount effectively destroyed G.I. Joe at retail by mismanaging the launch of the last live-action movie, but as Barbecue17 of actionfigurebarbeque states:
” . . . I feel that Hasbro has been mismanaging Star Wars for the past couple of years as well. Honestly, they just seem to have a tough time getting products to retail, keeping things fresh, and deciding who they need to focus on catering to (kids or collectors).”
And it goes beyond those brands, with even DC heroes like Batman and Superman struggling to maintain space on retailer shelves. There are some still successful action figure lines out there — or, maybe, just line as Teenage Mutant Ninja Turtles is the only series I see selling great in all stores — but as I’ve mentioned in the past (2012 post, March, 2014 post, June, 2014 post) the action figure market is definitely facing an overall decline in sales.
This isn’t at all something new. We’ve been witnessing the slow death of the action figure at retail for roughly four or five years now, and I wish I could put my finger on the exact problem. In some ways it feels like a very gradual example of what hit Masters of the Universe in 1987 as I more frequently see action figures go to deep sales and clearance now than I did five, ten, or twenty years ago. When a movie is close to release the toymakers flood the shelves with movie-related action figures (see Business Week’s “Hasbro Is Banking on Movie Blockbusters to Sell Toys to Boys”), but each time there are just more toys than there are customers.
Retailers shelves are overloaded, and not with variety but with multiples of the exact same one, two, or three action figures that were produced in numbers far too high to sell through. Just earlier this month I encountered unwanted Star Wars Black figures on clearance at TRU in Times Square, and those exact figures were ones I had snapped pictures of and posted about a few times before they finally went on clearance.
Why do toymakers no longer know how to sell action figures? I’ve no idea, but it’s a problem they need to solve very soon because mass retailers simply cannot keep taking too many toys that are then clearanced out after customers pass them by.
It’s surprising that I’m forced to point to 2009 as one of the highlights of the boys’ toys aisle over the past decade: Transformers and GI Joe toy sales transform fortunes for Hasbro at The Guardian.
It’s an interesting question. Based on my own time in the toy aisle, I suspect three distinct things are eating action figures’ lunches:
1) VIDEO GAMES: In terms of shelf space, SKUs, and profitability, many video games tend to be a better deal for kids AND retailers. (Our son has played the $35 Tomodachi Life more than he has ANY comparable $35 in action figures.)
2) LEGO: At the other end of the imagination spectrum, I suspect LEGO has eaten into much of the “action figure” budget. $50 will either get you a few action figures with no context, OR (say) the LEGO X-Men vs. The Sentinel playset, with five “action figures” (including an oversized Sentinel) AND a vehicle. (I suspect this has especially hurt previously “evergreen” properties such as Marvel/DC/Star Wars figures.)
3) IMPULSE BUY THRESHOLD: My retail days tell me that the threshold of “impulse buys” grows very slowly compared to the harsh realities of percentage clearances. An $8 figure that’s 50% off is $4 – an impulse buy for many folks. If that same figure starts at $16, then its 50% threshold is $8 – NOT an impulse buy. If we assume the $4 “impulse buy threshold” is consistent, then you end up with a shelf of toys that couldn’t sell at full price OR at 50% off, and probably won’t trickle out until it hits 75% off months later… which is terrible from a retail POV.
I agree with everything Steven as said. A few additional factors that I notice now more than a decade (or more) ago:
Multiple versions of the same character/ figure. I point to Cobra Commander, Duke, Optimus Prime, Bumblebee, etc. in particular. There seem to be “new” versions of these characters in every other wave where the only change from previous waves is a different paint app. While nice for manufacturers who get to reuse molds, these subtle changes are essentially invisible to the non-collector – the $15 Bumblebee with the arm cannon is the same as the $15 Bumblebee with the Shoulder cannon and the $15 Bumblebee with the black paint apps.
A sub-category of this is the short packing of obviously popular nostalgia characters. Any version of car Arcee is going to be highly sought after. Full Stop. The current Generations version basically has her car mode as a backpack and is still listing at $30 on Amazon. I understand that it can be difficult to determine which characters are going to be popular, but when a character like Jetfire is hard to find in stores someone is slacking off.
Perceived value is diminished in the main line. Star Wars and Marvel have been really bad about this recently. The SW Black and Marvel Universe 4″ lines retail for $10 while 12″ figures of the same characters sit right beside them for the exact same price. Less articulation and fewer accessories are not immediately evident to the non-collector so again are invisible.
And of course there is always cost. When single carded 4″ figures went from $8 to $10 while offering no additional value, they dropped completely out of the impulse buy section. I understand that manufacturing costs have risen, causing retail prices to rise as well, but to the non-collector $10 is a lot for a toy, especially when they see The Corps figures for $4.
I guess it can really be summed up in not appealing to what non-collectors look for in toys.
“I guess it can really be summed up in not appealing to what non-collectors look for in toys.”
Winnah!!!
Honestly, Phil, I think it might be important to look at what is selling: TMNT. TMNT has been a strong seller since the end of 2012 now and it looks like it has no intention of slowing down.
Here’s what Playmates (and perhaps the license holder does right):
1. A diverse amount of figures with multiple characters (and older figures) offered at all times. No one else is doing this today. I couldn’t guarantee you that I could go out to any retail stores today and pick up five different Star Wars or Batman characters in the same scale, but I would guarantee I could with TMNT. Heroes, villains, and turtle variants are offered.
2. Playsets and vehicles at different scales. While every other manufacturer says these things are dead, Playmates just keeps selling them in droves.
3. They get product to stores. Maybe this is easier becuase they’re popular, but while my nearest Wal-Mart has only ever had the first wave of Star Wars Black 1/18th, TMNT gets stocked about once every week or so. Sure, sales factor in, but wonder how Playmates handles their orders, case packs, etc.
4. TMNT has constant exposure. They’ve got multiple comic lines, a movie, and the cartoon. Video games as well. Oh, and the older movies are on Netflix. Unlike Hasbro and Mattel who seem to sometimes want one vision for their properties at a time (see canceling Renegades before Retaliation) Nickelodeon seems to be willing to offer a wide variety of TMNT media.
There is still someone out there doing action figure right: Playmates. They have cross sell booklets in each package, bio cards, and a variety of products offered. Sure, they have some weird scale issues and iffy paint jobs from time to time, but they’re available at retail, under 10 bucks, and fun. Playmates is making it happen. What’s everyone else’s excuse?