HOW TO DEVELOP MORE HIT TOY & GAME PRODUCTS & FEWER FLOPS...
Our Consultancy call service offers you the chance to ask any questions you have about your business, your products, export markets, manufacturing – pretty much anything about how to get ahead in the Toy business, We can also give you some additional contacts of key people across the toy business from distributors to factories to product developers. If you want to find out more on how this service works, just click here: https://www.kidsbrandinsight.com/services
THE PRODUCT SELECTION PROCESS: HOW TO FILTER OUT PRODUCTS WHICH WILL FAIL & IDENTIFY POTENTIAL SMASH HITS?
There is fairly true cliché regarding the Toy business – it’s sometimes seen as better to throw plenty of stuff out there against the wall and to see what sticks, because so many Toys in the marketplace are transient. We have a gigantic annual product churn in this business, with the majority of SKUs being new each year, despite how wasteful and inefficient that is.
There are a number of factors creating this gigantic annual churn: Firstly, our industry is strongly driven by fads and trends that come and go quite quickly as the fickle demands of children change like the winds or seasons! Secondly, the movie business remains a major driving factor in Toy sales, and needless to say the shelves need to be cleared each year to make way for the next raft of movie Toys based on the next year’s movie slate. Thirdly, due to the weather patterns and school timelines, the Toy industry is naturally split into 2 major selling seasons – one where kids are primarily indoors and one where they have more access to the outdoors, this naturally changes product selections in retail on a bi-annual basis. Fourthly, Retailers traditionally press Toy companies for ‘New News’, because of the up and down nature of the Toy industry they are fundamentally incentivised to pressure Toy companies into chasing the next big thing.
So there are a number of factors providing impetus to an ongoing stream of product development for Toy companies. The challenge then is to balance this with prudence, avoiding wasteful (costly) developments and focusing development on those products which give the greatest chance of delivering hit products to market and reducing the risks of catastrophic launch failure. Now if you stick around long enough in this business you will experience your fair share of massive successes and total stinkers! I have plenty of both on my résumé.
In case you have not yet experienced either great success or great failure with your products I can briefly highlight the range of feelings you go through. At one end is pure exhilaration, self-fulfilment, ego fuel, acclaim and soaring emotions. The other is lonely, embarrassing, wounding to your professional self-worth and even traumatic to recover from in some instances.
It is therefore an ongoing surprise to me how little some Toy companies do to ensure they have the best chance of huge success and the least chance of catastrophic failure!
FORMALISING PROCESSES, INPUTS AND SIGN OFFS
There is no secret about how you can setup your business to launch more hits and fewer flops – you implement a product selection process which is not casual, informal and slapdash, but instead you formalise the process by which products are added to your product line, and you formalise the inputs required to get official sign off. Furthermore, you formalise key dates or sign off events to ensure you don’t forget to take time to properly assess, ‘pressure test’ and approve your product line.
Now there are probably two perspectives on that last statement:
1. If you work for a major Toy company, you will maybe take that formalised process for granted, and if anything, you may wish for a bit less formality and more flexibility.
2. If you work for a less corporate company, you will either see the obvious benefits of formalising product selection, or you will brush it off.
It’s those in position 2 who this article could benefit.
Because what normally happens in smaller companies is that there is an ad hoc product selection process based on a combination of: owner or senior management whims, retail requests, passion projects which get driven through and average products which nobody finds a clear objection to. This casual and meandering product selection strategy is what increases the chance of product launch failure.
WHAT SHOULD A ROBUST PRODUCT SELECTION PROCESS CONSIST OF?
1. Include All Key Stakeholders - Key stakeholders should include: senior management/owners whose money is being spent, someone ‘nasty’ who likes saying no, isn't emotionally invested in products and who is happy to ask awkward and unreasonable questions (this is normally but not exclusively someone from Finance!), product development teams, engineering, sales, marketing, QA, export sales managers AND target consumers.
2. The process should have clearly defined mandatory inputs & responsibilities for making those inputs - inputs should include: clear evidence of analysis on market/competitive positioning i.e. why is your product likely to compete well versus the many other products out there, or to put it another way, why would a Retailer put your product on shelf/how will you get stand out in the vast array of products listed on e-commerce platforms and why would a consumer spend their hard earned money on your products; key financial info including Pricing (including competitive pricing analysis whereby you prove that you have a competitive price positioning), margin and forecast sales volume, tooling & inventory investment; QA inputs - anything special to look out for, any product specific requirements or risks to be aware of; Sales input (domestic & export) including what Retailers are looking for, Sales objections, barriers to getting the product listed; marketing plan and budget; and last but not least, consumer insights – have you tested the concept AND the play experience with the target consumer i.e. Kids, Families, Adults?
3. Clear fixed non-negotiable Timings and Formalised Meetings – the timings of the Retail sell-in process or peak seasons for consumer sell through are not variable. The key preview meetings and trade shows are held at the same point in time every year (barring the recent Covid induced disruption). So there should be no flaky mañana mañana about the product sign off events in your business. Dates should bec locked in stone, because the Retail selling window is largely fixed, so your product selection events should also be fixed accordingly.
Now admittedly we do often get late entrants to the product line – a new License signed or a new inventor concept or newly signed distribution item which arrives really late. We shouldn’t turn away from those opportunities, because moving fast should be an advantage for a smaller/medium sized company vs a corporate global company, BUT that should be the exception, not the rule. You can most probably afford as a company to roll the dice and take an unplanned, entirely speculative punt on something, but that should only be the cream on top, not the entire cake! If you know your main previews start in early or mid-September, you can work back on the necessary timings to ensure your sign offs take place.
Now this has been quite dry so far – talk of processes and sign offs - some of you reading this might be nodding off already from boredom and mental fatigue, so let's try to liven this up with some examples of products I have worked on where skipping the above steps lead to failure. I now find some of these failures amusing, but at the time I found many failures deeply upsetting, stressful and dramatic!
LATE CONSUMER INSIGHTS, CONFUSED POSITIONING AND POOR EXECUTION WHICH SHOULD HAVE CULLED A NEW BRAND LAUNCH, BUT DIDN’T
My first full time job in the Toy business was as an in-house market researcher for a Toy company. My job was to take new concepts out to consumer test with kids and families. I was briefed on a new brand launch by the product development team and went out to test the product. Sometimes it is just obvious that a product concept is fundamentally flawed. This project was one of those – the product concept was based on irony – the product featured an animal known for being slow, but the irony was supposedly that this animal was fast (for no particular reason), and then the Toy itself had variable speeds, so kids could race the toys, but they would in theory have variable speeds from slow to rapid. The execution was very poor though, so the Toys actually went a). slow, or b). a bit less slow – it was not dramatic, it was not exciting, kids did not like the type of animal, it wasn’t cute or funny, and the irony was not understood at all by the target audience (younger kids don’t get irony often, at least not in the way they understand it a few years later when they are full of irony and sarcasm!).
So the bottom line on this product was that it was clearly crap and very likely to fail commercially. I fed this back politely but clearly to the product development team, and I was then hauled in front of some senior management people to justify my apparently over negative report recommending the product be dropped or at least launched in just one trial market first to reduce the financial risks of failure, even though it was quite late in the process. The company decided to launch the product anyway across multiple markets, and when the product stank up the shelves and sat there robustly refusing to move despite considerable markdown/clearance funding, I was exonerated, and the company booked a significant loss, both financially and in terms of kudos with Retailers who questioned how we could have got it so wrong with that product.
If the right questions had been asked, and the appropriate inputs sought at an earlier stage, this failure could clearly have been avoided – the product was mechanically not up to scratch, the concept was very unlikely to appeal to the target market, and there was no analysis of the positioning of the concept beyond ‘the product development team who are all adults find this funny’.
SMALL PROJECT, BIG PROBLEMS, COULD HAVE BEEN AVOIDED!
At one point when I was managing a large portfolio of brands and products, I was called to a team meeting to discuss a very minor SKU which contributed very small sales on a minor brand. None of us took the meeting very seriously because the subject was fairly insignificant on the surface. We made a number of arbitrary decisions because none of really cared that much about the topic, and we presumed the implications were limited. One of the decisions we made was to change the outer packaging format so that the product shipped in a CDU (counter display unit) instead of the usual outer, which required work on the shop floor to make the product saleable. What we didn’t realise was that our Sales team was having an ongoing argument with a major customer about packaging, costs and impractical in-store displays. To cut a long and stressful story short, we created a big relationship problem with our Number 1 customer due to lack of attention, and because we did not bother to loop in the Sales team who would represent the customer’s needs in our process if we had bothered to include them!
THIS ALL SOUNDS VERY BUREAUCRACTIC, HOW MUCH OF THIS DO WE ACTUALLY NEED…?
The major Toy companies tend to run 3 primary stages of product sign off:
1. Concept - this stage seeks to validate the basic ideas and presumptions behind the concept to decide if the concept merits development resources.
2. Final designed product – this stage should bring back a designed product which looks & works like the final product, but before committing to tooling investment and inventory – in effect this is the launch or don’t launch point in the process based on as close to final reality as we can get.
3. Nearly final manufactured product – this is a final check & validation of the product before it ships out to retail and/or to consumers. I have been involved in some serious screw ups because we missed out this stage. The more key stakeholders who can see and approve the product just before it ships, the better it will be. From expensive and stressful legal cases through to product recalls or unnecessarily terrible product reviews due to printing errors, the final sign off should be approval to ship the product.
The biggest mistakes I have made and also seen in this business is skipping one of these three stages of due diligence, sign off and approval. Over time I've had to fly out to factories to do the final sign off the product on the production line due to tight timelines, but it's always worth doing to avoid the risk of really screwing something up & shipping an unsaleable product!
THE BOTTOM LINE
So apologies that the answer to the question of ‘How can we develop more hits and fewer flops’ is not exciting, glamorous or creative. The bottom line in terms of delivering more hit products and fewer flops to market is formally taking time to diligently assess the product and its chance of success/improvements to increase the chance of a successful launch. Most small to mid-sized Toy & Game companies would benefit from more formal signoff meetings/processes. I have advised dozens of companies on implementing this, and while some drift away from this over time, and some implement less rather than more of this strategy, all clients I worked on with this agreed that it made their decision making much more effective and increased their successful product launch ratio.
Our Consultancy call service offers you the chance to ask any questions you have about your business, your products, export markets, manufacturing – pretty much anything about how to get ahead in the Toy business, We can also give you some additional contacts of key people across the toy business from distributors to factories to product developers. If you want to find out more on how this service works, just click here: https://www.kidsbrandinsight.com/services
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