Innovating Impulse

While low price points remain the driving factor for impulse and novelty toy consumers, innovation and increased demands in the category have led to more offerings and better placement at retail. “In many cases, this category is the canary in the coal mine for the [toy] business,” says Jay Foreman, president of The Bridge Direct. “Products are quick and easy to get to market and, due to the low price points, are easy for consumers to buy and collect.”

For retailers, the consistently low price points (under $10) in the category make it one of the few that still guarantees a healthy margin, despite the uncertain economy. This coupled with demand has opened up floor space for impulse items at retail. “If you look at the hottest toys over the past three years, such as Zoobles and Squinkies, these are items that a couple years ago would have been found at the counter,” says Harold Chizick, vice-president, global communications and promotions, Spin Master. “But now, they’re mainline.” Spin Master, for example, offers top-selling collectibles Bakugan and Zoobles, which feature mechanisms that transform each from a sphere into a tiny character.

Impulse toys throughout the category are offering consumers a lot more for their money. “While kids will always love basic play patterns, consumers are expecting more simple innovation tied to them,” says Genna Rosenberg, senior vice-president, strategic marketing, communications, and business development, Imperial Toy.

As Rosenberg points out, innovation doesn’t have to be through technology. Innovation can also mean miniaturization. “Everything is getting smaller,” says Jenn Devine, director of marketing at Basic Fun, which shrinks toys and games into key chains and portable electronic carabiners for on-the-go play, such as the Hasbro classic Monopoly. Blip Toys and Zing Toys are also shrinking their offerings. Zing will build the collectibility of its Ickee Stikeez characters by rolling them into a smaller version of its novelty pop-up toys ZeeBeez to create Ickee BeeBeez. Blip will launch a new brand called Squinkie Zinkies, which will be as detailed as the original Squinkies but one-third the size.

For Blip, innovation is in the detail. “With Squinkies, we’ve been able to add a lot of different features at a low cost,” says, Bill Nichols, Blip Toys CEO. “Innovation can come through material, color, style, size, value, or feature.”

And the more variety an impulse line can offer, the more opportunity there is for product collectibility and repeat purchases. Many toy manufacturers now offer packs of collectibles so consumers get the instant gratification of being a collector with one low-priced purchase, Nichols says. Offering variety within an impulse line likewise gives retailers the incentive to work with a toy company because of its ability to quickly switch up its offerings in stores. Ja-Ru, Inc., and its retailers set up a plan so that consumers often see a different toy than what was there the week prior, says Danny Bergman, director of sales and marketing, Ja-Ru, Inc.

As the category becomes increasingly more competitive in terms of selection, a toy company’s ability to react quickly to demands is particularly essential for novelty, says Spin Master’s Chizick. “The most important thing is being able to hit the gas when you need it,” he says. “The timing has to be so that you’re able to satisfy some appetite in the market to maintain [a toy’s] level of hotness.”

Competition in the category will continue to grow in 2012. As the economy continues to stagnate, these inexpensive collectibles are expected to remain hot with a lot more manufacturers jumping on board with this trend.