About Us

Steven Reece We are a leading Consultancy to kids entertainment brands including TV, toys & games. Our services include cutting edge qualitative consumer insight and consulting with entertainment brands to maximise their merchandising potential.

The Understated Majesty Of The Carry Forward SKU…!

Posted in Uncategorized on 14 August 2014

The Understated Majesty Of The Carry Forward SKU…!

In a business where between 2/3rds and 3/4s of all product is created new every year, it’s easy to see why we sometimes become over focused on the new products we develop and introduce.

The major challenge I make to toy and game companies though is how they can make their businesses focused on reducing that percentage versus becoming embroiled in a never ending new product development cycle.

Because developing new products costs – it costs in terms of R&D time and investment, in terms of inventory risk against untried products, in terms of opportunity cost and in terms of marketing investment at risk.

Note the over emphasis on RISK (no, not the board game, although that is one of my favourites!). The point is that while it might be fun, it might be exhilarating and it may be career enhancing for your team to develop endless new products, the reality is that your business should be actively working towards developing less and less product on an ongoing basis.

And here’s how you do that – carry forward product! Carry forward product needs no R&D investment, can get away with less marketing investment, and as long as the product sold through well last year is a more quantifiable entity than a new product from a retail perspective…all in all it’s a substantial profit opportunity versus new products.

But so often companies focus on the new and glitzy. For instance, how many sales people are incentivised on maximising carry forward listings? In the companies I have worked with and/or for, the answer is not enough!

Clearly you need to have successful products in a space which doesn’t dictate constant renewal i.e. consumer gadgetry, but if you operate in a traditional category where products do routinely carry forward, are you doing enough to ensure your business is focused on maximising the carry forward opportunity…

…because those products may receive a lot less attention and fuss, but they can represent a highly significant portion of your profits with a bit more love!

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Where Are The Drivers For Traditional (Board) Games…?

Posted in Uncategorized on 01 August 2014

Where Are The Drivers For Traditional Games?

These are interesting times for Traditional Games (by which I mean Games made from cardboard and plastic). The category has been apparently under attack for more or less my entire life from some form of computer/video/digital format. And yet the category is still there, and in nearly every home across the world, there is still at least one copy of Monopoly (often more), and many other such classics.

A query which I hear often is ‘what is the future of Traditional Games?’, especially in the face of the on-going App revolution, the online world and screen obsession of today’s children. Yet despite some tough years, and some loss in market size, the category is very far from going away. In fact the category is still worth somewhere between $5-8billion globally (depending on which figures you believe).

For certain, downward trends are always disconcerting, and need to be carefully analysed, however, in this industry we often seize on the trend, and forget that regardless of whether a category is going up or down, market size still mostly dictates the degree of opportunity.

If we look at the positive factors for the category currently, it’s clear that Licensed Games are originating from both the traditional media, and new media. Mattel’s success with Angry Birds in the Games category would be evidence of a change in where Brands come from.

What is perhaps more concerning is the move away from Traditional Family Games as a popular pastime (this is a global trend, even if not the case in some markets). The past decade has seen big news in the Adult ‘Party’ Game arena, and in the Kids arena, but less so in the Family category. From my perspective based on research I have conducted, and the many people in the industry I discuss this topic with, this is the greatest cannibalistic effect of digital gaming. Where parent and child play together, the frustrations and limitations of playing together via a cardboard/plastic format versus the flexibility, instant gratification and lack of mental engagement needed in digital games has undoubtedly adversely affected the opportunity for Family gaming. (Although please note, this trend is a global generalisation, and applies most in the USA & UK, not so much in Germany for instance which has a strong Family Games culture). The other balancing factor here though is that while actually playing Family games may be under pressure, the reality is that Family board games are often bought from a rose tinted nostalgic view of how ‘we used to play when we were kids’, and so I see sales of such games continuing for at least another generation, even if actual playing has diminished.

This trend towards Adults & Children having their own separate games will continue in general, however, there is one exception. That being the global phenomenon Gameshow Licensed Games. Historically speaking, the Traditional Games category has seen it’s ups and downs, driven to a significant degree by the hot TV Gameshow products such as Who Wants To Be A Millionaire and Deal or No Deal. When these shows have been hot and fresh, the Games category has been up, when they have aged or faded somewhat in terms of mass appeal, the category has gone down. These particular two Gameshows drove many millions of units of Games sales, because consumers were exposed to the gameplay daily or weekly at least, and so could quickly understand how the boxed (or electronic) Games would play.

The reality is that while there have been some fairly popular Gameshows that have made it to a few countries, there has not been a Global smash hit since Deal or No Deal. The TV industry it seems has moved on to a degree from Gameshows as the hottest genre of TV programming to Reality and Music talent shows. But as in the Toy industry, all these things are cyclical. And when the hot Gameshows are around, the whole Games category gets a boost in terms of number of Games skus listed, as well as general consumer interest in the category.

And so, for those who predict the death of Traditional games, think again, they are very much still alive, and who knows, the next hot Gameshow, or smash hit party game may be just around the corner!

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The Loom Band Phenomenon – Understanding Consumer Motivators – Research Report

Posted in Uncategorized on 23 July 2014

The Loom Band Phenomenon – Understanding Consumer Motivators – Research Report

We recently conducted a research study with kids in the UK looking at the motivations and consumer dynamics behind the massive success of loom bands in the UK this year so far.

We’ve conducted research into many previous crazes, and usually find some common factors at play, however, the loom band craze was found to have somewhat different consumer drivers versus the ‘usual’ hit in this space.

To read the research report in full, please go to:

http://www.kidsbrandinsight.com/2014/07/22/dissecting-consumer-drivers-loom-band-craze-consumer-research-report/ 

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BBC Radio 5 Interview With Steve – Explaining Frozen Toy Shortage

Posted in Uncategorized on 08 July 2014

BBC Radio Interview With Steve – Explaining Frozen Toy Shortage

Steve was recently interviewed by Stephen Nolan on BBC Radio 5 Live as part of a piece looking at the shortage of Frozen toys.

Steve was pleased to give a toy industry perspective on the shortage, and to be given the chance to act as a de facto spokesperson for the toy industry in general in order to ensure the industry was portrayed fairly.

To listen to the interview, just click play below…

 

 

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Kids Brand Insight – Toy Consumer Research Bootcamp

Posted in Uncategorized on 13 June 2014

Kids Brand Insight – Toy Consumer Research Bootcamp

A special one off industry event will be held in Central London, U.K. on Wednesday July 23rd. The Toy Consumer Research Bootcamp will help people in the industry understand how they can use consumer research to test and improve their products, and to reduce the risk of product launch failure.

The event will be run by Steve Reece, CEO of Kids Brand Insight – a leading consumer research consultancy working exclusively in the toy, gaming and kids entertainment sectors. All content on the day will focus specifically on the needs of companies in this industry.

The event will cover the following areas:

  • Introduction to consumer research.
  • Different types of consumer research, and when/why to use them.
  • Problems/issues which can be resolved via research – including examples of typical research topics, and how to robustly test for solutions.
  • Toy specific research factors inc. researching with children, mums and testing flimsy prototypes.
  • Content specific research factors inc. TV animation, Apps, online, books/comics/magazines.
  • Doing it on the cheap – how to do your own ‘rough and ready’ research testing to achieve maximum benefit at least cost.
  • Commissioning research studies, how to avoid wasting money & what to look for in an agency.
  • How to manage consumer research agencies.
  • Practical coaching on discussion group moderating/how to run playtesting sessions.
  • How product designers can consumer test products without ‘it’s my baby’ bias in the findings!
  • Reporting research findings – how to deliver realistic, actionable findings from research.

Early bird tickets are available for £197 (+VAT) until seven days before the event, after which time the price will go up to £297 (+VAT).

“As an industry we don’t tend to test products with our end consumer as much as perhaps we should. ” said Kids Brand Insight CEO Steve Reece. “The purpose of this training day on Wednesday 23rd July is to help build understanding of how research works, how it can help toy companies to deliver top selling product ranges and how to best use it for maximum results.”

More information / ticket bookings please click here: http://www.eventbrite.co.uk/e/kids-brand-insight-toy-consumer-research-bootcamp-tickets-11942996825

 

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Kids Brand Insight – New Consumer Research Agency Focused On Kids Entertainment Brands Launches

Posted in Uncategorized on 30 April 2014

New Consumer Research Agency Focused On Kids Entertainment Brands Launches

For release: 1st May 2014

Kids Brand Insight officially launched today to deliver qualitative research for brands in the toy, gaming and children’s entertainment sectors.

The company has already worked with leading brands to combine consumer insight from children and their families with a refreshing dose of commercial reality.

CEO Steve Reece had this to say:

“Before we launched Kids Brand Insight, we were delivering consumer insight via our other business Vici Entertainment (a leading Toy & Game business consultancy) as one of a range of services offered. However, over time the research side of our business has grown to the point where it needs it’s own standalone identity and team. Thus far, we’ve worked extensively across toys, games, TV, virtual worlds and apps. We’re looking to build on this with the official launch of Kids Brand Insight.

Client feedback has been really positive, due to our delivering director level project management and insight on all projects, combined with our broader commercial perspective which allows us to ensure we deliver useable, relevant and commercially practical findings.

Our promise is no fluff, just hard hitting consumer insight combined with the practical inside knowledge that comes from having worked in brand marketing, commercial and senior management roles in the industry.

The best way to outline our point of difference is this – if you look at live sports broadcasts on TV, they have two commentators. One is DESCRIBING what they see, the other is ANALYSING from a position of having played the game, and can therefore suggest what a team needs to change to be more successful versus just reporting that they are a goal behind!

For more information, please visit www.KidsBrandInsight.com

 

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5 Top Tips For Tech Companies Wanting To Enter Toy Business

Posted in Uncategorized on 28 March 2014

5 Top Tips For Technology Companies Wanting To Enter Toy Business

There is considerable opportunity in the area of fusing new technology with toys. This isn’t news…in fact technology has been enriching toys for as long as living memory, but nevertheless the rate of technological innovation has been so rapid over the past decade or so that the toy industry has even more open arms in the direction of technology, technology innovators and technology companies.

Here’s 5 tips for Tech companies who want to get ther tech into the toy aisle in some way, shape or form:

1. Experience first, Tech 2nd – tech driven toys rarely sell just because they have cool new tech in them, or at least rarely sell well for any period of time. Gimmicks come and go, but fantastic user experience is where it’s at.

2. Technology comes and goes, so brands for long term value – sorry to be the one to break this to you, but your tech probably only has so long before it becomes obsolete…that’s just the nature of the beast. But by using your tech to build brands you can build long term value – for instance while the tech behind the original Furby is no longer at the cutting edge arguably, the brand survives and performs in a similar if technologically more advance fashion.

3. Increase your chances by creating a product execution presentation versus showing off the tech itself – turn your tech into a cool toy, you don’t need a finished product, but bring it to life, as humans in general tend to struggle to think conceptually sometimes (even in the toy concept business!

4. How is/can your tech be protected in the toy space – if every man and his dog can use the same or similar tech you have a problem…toy companies invest massively in new product launches, so they need to feel like there is something protectable should they achieve sales success, otherwise me-too/knock off product strips away the value of success, and will stop your tech getting to market via the toy aisle.

5. Find a quick in-road to the industry – we work with hundreds of toy companies around the world, drop us a line if you’d like to run your tech by us/get our help placing your tech in the toy world!

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5 Essential Points Toy & Game Companies Need To Know About Professional Toy & Game Inventors

Posted in Uncategorized on 18 March 2014

5 Essential Points Toy & Game Companies Need To Know About Professional Toy & Game Inventors

Recently we posted an article looking at what toy & game inventors need to understand about toy & game companies. Now we’re going to flip things around and look at key points that toy & game companies need to know about professional toy & game inventors/developers…

Professional inventors unfairly get a bad press sometimes from toy & game companies. They are sometimes described to us as not commercially minded or as a financial scourge due to the heinous and utterly outrageous offence of needing ongoing payment of royalty checks to keep supplying groundbreaking top selling toy concepts!

Yet the reality is that product – actually make that really cool product – is at the heart of the success of any company in this business. So surely we need to think more carefully and value more highly those who are a more or less inexhaustable source of cool concepts & new product ideas…?

To reiterate that point, here’s 5 essential points toy & game companies might want to consider and appreciate about professional toy & game inventors:

1. You Need More Cool Product…Professional Inventors Are One Of Your Best Options For Finding It – between 50 to 75% of ALL product SKUs are new to the market each and every year! In other words, our industry is perpetually locked in a race to churn out enough SKUs to maintain shelf space and drive sales. And these new products have to come from somewhere. So any toy company which isn’t actively soliciting as many new toy concept submissions as it can possibly handle (or even more than that) from professional toy inventors is really missing a trick. Unless you’re one of a tiny minority of companies that has evergreen SKUs representing most or all of your business, you need at least a few of these new concepts every year on an ongoing basis if you want to stay in business!

2. You Present Products That Bomb Too…But You Also Have Hits (Just Like Inventors!) - there is no way on earth that any person or company can develop only amazingly cool products or only create massive hit products. The market just doesn’t work like that. Toy companies have their fair share of failed products or products where you just should have known better than to launch – what were you thinking of?! The same applies to professional toy inventors…but the point is not every single concept in their portfolio has to be exactly what you need, and some of them are bound to suck/completely miss the mark. But the purpose of a thorough concept acquisition process is to sort the wheat from the chaff, and to find the golden nuggets among the stinkers!

3. You’re Saving Money By Paying Inventor Royalties & Building High Potential Value Brand I.P. At The Same Time – our company is increasingly representing and / or consulting with professional inventors to help them reach more companies and place more product…BUT where we are different is that I’ve worked extensively on the toy company side and sat in front of CFO’s asking why are we paying royalties on product without an entertainment brand attached to it? Or why are we still paying royalties on this product which we’ve been running for years, surely we’ve paid the inventor enough money by now? So we feel we have unique insight into the reality of how this process really works and what the substantial financial benefits are for toy companies (regardless of the CFO’s complaints!).

Here’s the answer – there are 4 primary options for toy companies to get new products: a). Develop concepts from scratch and pay wages/take on overhead for the resources to do so b). Buy in finished product/manufacturing license for existing product from other companies c). License from professional inventors.

The advantage of developing own concepts is largely theoretical in terms of the overall market situation, as there are few (if any) toy companies with global reach and significant market share that manages to deliver enough products solely via it’s own R&D department. For sure if you’re a smaller or low mid size player you can do this, and perhaps should, but only in exceptional circumstances does this deliver enough volume of new products for companies with their own distribution across multiple markets/categories etc.

The advantage of buying or licensing in from other toy companies is that market ready, proven product can be acquired without the effort, resource, level of launch failure risk and financial investment of developing your own products. At first glance this seems like a golden formula…however, there are several disadvantages of this approach, firstly you are building brand I.P. owned by someone else (not clever if you want to build long term shareholder value, higher profitability, security and eventually sell your business), you don’t get to sell into all markets globally, only those designated to you by the company owning the brand, of course you have to pay a premium in terms of the margin or royalties from the brand owning company and perhaps most saliently, the rights can be taken away from you, despite all your hard work building the brand up in your market. Now I’m not suggesting companies shouldn’t do this, just that it doesn’t make sense to me to work on this business model alone for long term success and shareholder value.

Then finally, there is the option to select from a seemingly endless array of amazing concepts created by professional toy designers, who are ready and enthusiastically willing to work away in faith and at their own risk on anywhere from dozens to hundreds of new product concepts purely on the basis that someone eventually may want to bring one to market. Under a standard inventor agreement, the licensing company is likely to have auto renewal should they continue to have the product in market to an agreed level of performance (so the rights won’t disappear as long as the products keep selling), there is usually stipulation for exploitation of the brand I.P. into other product areas with the upside potential that offers. Moreover, the company commercially retains full control over the brand for as many markets as they agree i.e. global if negotiated thus, therefore opening up export opportunities and perhaps the chance to use proven products to open up subsidiaries in other markets. And of course the outsourced, pay you if it works royalty model allows for considerably less in house R&D overhead & investment at risk from the toy company (admittedly R&D work is still needed, but at a significantly lower level versus originating all concepts internally).

But all these financial/business model scenarios are meaningless unless there are sales to be had, and so the ultimate counter argument to a CFO’s ‘why are we paying royalties’ stance is always because any prudent business would rather pay a small royalty on something than no royalties on nothing! And the nature of P&L’s in the toy industry is such that lost or missed sales hurt profitability more than anything else.

The bottom line is that toy and game companies should be elated when you have to pay inventor royalties, and the higher the amount to be paid, the more elated they should be, because it means they have an incremental hit product which they didn’t originate and wouldn’t otherwise have had!

4. There Is A Limited Pool Of Top Level Professional Toy Inventors (And By The Way They Talk To Each Other) – or to put this another way, beware blowing inventor / invention group relationships, because there are is a finite number of potential partners out there for your toy company or games company…and if you make a habit of ripping off, alienating or disrespecting people or companies from this elite group, the word will spread, and good luck getting enough inventor originated product into your line then…then you get to watch as your competitors feel the benefit of your short term errant approach!

5. Check Out This Hall Of Fame Of Hit Toy & Game Products Created By Inventors – we can talk about the business model, financial relationships and whether toy and game inventors are hard work for companies to manage or not, but there is really one ludicrously powerful way to eject those issues from any debate on the impact of these self driven warriors who make up the creative heart and soul of our industry…just check out this brief list of inventor originated products:

  • Furby
  • Etch-A-Sketch
  • Bop It
  • Tickle Me Elmo
  • Mr. Potato Head
  • Connect 4
  • Hungry Hippos
  • Rubiks Cube

I could go on (and on, and on) with this list, but even this brief list of just a handful of inventor originated products gets the message across…

…so the question for toy & game companies is whether it’s worth sifting through  hundreds/thousands of new concepts, building relationships over time, launching the odd flop here or there, and paying royalties in order to find the next Furby, Mr. Potato Head or Rubiks Cube…err, yes I think so!

P.S. If you are a professional inventor looking to place more products/present to more companies (Europe, North America and beyond), or whether you are a toy company looking for cool toy and game concepts, please feel free to drop us a line via the ‘Contact Us’ page…

Finally, if you found this article interesting and / or useful, why not sign up to our newsletter by inputting your details in the sign up form on the right hand side of this page…?

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To Err Is Human…& Essential For Toy Industry Success

Posted in Uncategorized on 26 February 2014

To Err Is Human…& Essential For Toy Industry Success

Across the toy industry, between 2/3rds and 3/4s of all SKUs are new each and every year…

…or to put it another way, as an industry we have to replace the majority of our products on an annual basis.

The obvious conclusion from this has to be that not every toy product works, because if it did, why would we need to replace them every year?

For sure we have the annual movie slate, but there is a significant enough quantity of ever green brands to avoid this being the primary driver in us having to replace so large a percentage of product in market.

So the reality is that many products do ok for one year, and then fade away, but in addition, an uncomfortably large percentage of new products we launch does not cut the mustard i.e. it fails.

In some companies, the failure of a major product line is greeted with hysteria leading to a massive backlash of negativity and risk averse business decision making…

…this misses the point. As humans we err, it’s natural for us to make mistakes, because that’s how we learn. The same applies to toy companies!

Why then do companies so often fail to expect an ongoing process of failure in order to find the next smash hit, especially when it’s so fundamental to the cycle of our industry!?

If your company can’t afford for a particular product line to launch then think seriously about whether you really want to launch it, and perhaps consider a better business strategy, which allows you to place multiple ‘bets’ on new product lines, and where no single product or product line launch failure can cause catastrophe for your business…because in this business to ‘err’ is endemic!

 

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Vibrant U.S. Toy Industry Hits The Heights At TIA Toy Fair 2014

Posted in Uncategorized on 20 February 2014

Vibrant U.S. Toy Industry Hits The Heights At TIA Toy Fair 2014

This week saw the coming and going of the 111th TIA American International Toy Fair.

And it came and went with a bang!

Despite reports of a tough peak trading period in Q4 2013, this week’s big event was full of optimism and a certain air of ‘joie de vivre’ prevailed. Of course Americans are an inherently optimistic people, and who wouldn’t be optimistic running a toy business in the world’s largest toy market by far…a market which captures close to 1/4 of the total global toy market between it’s boundaries.

Nevertheless, despite the overall market size, there have been more than enough challenges to deal with in the last 5 years for the US (and other) toy markets, and so such an overwhelmingly positive outlook as we saw this week seems a sign of good things to come. We recently wrote in this blog that we see forward growth for the next few years for the toy industry, as the macro economic environment begins to re-inflate after the global financial crisis hit. The tablet explosion has taken away a lot of the competitive/comparative narrative between the next gen consoles which launched last year and the toy industry. Historically (for as long as video game consoles have existed at least), the first 2 years of new console systems has negatively impacted toy sales/toy market sizes. And so, it was no wonder that 2013 had a tough ending.

Yet the innovation on display this week at the NYC toy fair looks certain to see the toy industry counter attack with strong impact in 2014.

I attended the TIA seminar where TIA trend experts identified the key trends in the market, those being: Large toys, RC innovation, Educational toys, Zombies & Monsters and other things that go bump in the night, Retro/Back to basics & Custom made toys. For the full details/official press release click here: http://www.prnewswire.com/news-releases/top-toy-trends-of-2014-announced-by-toy-industry-association-tia-the-official-voice-of-toy-fair-245868101.html

I can’t disagree with any of these trends, although I would add an additional trend for higher price points. As the US economy looks to rise from the gloom, it is evident that certain high priced toys have been not just selling well – some have been flying (and that’s not just the RC items…ho ho). The toy industry has a habit of allowing retail to bash down price points, before someone/something finally pushes through a spectacular product/s which fully justify a higher price, as evidenced by the resurgent success of Furby this time around. All too often our industry allows itself to be constrained by standard maxims such as $19.99 is the ceiling for toy products in mass retail…err I don’t think so! That may be towards the ceiling for run of the mill products, but consumers will pay for the value in a high end toy, and so for me this is one of the biggest trends of the moment, because increasing average price points is very likely to drive $ market growth. Crappy product won’t cut it at high price points, but really cool stuff will. This trend is set to expand it’s impact considerably judging by the product’s on display at The Javits Center this week.

And beyond that, let’s not forget as ever, that it’s the 98% of sales which are not news worthy i.e. business as usual which pays most of the wages in our industry, regardless of the news worthy hits & trends…a point which was again evident this week, as the more traditional long-standing categories came out fighting with strong within category innovation evident all around.

Finally, hat’s off to the Toy Industry Association…it’s no easy feat to deliver such a vibrant event packed to the brim with great companies, great people and fantastic toys.

 

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