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Did you know that YouTube’s top earner last year was a 7-year-old who made $22 million playing with toys? Coupled with the closure of Toys “R” Us, it’s easy to see which way the winds of toy marketing are blowing. But what about toy manufacturing? Forbes contributor Brian Pearson predicts that large retailers currently jockeying to fill the Toys “R” Us’ void — such as Amazon, Target, Kohl’s and J.C. Penney — will influence the next generation of toys. But where will these marketing giants get their ideas from? From where I sit, the answer is on YouTube.
Before I get to the evidence I’ve collected to bolster my theory, let me tell you a anecdotal story about my daughter. She is three years old. After dinner, she is allowed to watch 30 minutes of TV or play on an iPad. Between Amazon, Apple TV and the DVDs we’ve inherited from friends and siblings, we have over 100 movies she can choose from, including almost every Disney classic. We also have a subscription to Netflix, where she can watch tons of kids shows on demand — and her iPad has the PBS educational app with additional programming. But what does she choose to watch night after night? None of these. She wants to watch Kids YouTube, where she sits entranced, watching young Russian women with lovely glittery fingernails play with Playdoh and Slime, or unwrap various children’s toys which are displayed, discussed and cooed over.
While there are no direct commercials, literally every toy my daughter wants for her fourth birthday later this month, was featured on one of these YouTube “channels.” I am living, breathing, paying proof of the remarkable effectiveness of this new child-oriented advertorial experience.
A review of last year’s blockbuster toys highlights the love relationship between YouTube and the toy industry — and how “listening” to YouTube trends to make new toys can play out in the numbers. The following examples from Amazon’s Top 100 gift list for 2018 bolster my contention that YouTube is both the “now” and the “future” of which toys get made (and which toys get bought).
- MGA Entertainment’s L.O.L Surprise Dolls
“At the beginning, all the major retailers passed on our L.O.L. line,” he recalls. They did not think that kids would buy a toy they couldn’t see, but Larian knew better. “Kids were abandoning TV and watching YouTube instead. We saw the early stages of the “unboxing” trend on YouTube. We also wanted to make a collectable small doll line.” LOL Surprise Dolls fit both these trends. “There was no market testing at launch. Instead, we went with our gut,” he says.
This inspired choice came not only from what kids were doing online (unboxing), but the company also decided to use the same channels to market the product back out (with samples to those who unbox). Fueled in part by a fall-out with Nickelodeon, they needed to find another marketing modality. “We were spending — really wasting — $30-40 million a year on Nickelodeon. So we went to digital, organic, grass root social media, and viral marketing, and it paid off. We never looked back. We estimate that we saved at least $100 million by going that route,” Larian notes..
The brand continues to follow these online consumption trends, with their new L.O.L. Surprise Glitter Series and L.O.L. Surprise Hairgoals, which sold out from one major retailer in under an hour. While the company has mapped out a master plan for this line for the next 10 years, Larian adds that they will “keep fine tuning it regularly based on consumer insights.” In other words, based on whatever strange thing draws my daughter’s gaze next.
In 2016, littleBits began working with Disney as part of its Disney Accelerator program. One result of that partnership, the littleBits Droid Inventor Kit, was so successful that it secured a nomination as the Toy Association’s 2018 Creative Toy of the Year, and attracted a play base made up of 40% girls — unheard of in the inventor toy space. Happily, the company was invited to team up with Disney again. This time, they had access to the Marvel Entertainment franchise. “Our goal was to create a product that would help kids use littleBits electronic building blocks to become their own super heroes — and to continue getting more girls involved in STEM endeavors through our efforts,” said Emily Tuteur, director of product at littleBits. The set marks littleBits’ first foray into wearables. Kids use a Super Hero training app to build their own hero gear featuring their favorite Marvel Avengers. The product blends the pull of the Marvel franchise with the growing interest in getting kids — and particularly girls — into STEM. Parents like to see their kids learning to give the gear new abilities with easy block coding, using their creativity while sharpening their STEM skills as they customize their own hero identity, and gear to match.
And it’s not just the ‘girls in STEM’ angle that got this product off the ground.
“The world of play is changing quickly,” notes Ayah Bdeir, founder and CEO at littleBits. From a product perspective, kids’ play is moving from physical toys to digital devices. From the parents’ perspective, toys are just as quickly moving online from brick and mortar stores, for seamless adoption.” Bdeir adds: “Construction toys are making a comeback. In 2018, hands-on play is one of the most important trends in learning.” The figures agree: according to The NPD Group, sales of building sets in 2018 in the U.S. totaled $1B.
- Skyrocket’s K’Nex
The K’NEX Thrill Rides Bionic Blast Building Set is riding the rollercoaster videos made with GoPros on riders, and the VR wave – literally. Kids build a coaster (using over 800 parts at a cost of approximately $80 retail) and then can experience what it would be like to ride it themselves, using the cardboard VR viewer and K’NEX Ride It! App. “Kids are able to learn a lot more about toys, even before they launch, on YouTube and other online platforms,” says John Ardell, Executive Vice President and Chief Marketing Officer of Skyrocket. “Kids can now also search out content that they’re interested in. From our end, we can not only provide more content, but longer form content. Prior to YouTube, TV commercials and traditional retailer catalogs were the only way to reach kids, usually through their parents. , Now we have multiple channels to provide in-depth information and organic content to show kids what’s available, challenging and interesting.”
We can expect to see many more toys growing out of the most popular YouTube trends this year, as toys are being made specifically to be promoted in that venue. For new toy manufacturers, understanding the power of this marketing feedback loop could be the key to unprecedented success – even without traditional distribution channels.
March 6, 2019 at 02:56PM
Forbes – Entrepreneurs