It was the world’s number one toy company last year, but Mattel certainly isn’t resting on its laurels.
Dominic Sacco sits down with SVP & UK general manager, Geoff Walker, to discuss how it’s ‘Creating the Future of Play’ and what it’s working on to stay at the top.
ToyNews: What are you doing to maintain your market-leading position? Can you give us a rundown of your big products and plans going forward?
Geoff Walker: Obviously Barbie is having a great run. The business is up 18 per cent year-to-date and we’re excited by another great growth year.
Barbie has two unique things coming – one has just launched on Barbie.com which is a digital reality show called Barbie Life in the Dreamhouse. Then we have Barbie: The Princess and the Popstar DVD in August, which is the first time in five years we’ve done a Barbie musical. And then there’s the toy range behind that. Across all of our toy brands, it’s not just about the toy, but the content and the storyline that drives those toys.
Why? Has the digital boom had an influence on that?
These days you have to [embrace digital]. Whether it’s digital through apps and pads, or online, you have to. Marketing to kids nowadays is so much more than just a 30-second TV spot. You’ve got to hit all these touchpoints. Barbie.com and Life in the Dreamhouse is a phenomenal way to break through. And you take it over to Hot Wheels. Last year we set the world record for the largest jump by a truck. It was what the brand is about – a thrilling vehicle experience – but it also created digital content for the brand that consumers can experience in a different way.
You can’t just make a toy and put it in the marketplace. You’ve got to tell a story now.
What kind of market share do you have in the UK?
Mattel’s UK market share is 8.82 per cent year-to-date. It was the number one toy company in the UK in May and globally it is number one. At the moment we’re vying with Lego and Hasbro. We were also number one last year. We had a share of just less than ten per cent last year.
In an environment with several challenges, having the brands that parents can feel safe with is always a good thing. If they’re going to cut spending, they want to know they’re giving their kids something they’re going to want, use and get value out of. Great brands give you value.
Monster High has been a very successful new brand for you. Are you planning on introducing other fresh IP?
Yeah. One of the key strategies right now is introducing new intellectual property. Monster High was one of the first ones and it’s been phenomenal.
It launched uniquely – not with a TV show or animated series – but digitally, where that eight to 12 year-old girl kind of lives.
And girls are able to discover that, versus just a 30-second TV spot like the old days.
As we move forward we’ll have new properties coming out. Whether these get launched in new ways or with more traditional TV shows and movies, we’ll be looking at it.
And with the acquisition of Hit Entertainment, clearly the reason we wanted them is the amazing IP they had. We’ve got the crown jewel of Thomas & Friends, but when you delve into it they have other amazing IP like Mike the Knight.
Other toy companies have the Mike the Knight licence. Will they continue to do so?
Hit will continue to operate as an individual company – we don’t want to try to pull them into us too fast. We know they had a special environment and culture that’s allowed them to grow into the company they have.
For something like Mike the Knight where they have a partner, that partner will keep going. We have a great partner in Character in the UK, but in the rest of the world Mattel will be the toy firm for Mike the Knight.
You have Angry Birds, Fruit Ninja and Cut the Rope Apptivity products exclusive to Mattel. Why go after digital properties and make them physical?
The strategy we took in the games category is what we’ve been doing in card games and board games for decades. We launched Angry Birds at the end of last year and it’s been on fire. Now we’re moving into Cut The Rope, Fruit Ninja and Angry Birds Ice.
Speaking of new ways to play, what do you think of Skylanders? Has that franchise influenced your Apptivity line?
Not Skylanders per se, but I think the mash up of different technologies and toys over time is always going to be out there. For us, we chose the app-type strategy instead of video game platforms, as the cost of development and marketing for games is so significant nowadays.
Video games are not our core competency. I think the development timeframe THQ [Mattel’s video game publishing partner] is using will eventually get us there.
I think we’d like it to go quicker and we understand the nuances that exist in that industry. It’s a tough market right now.
Competition among your toy competitors is intensifying due to shorter toy lifecycles and greater technology. How are you dealing with that?
Having brands that have longevity in the industry – and many of our brands do, since parents grew up with them. There are not lifecycles to our brands. What you find is there are lifecycles to toys, not lifecycles to brands.
We make sure we add depth of play which is key.
If you give kids toys that have depth of play and innovation to them, versus just a toy that sits there and is played with once.
International gross sales rose seven per cent in your fiscal Q1. How much of these come from the UK?
International represents 50 per cent of Mattel. And Europe makes a third or so of that. So we’ve been transforming our company to think more globally, rather than one that just designs products for the US and exports them internationally.
A great example of that is Octonauts. It’s a UK-based property developed in conjunction with Silvergate, a UK content developer.
What will be your big products for Christmas this year?
Master Moves Mickey which is a Mickey Mouse that fully breakdances and spins around on his hands. It’s an amazing mechanism. Barbie will have a doll range based on Princess and the Popstar, Hot Wheels has a giant track set coming which allows kids to do all the speed stunts, and Monster High will also be sold out long before Christmas.
How excited are you by the Batman toys and the Power Rangers Hot Wheels products you have coming?
Power Rangers already had a vehicle-based history because they had motorcycles in the original episodes, so how do you expand that in a different way and tie it into Hot Wheels and make it relevant? We think it’s going to be massive. It’s a great property on the upswing.
As for the Batman toys, they’ve doing great out of the gate so we’re very positive. Not a lot of kids are going to see the Batman movie, but they will know about it. Kids know the brand, and they see the movie trailers, so they say ‘Batman is cool, and superheroes are cool’, so they buy into the brand and we see it in what we’re doing.
What would you like to have achieved by the end of the year?
As the industry leader, we want success in a growth category. So we grow as the category grows, and so there’s lots of success and hopefully a great holiday season, where all the kids buy lots of Barbies and Hot Wheels. You are always trying to push the envelope from traditional play patterns by merging different concepts. And all of those different touch points just make for a fun, dynamic industry.
Check ToyNews' September issue for interviews with Lego and Hasbro, to find out what they're doing to compete.
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