Can you bring us up to date with where you are with this year’s big launches? What’s out? What’s coming?
LeapFrog has some major new product launches in our Learning Toys and Reading categories.
In the former, My Pal Scout, a cute plush puppy available in green, and My Pal Violet in purple, both offer fun and memorable play experiences for children aged 12 months plus and benefit from an internet connection that allows a parent to customise the content of songs and games to make the product truly personal from the moment you switch the puppy on and it greets the child by name to the music that lulls the child to sleep.
Scout also appears on a mini range of role-play technology products including the stand out Text & Learn Phone, variously described as a PDA for children.
Tag Jr is the big launch in the reading category bringing the same technology and fun interactive experience Tag delivers to a younger audience of two to four year olds. It features a reader that is shaped for a palm grasp as children as young as two or three would struggle with a pen shaped reader. It also connects to the internet where you can personalise the product with your child’s name and unlock fun bonus activities.
LeapFrog are also delivering the strongest line-up of licensed games and books for Leapster2 and Tag this year. Star Wars Clone Wars & Ben 10 (together the top two rated licenses in the toy industry), Disney Fairies, Disney Pixar Up and Wolverine are all amongst the launches. With Tag Jr’s launch library LeapFrog now offer over 40 licensed game and book titles.
How have you rated the performance of some of your big lines? Has Tag yet managed to mirror the success of LeapPad?
Tag has made a great start. It is and has been one of NPD’s top 10 new properties all year and as such is outperforming the first year LeapPad had. In a market that has moved on considerably since 2000 that represents a successful launch and with the additions to the library that will grow to 18 books this year, plus the bonus content online.
Is anything performing better than expected?
Not sure if I’d class this as totally unexpected, but Leapster2 is performing exceptionally well year to date. NPD reports sales up by 90 per cent in value and the product is now the number educational gaming hardware in the Preschool category. The addition of an online experience has clearly been received very well by parents who have a growing understanding and confidence in online.
Is there additional pressure on the UK and Europe now, with LeapFrog being squeezed at retail in the US?
The US had a record breaking year in educational gaming, and Tag in year one has comfortably outsold the final year of the LeapPad franchise. The UK market is performing well for the company and we have the benefit of the leading products in learn to read and educational gaming. The introduction of connected products Tag, Leapster2, Tag Jr and Scout gives the company a chance to engage directly with its consumers in a way we’ve never been able to before and is something that is unique in the industry. Other key markets in Europe such as France are seeing growth with the launch of Tag but are not yet connected in the way the UK is, so the opportunity for growth over the next couple of years remains high.
How have marketing budgets held up in the current climate?
Like most companies within the industry we are closely tracking sales and marketing investment but we are not holding back, our impressive investment in new products this year and next will drive us still further forward. As a company the connected strategy and particularly the Learning Path gives LeapFrog a powerful marketing tool without precedent in 2009. We’ll use it to drive sales of new products in key retailers and to our new and existing consumer base. We’ve also invested a great deal in improving our retail execution at store level and online.
Is this the time when LeapFrog needs to spend big to re-establish itself with its new lines?
We are spending money wisely this year. We have a great product range and are ensuring that this is well presented in store and online so consumers can buy into LeapFrog and be confident in the advantage our products can deliver.
How have UK retailers reacted to the ranges?
Extremely well. Listings and distribution is up with significant increases in the number of Tag books and Leapster games listed as retailers have realised the appeal to consumers of the choice offered by larger libraries. Our research shows that platforms need a large library to do well in this tough environment and those that launch with only a small portfolio often do not do well as consumers tend not to have confidence in a range that is narrow and promises little ‘grow with my child’ potential. The company has already won some significant new business, most notably a return to the Entertainer
How has the pre-school market stood up to recessionary pressures?
The pre-school market is, like most categories within the toy industry, down year to date but the demise of Woolworths probably hit the category harder than any other. What this does mean of course is that there is an opportunity up for grabs amongst retailers and there is evidence that some retailers are beginning to take this. Manufacturers within the pre-school category, LeapFrog included, have seen staple lines drop out of their ranges and new lines that have come in will take a little time to become fully established.