Today I’m pleased to share this interview with Richard Gottlieb, a longtime provider of business development services to the toy industry.
Codename: Richard Gottlieb
Base of Operations: richardgottliebassoc.com
History: Richard Gottlieb is President of Richard Gottlieb’s USA Toy Experts, LLC, and a provider of business development services to the consumer products industry. Richard combines an MBA in Global Management with thirty-five years of consumer products experience to help small, medium, and Fortune 500 Manufacturers increase their market share. Providing straight talk and out of the box thinking, Richard helps companies create innovative, new ideas that leverage their company’s existing assets in dynamic new ways. He is also a Contributing Editor and blogger for “Playthings” and “Gifts & Decorative Accessories” magazines.
PG: In the 1980s, action figures were huge business, with mass market lines like Star Wars, He-Man, G.I. Joe and Transformers dominating the market. Today, kids appear to be more interested in electronics (such as videogames and Ipods) than traditional toys. Overall, what is the action figure industry like today compared to twenty years ago?
RG: It is alive and well. It certainly does compete with other forms of entertainment for children but is a staple part of the industry. Its health will vary with the health of the movie, television and other intellectual property it relies on. Bottom line, if there are hot properties then the segment will be hot.
While smaller toy companies focused entirely on the collectors’ action figure market struggle, Hasbro and Mattel are increasingly focusing on this relatively small market. Given the traditionally bottom-line mentality of big companies, is there really much profit to be made by focusing on collectors?
We have to assume there is as no company invests in a market segment unless there is profit to be made.
One debate among action figure collectors is whether it is better to hunt down figures at brick-and-mortar retail stores than to order sets or cases of them from online retailers. The argument is that buying them at retail stores encourages the big chains to buy more product, and since their orders are so much larger than those of online retailers, the toy lines stand a better chance of success and longevity. Is this true?
My feeling is that anyone who is hunting at brick-and-mortar stores is doing so because they love the thrill of the hunt. For example, I used to collect first and rare edition Oz books and I experienced great fun, excitement and anticipation in walking into a used book store and not knowing what piece of treasure I might find. Therefore, I don’t think collectors should concern themselves with their impact on buying decisions so much as engaging in their passion.
Hasbro has, and soon Mattel will have, a collector-oriented website that offers online sales of toys. Do you think these companies view these websites primarily as a promotional medium (via exclusive items) and a last resort for those who can’t find the figures at retail, or could direct sales be the future of action figure collecting?
Hasbro and Mattel are not new to online direct sales. Therefore, a collector-oriented website is just an extension of a strategy that is already in place. That strategy being: To create revenue through every possible medium of sales. I therefore don’t think they see it as an “either / or” so much as it is an “and” proposition. In other words, direct sales is part of a much bigger future that includes brick & mortar and direct sales and who knows what else.
With gas prices (and thus, plastic toy prices) rising, can a shrinking market like that of action figures survive? Are any alternatives to petroleum-based plastics being explored?
I am predicting that people will be printing out three dimensional toys in their own homes in five years. This will be come about because of the affordability of 3D printers that have until now sold for in the $50,000 range and have therefore only been used for prototyping.
Prices for 3D Printers are now falling dramatically. For example, a company called Desktop Factory announced back in April that they were releasing a model available for $4,995. By 2011 3D printers are projected to fall under $1,000 and keep falling.
I wrote about this in my blog “Out of the Toy Box” in a piece entitled “What’s Next: The End of Traditional Toy Manufacturing?” Here is an outtake from that blog:
I see the low-cost availability of 3D printing as having major implications,” says Cathy Lewis, Desktop Factory’s CEO. […] The long-term vision is rapid manufacturing in the home,” Lewis says. “You have the ability to create one-off products and customized toys. Instead of importing items by millions from China, transporting them to warehouses and then stores, where we drive to pick them up, you will download a legal file, for a legal fee, and print your own repair part. Our parts are durable enough to serve as end-user items.” She anticipates that the “cost of goods” to create a Desktop Factory unit will fall to US$500 by late 2011. “So in 2012, I should be able to sell it for US$1,000.
If one of your readers would like to read the entire blog entry, they can find it here.
I’d like to thank Richard for taking the time to answer these questions. Be sure to visit his blog at Playthings.com.