Toy Blog

Toy Blog2020-11-20T08:50:58-06:00
2403, 2021

Supply Chain Russian Roulette

March 24th, 2021|Categories: About Toy Jobs|

Life in a seasonal fashion business, and especially in the toy industry, is always an exercise in navigating stormy seas and facing highly volatile weather patterns that change each and every year. Despite the soul crushing nature of the coronavirus pandemic, much of the toy industry spent 2020 turning lemons into lemonade. Toy industry sales shot up 16% for the year as work from home parents and home schooled kids had to try to coexist 24/7 in the same confined space. Many toy categories exploded as desperate parents moved through several stages of grief from: “keep them occupied” to “shut them up” and finally to a more enlightened “shut them up and keep them occupied with something that might be good for them.” Home improvement and “nest feathering” also skyrocketed as seen by sales gains at Home Depot, and in big inflatable pools and backyard trampolines that will probably never be used again.

All of this spending has caused a shipping glut. The need to ship so many goods from Asia to the U.S. and Europe for an extended period of time has caused ubiquitous delays. There is a shortage of containers, shortage of space on ships, shortage of ship port parking, shortage of unloading equipment, shortage of dock workers, shortage of trucks to take the goods across the country to a Wal-Mart near you and a shortage of drivers to drive the trucks, if there were enough trucks to drive.

The global freight shortage has second and third degree effects as well. It isn’t just finished goods that are bogged down by slow travels. Manufacturing inputs face shipping shortages in turn. Materials need to find their way to factories which means that everything from semiconductors to paints and plasticizers to widgets of every description need to be driven, flown, or floated to the factory door. Additionally, the Texas freeze temporarily shut down the numerous petrochemical mega-plants located in the region resulting in shortages of various kinds of plastic resins as well. Recent decisions by both OPEC+ and the Biden Administration have also resulted in the prices of transportation fuels like gasoline and diesel (not to mention jet and boat fuel) spiking up as well.
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One thing we know about shortages is that they drive up prices as companies decide they will just pay more to have their products made and moved. This ends up being one big upward inflationary spiral. The potentially good news is that this was all put in motion by the pandemic and the pandemic may be in the early stages of coming to an end. That may depend on a race between vaccine and variants. Over the last few weeks vaccination rates in the U.S. have much improved. Also, most vaccines being used here have been shown to be effective against B117, the most widespread of the variants. However, there are more variants out there and Covid-19 is mutating into new variants all the time. A quick glance at the horizon shows potential trouble brewing. Experience has shown us that what happens in Europe happens here a few weeks later and Europe is currently in the midst of a variant onslaught.

We may outrace a coming variant storm through ramped up vaccinations or we may just somehow dodge it. If that is the case there could be other potential problems. Better problems to be sure but, problems nonetheless. Once the pandemic begins to die down many observers hypothesize that the supply chain will begin to catch up and normalize during the second half of the year. That sounds reasonable and I hope that’s the way it works out. On the other hand we’ve pumped an awfully lot of stimulus into the economy and while a lot of people are suffering, a lot of other people’s bank accounts are fuller than they’ve ever been. As we start to put COVID-19 behind us, I expect a BURST of euphoria and pent-up demand. Like most observers I expect demand to be focused on experiences like bars, restaurants, concerts, travel, theme parks and big nights out. That said, Christmas comes every year and so does holiday spending. I can certainly see a big spending spill into holiday gifts. I would look for the much talked about consumer savings to be spent and more than spent by the end of the year. That would be a high class problem. A much better problem than another round of “lockdowns” – but it would leave supply chain executives looking like the comedy scene in an old western movie – tapdancing bullets.

 

…..Sigh…..worst case scenario – the U.S. continues to do pretty well in vaccinating the public but come springtime, when the good weather comes, people are just done with Covid. No more masks, no more distancing. The bars and restaurants and beaches are full. So are the airports, the cities and hotels – and “suddenly” we get slammed with a Covid variant storm. I surely hope that’s not what happens but if you ask me quietly, that’s what I’m afraid of. You can already see it starting to set up.

Closer to home and on a cheerier note – record setting 2020 toy sales have continued to drive strong toy industry hiring. At Toyjobs we are rocking around the clock! I see that continuing unless we see a strong and prolonged bout in bad pandemic news. Every single person that I’ve spoken to really missed the New York Toy Fair. Few missed the whole annual odyssey from Hong Kong to Nuremburg to New York….but New York, they missed. Hopefully, everything begins to normalize and we can all gather together at various venues in October. That said, in the toy business never expect completely smooth sailing.

Fingers crossed,

Tom Keoughan

2601, 2021

Toy Industry Has Continued Success in the Storm

January 26th, 2021|Categories: About Toy Jobs|

Well, we made it through 2020 and after one hell of a two week hangover things may be starting to settle down. One of the few 2020 bright spots was the 16% surge in toy sales as families learned to live together truly full-time for the first time.

While some bricks and mortar retailers did well, e-commerce really accelerated as people grew comfortable buying a wider variety of goods online. One thing that continues to baffle me is the strength of buy online/ pick up in store service. For the life of me, I can’t imagine buckling up and going out into the world when I could just wait and have an item delivered tomorrow. Perhaps my resistance is a function of the particularly aggressive driving styles of Northern New Jersey which ahead of the holidays become pretty much a full contact sport.

Looking ahead, I see continued strength in 2021 but as always there will be winners and losers. Anything on a screen should continue to shine. If any company can crack the code to make screen learning fun they should hit it right out of the park. All types of arts, crafts and activity kits should continue to do well. Big backyard products had a banner year in 2020 but I don’t know about 2021. I mean, how many big inflatable swimming pools does one family really need? One sleeper category for 2020 was products sporting evergreen licenses. Screen time was way up and streaming really came of age but with very little new movie content, properties like Frozen and even Mickey and Friends enjoyed a revival.

I see 2021 as a bifurcated year with trends remaining much the same until Covid begins to dissipate this summer. Unfortunately, it is extremely difficult to predict whether summer means June or whether summer means September. In any case, once Covid finally does begin to fade, I see an explosion of experiences taking place as cabin fevered families abandon their burrows and rush to restaurants, movie theaters, parks, vacations and bowling alleys. Little League, youth soccer and all team sports and group activities will burst forth anew! That could mean a shift in spending from things to experiences which may dampen toy sales. On the other hand, a period of high times and good feelings could propel a huge holiday shopping season. Never bet against the public’s propensity to spend big during the holidays. So, who knows, maybe a weak third quarter and strong fourth quarter for the purchase of “things”.

I think this bodes well for upcoming toy industry hiring. Here at Toyjobs we have been very busy since Labor Day and since New Year’s Day we have entered the “crazy busy” stage. In most businesses the new year brings new budgets and new hiring. In the toy industry, however, the new year typically brings two months of travel to too many trade shows. Search starts generally begin in March which results in new hiring between April and June. Well, nobody is traveling this year and Toyjobs is off to the races. As is often the case, our job board doesn’t reflect the depth and breadth of just how busy we are. Unfortunately, there are a number of recruiting firms out there without very much to do. They spend their days watching out job board and then trying to elbow their way into searches, we are already handling perfectly well on our own. Search Glommers. I see no good reason to let them know what we are up to.

glommer

I’m usually a cautiously optimistic sort and it’s a bit strange for me to sound so upbeat. I do realize that we are in the worst days of the Covid crisis. People are getting sick and people are dying. Sadly, I know some of them. Businesses are going belly up and people’s livelihood’s are being destroyed. Unfortunately, I know some of them too. In this space though, I am writing about the toy industry and in the toy industry it is never blue skies and smooth sailing. The toy industry has to fight it’s way through at least one crisis every single year. We are battle tested. We are agile. We are resilient. Vaccines are here and have a 95% success rate. Stimulus is here with more likely on the way. We are two thirds of the way through the tunnel and the light at the end is growing bigger and brighter. All we need to do is keep our heads down, our helmets on, our hands clean and our eyes wide. We are nearly home. Keep on keeping on.

All the best,armed-army-back-view-backpack

Tom Keoughan

812, 2020

COVID-19 Won’t Steal Christmas…..But…..

December 8th, 2020|Categories: About Toy Jobs|

It’s a Mad, Mad, Mad, Mad, Mad World but through all the twists, turns and tumbles it’s been an excellent year for toy sales.

NPD Group recently stated that toy sales were up by 19% during the first three quarters of the year even though it is usually not until the fourth quarter that toy sales truly shine. This holiday most wantedseason will certainly be different but Americans impulse to spend in the period between Thanksgiving and Christmas should never be underestimated. With many kids schooling from home, work from home parents have been snapping up products to keep idle hands busy, productive and out of their hair. Arts and crafts, puzzles and games have scored big as have larger outdoor items as families have been enhancing their living spaces now that COVID has them spending so much more time in them.As is often the case, there appears to be disconnect between what parents want to buy for their kids and what kids actually want. As the holidays approach kids are clamoring for screens and software. Devices and video games make up eight of the top 10 items on kids wish lists.

The official holiday sales season appeared to get off to a slow start as U.S. shoppers spent significantly less than last year over the five day stretch from Thanksgiving through Cyber Monday. Total sales were down 14% according to the National Retail Federation. Fewer people hit the stores over Black Friday weekend and many retailers are holding back on discounts because they are sitting on lean inventories. Wal-Mart, Best Buy and others also put their Black Friday promotions online and along with Amazon encouraged shoppers to buy earlier in the season. The bright side to all this was a great reduction in the number of big screen TV brawls, store shootings and teenage taser battles.mall

As more consumers are doing their holiday shopping from the sofa due to the pandemic, Amazon is doing eye-popping numbers. One Wall Street firm is estimating that they could capture 42% of every dollar spent during the holiday shopping period. A “Bricks and Mortar Surprise!” is that Wal-Mart, Target and even Kohl’s are also performing strongly.

Confounding toy manufacturers is the fact that despite sky high demand they have had trouble getting product from port to shelf. Major ports such as Long Beach and Los Angeles are seriously backed up due to a shortage of loading equipment and operators as well as trucks and drivers during the pandemic. Due to this year’s overwhelming e-commerce sales many manufacturers are focused on maintaining maximum availability at Amazon. payroll

Toy industry hiring which had been dreadful throughout the spring and early summer picked up strongly just before Labor Day. Thus far that has continued but I’m concerned by the swift growth in coronavirus related hospitalizations. The most recent employment numbers saw the labor market recovery beginning to slow. Employers added 245,000 jobs added in November down from 610,000 jobs in October. On the other hand, the unemployment rate edged slightly lower from 6.9% to 6.7% and new applications for unemployment benefits – a proxy for layoffs – also fell last week after a recent pickup. In addition consumer spending grew in October for the sixth straight month. Toyjobs hasn’t seen toy industry hiring start to slow yet but I can’t help but see the Thanksgiving holiday as a pandemic fatigue fiasco which will cause a spike within the surge. Although I’m usually a cautiously optimistic fellow I see the holidays as a six week superspreader event which will prove quite difficult to tamp down until widespread vaccine availability arrives. That can’t be good for public health which can’t be good for business-and certainly can’t be good for hiring.

Winter is coming

2810, 2020

One Hole Ahead of the Hammer

October 28th, 2020|Categories: About Toy Jobs|

The crazy year continues from plagues to locusts, wildfires to hurricanes, Charmin shortages to murder hornets – I even hear rumors of a hot new hair metal glam band called Hunter Biden’s Laptop….but I cant seem to find any information about them. I’m feeling like the last of the Whac-a-Moles forever one hole ahead of the hammer.

whac

Through it all the toy industry has survived, some product categories like puzzles, games, arts and crafts and big outdoor toys are even having their best years ever. Other producers of movie based product have been having a very tough go. That said, overall things seem to generally be getting better. I must say that I was completely taken by surprise by Mattel’s stellar third quarter earnings numbers.

barbie

I’m pretty much winging this piece because there really isn’t much new. Covid Time drags into it’s ninth month and there is no real end in sight. We’re still muddling through but the muddling is better. Even as coronavirus case counts rise business is improving.

After a four month long backyard barbecue intensive, toy industry hiring slowly started to return in mid-July. September was an inflection point towards stronger hiring trends. As I write this Toyjobs is going pretty much full throttle although it remains to be seen how long this pace will continue. The number of searches that we are currently working on is not accurately reflected on our job board. There are two reasons for this. First, I like to do my work reaching out to the candidates that I think are most appropriate before inviting everyone else to raise their hands. Secondly, there are several underemployed headhunters out there who spend their time reading our job board in the hope that they can glom onto a search that we’re already doing. I can’t think of a single reason why I should help them do that.

In most industries, companies get new budgets at the beginning of the year and can start any additional hiring immediately. The toy industry tends to run a little differently. Toy sales are so fourth quarter loaded that most companies want to get their results and crunch their numbers before finalizing their future plans. Additionally, in a typical year, the toy industry spends most of January and February criss crossing the globe to attend what can only be described as too many trade shows. Also, the toy industry is so seasonal in nature that many companies start their fiscal year on April 1st. These factors usually cause a delay in start of the year hiring which usually takes off in March and April.

In 2021, things could be different. While companies won’t have done all of their calculations by early January, quite a few of them will already know they have done quite well. When you factor in that nobody is going to be traveling in January and February, I see toy industry hiring taking it’s next leg up in about the third week of January. Unfortunately, I don’t really see Covid-19 coming to an end and things beginning to return to normal until August or September. That said, if you have to go through a pandemic it is far better to be employed than not. We here at Toyjobs will being doing out utmost to get as many people hired as possible.

….Yes, I know we get paid for that, but that doesn’t mean it isn’t helpful!

Keep your heads down and your hands clean!

…..and your fingers crossed!

All the best

1808, 2020

What a Long Strange Trip It’s Been

August 18th, 2020|Categories: About Toy Jobs|

bart

In the words of Bart Simpson “Ay Caramba!”

At my age you rarely get the opportunity to take a four month long backyard sabbatical but that’s exactly what I did. Nobody was hiring and it didn’t make any sense for me to be reaching out to my clients and pestering them when I knew they didn’t need my services. So sabbatical it was. After quickly tiring of interminable White House Coronavirus Task Force Briefings, I focused on perfecting my barbecue techniques.

Meanwhile, depending on the product category many toy companies were knocking it out of the park. With both parents and kids staying home – together – 24 hours a day, 7 days a week! – parents had to find something – anything – to occupy the youngsters. Early on games, puzzles, activities and crafts were flying off the shelves. By late spring and early summer outdoor toys, scooters and inflatable pools were quickly sold out. On the other hand, makers of action figures, plush and vehicles were struggling.

During this period, I had several searches that had been put on hold so I continued to check on those and diligently monitored the job boards to see when activity would pick up. And there is was. As I sort of expected in mid-July the market for toy industry jobs started to bubble up under the surface. This made perfect sense as the 2021 sales cycle for toys would be beginning in mid-September. Companies who want to add to or upgrade their sales staffs have to move quickly. Toyjobs traditionally gets a big jump in search starts in late July. So we did get a bump but it has been much more subdued than usual.

Since retailers have stopped physical meetings; sales people can cover more ground since they don’t have to travel (pun intended). In conducting business by Zoom or Microsoft Teams companies can make do with less sales staff. That said, making do is not optimum. Most sales executives can’t help but feel that they could have gotten that one or two extra items on the shelves if they had met in person. Also, it’s pretty difficult to really further a relationship with a Buyer when you’re playing Hollywood Squares. So, while it’s good to save money now, toy companies will eventually want to get back in front of buyers and will need additional sales staff to do that. Retailers, on the other hand, may decide that virtual only sales calls makes their Buyers more efficient. I can certainly envision Wal-Mart and Amazon moving that way. As in all things, retailers will call the tune and manufacturers will just have to fall in line. It will be interesting to see how it plays out.

How do I see Covid-Time affecting the toy business moving forward? This is by no means a complete list but here are some quick thoughts:

  1. Hiring- While hiring is just starting to pick up it is at a very subdued level. Even though many companies have done extremely well, we are in a very low-visibility environment. Will there be a vaccine? How long will it last? Who will be President? What will that mean for the economy? What will that mean for relations with China? Will virtual sales calls become the norm for the long term? I expect hiring to grow but slowly and off of a zero base until next June or so as companies continue to play things close to the vest. By June we should be out of the pandemic; we will have a clear picture on sell-ins for the holidays 2021 and… hopefully…we will know who our President is going to be for the next four years.
  2. Work from home I think we will replay the script from the financial crisis. For several years companies were doing a lot more remote work but by 2015-16 I was seeing a huge pushback from employers. Teams were nowhere near as efficient. Unless you were parked in Bentonville or Minneapolis companies wanted their people in the office where teams could work together more efficiently and companies could build a corporate culture. That said, by 2016 companies were also more relaxed about working one day a week from home. I expect that too will continue.
  3. Supply chain It has become cliché that Covid-19 has accelerated all the trends that were in place already. This is very evident in supply chains. Trump’s China policies had already jump started an effort by toy companies to diversify their supply chains if only to avoid tariffs. All types of businesses have recently seen up close and personal the danger of having too concentrated a supply chain and that will accelerate the diversification process. Lastly, it’s not just Trump, the entire Washington establishment has moved decidedly in an anti-China direction. Regardless of who is President, the U.S. and China will have, at best, a strained relationship into the foreseeable future.
  4. Retail- The shutting down of the economy has greatly accelerated the collapse of brick and mortar retail. Will some of the retailers who are now on the ropes bounce back when the pandemic lifts? Sure, but many of the ones that were wobbly even before Covid-19 will be gone forever. The good news is that manufacturers have learned to be much more effective at online marketing and online sales although sadly, online selling squeezes margins. Additionally companies that began online are now opening physical stores which is a trend that is likely to grow. The move to omnichannel retail is happening even faster than before. Joseph Schumpeter are you listening?
  5. Toys ‘R’ Us Does anybody remember Toys ‘R’ Us?

So that’s my two cents. I may be wrong about any or all of it. Fortunately, for the toy industry it is always stormy seas so we’re used to scrambling. Very cautious optimism is the phrase of the day. We’ll muck and muddle through. I look forward to a very happy second half of 2021!

Keep your heads down and your hands clean.

Tom Keoughan

1703, 2020

Time Warp to Toy Fair

March 17th, 2020|Categories: About Toy Jobs|

Once upon a time, in a land far far away and a long long time ago…..

…..there was a New York Toy Fair. It all kicked in on a Friday night with the Toy of the Year Awards. The night belonged to MGA Entertainment as L.O.L. Surprise was named Toy of the Year. In accepting of the award, company president Isaac Larian was surprisingly well behaved…mostly. L.O.L also garnered awards for Doll of the Year and Collectible of the Year. As usual, Mattel and Lego also had good nights each winning several awards although Hasbro was strangely absent.

lol surprise right one

I always enjoy seeing smaller and newer companies win and it was great to see WOW! Stuff’s Harry Potter Invisibility Cloak and Zuru’s RainboCorns Sequin Surprise take home the hardware. I also enjoyed seeing Playmobil take home an award as I can’t recall them winning one before.

Harry Potter

The big innovation of the night was the shout out to toy creators and designers. These people are the soul of our industry and deserve much more recognition than they regularly receive. It was a good move to see them recognized on the screen but they should be put in the evenings program and anywhere else we can think of as well.

The Toy Association did its usual suburb job organizing and hosting the event. The only thing I’ll note is that we seem to be running out of room-we may need a bigger space. It’s a credit to the Toy Association that more and more people are attending this event every year.

As I hit the world’s hardest floors at the Javits Center on Saturday morning the word on everyone’s lips was “Shaq….” “Shaq…” “Shaq….” As the larger than life Shaquille O’Neal cut the ribbon at the opening ceremony. Kudos to Basic Fun for the landing him as the spokesperson for their Tonka brand. That coup should help them drive a lot of business.

2020 Toy Fair New York

I spent most of Saturday on the main floor and while attendance seemed a little light it was picking up by the afternoon. That had to be expected as travel restrictions and the closing of the China Pavilion meant that much of Asia was not in attendance. I spent much of Sunday in “the basement” and traffic appeared to be stronger.

It wouldn’t be a New York Toy Fair without the Women In Toys Wonder Women Awards dinner. Genna Rosenberg and Jennifer Caveza did a fantastic job as always. Everything appears to run so smoothly but there must be a lot of scrambling behind the scenes to put it all in place. Maybe I’m wrong about that. Maybe they just have it down pat. The event has grown to be so popular that like the TOTY’s they may need a bigger venue.

02232020: Women In Toys Wonder Women Awards

February 23, 2020: Women In Toys Wonder Women Awards at Pier 60, Chelsea Piers, New York, New York. (Photo by Edna Holifield)

Kudos to Ashley Mady on her Presidents-Award as she steps down from leading WIT for the last 6 years. The organization has added many new programs which have lead to substantial growth under her leadership. Incoming president Janice Ross will certainly do an equally excellent job.

Ashley Mady

Ashley Mady, Former President, Women in Toys, Licensing and Entertainment (WIT) poses at the 16th annual Wonder Women Awards, on Sunday, Feb. 23, 2020 in New York. (Photo by Diane Bondareff/Invision for Women in Toys, Licensing & Entertainment/AP Images)

Monday morning I was bouncing all over the place during my Monday Mop Up. Tuesday, at the crack of dawn, I hopped a flight for my annual “Escape from New York” trip to New Orleans where the weather was warm, the food was fantastic and the music was flowing.

 

I would like to congratulate Steve Pasierb, Marian Bossard and the entire Toy Association team for their excellent handling of the NY Toy Fair under difficult and constantly changing conditions.

Which leads up back to present day reality…..

 

 

 

The toy industry has been hit by a double whammy. First, the supply chain got whacked and now I am hearing that retailers are playing coy about finalizing orders. My extremely unscientific survey of the dozens of senior toy executives that I speak with each week has indicated that many/most factories started running again during the first week of March but with only about 30% of their workforce. Last week, I was hearing 50%-60% of workers had returned. That said, there are still problems with materials and components as the entire supply chain has been affected. Additionally, trucking to the ports has been disrupted by a shortage of drivers. Consensus seems to be that if the China supply chain isn’t somewhere approaching normal by early April the warning lights will go off and if they’re not there by May 1st the red alert will sound.

Retailers could help solve the second stage of the problem by starting to firm up orders as production comes online rather than playing their usual game of trying to push all of the risk onto their suppliers. They can’t expect to have both just-in-time inventory and just-in-time ordering.

Fortunately much of the toy industry is accustomed to navigating perilous waters. We’ve gone from product safety panics, to the financial crisis and from the collapse of Toy‘R’Us to the coronavirus. The toy industry is used to operating in troubled times and has learned how to quickly adapt. I think we’re also getting better at seeing crisis around the bend. Once factories are fully up and running – material costs will likely rise. For now, keep your head down and keep moving things forward as best you can. If we can put the Coronavirus behind us by mid-summer it is likely that an enormous wave of good feeling will wash across the land. The holiday sales season could be YUUUGE!

I’m no expert, so rather than listen to me drone on about COVID-19 I hope some of these articles are helpful and actionable.

 

 

Keep your head down and your hands clean

LIVE LONG AND PROSPER!

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