Going through the aisles of Toy “R” Us used to be one of my favourite pastimes. It is not only therapeutic, but also, eh… for the lack of a better word … Magical.
I say “Used to be” because Toy “R” Us has scaled down massively in Singapore, where I live and spend half of my time now. Gone are the large, whole floor toy retail outlets where you could roam for hours (and actually buy the toys) – what is left of Toy “R’ Us now feels like a pop up fair with showcases from brands (and not really for selling).
I do not know what was going behind the ‘revamp’ of Toy “R” Us here, but this is probably what it is now.
Toy executives – ‘The industry will bounce back”
A few days ago, Financial Times ran an article “ Toymakers search for magic touch to drag kids away from their screens”.
In the article, toy executives blamed everything from kids not watching TV anymore to coronavirus disrupting the supply chain as the cause why the industry is tanking.
Mattel is probably a good representation of the industry slough – its share prices are now at the same level as March 1993 – 27 years ago.
Funny enough, the executives quoted in the FT article were “confident that the industry will bounce back”.
I do not know where that confidence actually came from. The only argument why it would “bounce back” is that the industry is having ‘cycles” – no why, no how.
How convenient!
Mattel – “Who would buy these in the 2020s?”
I have a number of friends who left some of the leading players in the industry because they saw what their employers had planned for the future releases.
“Who would buy these in the 2020s??” one of them once told me. “It is like our products are still stuck in the 1990s. I am really not sure how we could market this.”
The Economist ran a report last year on why Chinese parents preferred Lego to Barbie. The interesting thing here is now the particular ‘why’ itself, but a deeper ‘why’. Why did that seemingly basic insight not acted upon by Mattel executives? Why did they have to build that Barbie emporium in China assuming people would like it?
BlackBerry – “But it is not secure enough”
A large, successful company (or even a whole industry) always runs the risk of losing touch with customers. In the toy industry we are seeing exactly that – people dwell on past successes and assume that the future would be just an revamped version of the past.
I still remember about a decade ago, in my first job, where I encountered BlackBerry executives ‘educating’ corporate and government CIOs. The latter were pressured by the tidal wave of employees requesting to carry their iPhones and HTCs to work. “But it is not secure enough,” I remember one BlackBerry executive saying at a seminar. “Employees will soon realise the security vulnerabilities of iPhones and switch back to BlackBerries.”
Where is Apple now? And more importantly, where is BlackBerry now?
Even the super brand ambassador Obama did not help.
Ben – “They are lying to themselves”
For anyone who is optimistic that their misery is short term, and customers are going to rediscover their love for your products, maybe you should read the following essay from Ben Horowitz: “Lies that losers tell”.
Or better, wake up and read the whole book:
—
Thanks for reading The Low Down (TLD), the blog by the team at Momentum Works. Got a different perspective or have a burning opinion to share? Let us know at [email protected].
