With the hot toy of 2009 likely being anything that carries a modest price tag, the two biggest U.S. toy companies, Mattel Inc and Hasbro Inc, are reassessing their lineups.
Low prices are consumers' biggest priority this year, said executives of the toymakers in separate interviews ahead of next week's Toy Fair in New York.
The economy is the biggest issue, Mattel's president of Mattel Brands, Neil Friedman, said on Friday. We have to be cognizant of the consumers' ability to buy and what their discretionary income is, he said.
To that end, Mattel is selling Elmo gloves for $30 this year, while its $60 Elmo Live doll was in the spotlight a year earlier. Hasbro is promoting its $28 Lil' Patter Pup, whereas last year's focus was on the $180 toy puppy called Biscuit.
It is even more critical when people are being more careful or measured in how they spend their discretionary income to cater to those needs, Hasbro's global chief marketing officer John Frascotti said.
The 2008 holiday shopping season was the weakest in nearly four decades for U.S. retailers, and both Mattel and Hasbro posted fourth-quarter profits that fell short of Wall Street expectations.
Friedman and Frascotti said they had enough time to use the lessons from 2008 to revise selling plans for 2009.
For example, Mattel assessed its number of products, to see what could be cut, and asked retailers what toys they wanted on shelves and which ones they would avoid, Friedman said.
For the rest of 2009 there is nothing that we could not change that we needed to change, he said.
Mattel's Barbie doll, which celebrates its 50th anniversary in March, will be the highlight at this year's Toy Fair, as Mattel works to reinvigorate the classic doll's sales for a younger audience. The Barbie display at the fair includes a mock runway with Barbie dolls wearing Versace and Vera Wang dresses.
Hasbro, which makes G.I. Joe and Transformers toys, is expected to get a boost this summer, when each of those franchises puts out a movie.
Frascotti expects those toys to be big hits and said Hasbro's products are now appropriately priced.
When we saw the economy going in the direction it was in early 2008, and we were in the process of finalizing our decision for 2009 product line, we had enough time to react, Frascotti said.