Booming Sales in Toyland

By John S. DeMott

Santa's elves prepare for what may be their best Christmas ever

Make way for a fun-and-games Christmas. Stand aside for an avalanche of GoBots, Trivial Pursuits, G.I. Joes, Gloworms, Transformers, Cabbage Patch Kids, Care Bears and Rainbow Brites. Hold your breath for a flood of He-Mans and My Little Ponys. After two years of a sturdy economic recovery in which adult Americans got their goodies, it is now the turn of their children. Toymakers and -sellers are happily anticipating their biggest Christmas, and their biggest sales year, ever.

The 235 members of the Toy Manufacturers of America, which accounts for 90% of all the toys sold in the U.S., are expecting retail sales this year of $12.5 billion, up from $10.4 billion in 1983. It will be a "super year by a comfortable margin," says David Leibowitz, a toy-industry analyst for American Securities in New York City. New Jersey-based Toys "R" Us, America's largest seller of playthings (1983 sales: $1.32 billion), expects a sales Increase of about 33%.

Two popular items, Cabbage Patch dolls and Trivial Pursuit, both introduced ast year, are no longer simply hot-selling toys. They have now become American social milestones. Says Thomas Kully, a toy-industry watcher at the investment firm of William Blair & Co. of Chicago: 'Those two products are absolutely the biggest the industry has ever seen." Shipments of Cabbage Patch Kids and ancillary licensed products, including a board game, storybooks, decals and patches, will reach $1 billion in 1984. More than a year after they appeared and despite the fact hat Coleco, their manufacturer, does not even advertise them, the dolls are still in short supply. That does not hurt sales; in fact, it helps. Says Margaret Preble, a sociology instructor in Virginia: "The shortage gives implied status to those who can get a doll." An official of Toys "R" Us says "thousands of people" are on its Cabbage Patch doll lists in its 198 U.S. stores.

Meanwhile, Trivial Pursuit has taken hold of the nation. Last year all board-game sales were worth $200 million at wholesale; this year Trivial Pursuit alone will have sales of close to $400 million. An estimated 22 million Trivial game boards and question sets will be sold in 1984. The game's success has also helped revive old board favorites. Sales this year of Scrabble sets are up 27%, to 2 million, and dollar sales of Parker Brothers' Clue are up 20%. Psychologists and sociologists are searching for an explanation for Trivial Pursuit's phenomenal popularity. Says Psychology Professor Ricki Levenson of New York University: "Trivia plugs into everybody's secret addiction to gossip. Knowledge of trivia, like the name of Princess Di's hairdresser, is mental junk food that people delight in consuming."

The brisk toy and board-game sales were set up, in part, by the decline and fall of the video game. Capricious young people rapidly cooled toward them in the fall of 1983, and retailers were stuck with huge oversupplies. At the same time, stores last Christmas were caught short of such traditional items as dolls, trucks and board games. Video-game retail sales this year are off sharply again, down 56% during the first nine months vs. the same period in 1983. Fueled partly by money that had previously been spent on expensive video games, sales of other kinds of toys moved along smartly right from the beginning of 1984 and have stayed high.

In toyland's aisles throughout America last week, it was lurch and grab. Retailers were selling out fast of popular items as soon as they restocked shelves. Tonka has told some storekeepers that they can expect no more shipments until January of its hot-selling GoBots, innocent trucks and vans that turn into ferocious robots. Transformers, clones of GoBots that are made by Hasbro Bradley, are also in short supply and are now outselling their rival.

Toy marketeers seem to have guessed right in determining what would sell. Fisher-Price, the toymaking subsidiary of Quaker Oats, teamed up with Kodak to produce a new child's camera that sells for $25 to $44. In its viewfinder is an indicator that shows a red flag if the child is holding the camera crooked. Fisher-Price has long made a play camera, but the one this year was its first foray into the real thing, and it is selling well.

Marketing techniques are slicker and more irresistible than ever. At one time, toys were copied from movie, television or newspaper cartoon characters. Examples: Snoopy and Mickey Mouse. Now that is reversed. Toymakers vigorously promote their own elaborately executed concepts. They create the character and then license rights to the storybooks, school bags, furniture, clothes, greeting cards and TV shows that go with it. American Greetings started the trend in a big way in 1980 with Strawberry Shortcake. Similar hits this Christmas include Care Bears and Masters of the Universe.

Parents who try to buck the marketing efforts of the toymakers by even so much as thinking about more conventional gifts will need a division of G.I. Joes to hold their ground. When asked what they want for Christmas, most children will parrot the names of popular toys. Jennifer Been, 7, of Dallas advises that she wants a Cabbage Patch Kid, a Cabbage Patch stroller, a Fisher-Price camera and Lego building blocks. Says she: "Almost every girl in the second grade has a Cabbage Patch Kid."

Carole Lockman of Wayland, Mass., has always looked for toys that were "intellectually of good quality." But she confesses, "My 13-year-old wants anything to do with Michael Jackson." Joseph Zaitchik, a University of Lowell English professor, and his wife Holly play chess with their eight-and four-year-old sons. Some of their gifts this year will be traditional: a microscope, for example, and a baseball bat. But something new is also trundling in. Says Holly Zaitchik: "My little one is into cuddly things. He wants a Care Bear, and I've bought him one."

Other forces are at work to keep toymakers busy for years to come. There is first the baby boomlet, which started in 1976. While not as important as the postwar baby boom, it has produced a new generation of toy customers. Says Carol Blackley, an official with Fisher-Price: "The important thing to track is first births. Parents generally spend more for their firstborn. More toys are passed down to the second and third child." By the middle of the '90s, the number of children from infant to age nine is expected to increase by 12.3%. To the toy marketeers, that translates into more than 4 million new consumers. Industry officials think the baby boomlet will mean solid non-Christmas sales as well. Says Stephen Hassenfeld, 42, chairman of Hasbro Bradley: "Business is pulsing. Not only for today, but for tomorrow."

Then there is the divorce rate. Industry people point out that divorced parents, especially affluent ones, tend to shower gifts on their offspring throughout the year but really pull out the stops at Christmas. Mommy and Daddy living apart may buy twice as many gifts for their children. When one or both of the divorced spouses remarrys, more gifts flow.

Toy executives know that children's tastes could again change, just as they did with video games. This year's conquering robots could be unwanted tomorrow. But that is the business. Says Tom West, marketing manager of Ceji-Revell of Venice, Calif.: "There's a robot market now, but will there be one in a few years? You buy heavy, go for the gold, get in while it's lot. These frenzies overdo themselves, then peter out." For now that has yet to happen. Grandparents can try to give Erector Sets or electric trains, but most children around the tree this year will be transforming GoBots, hugging Care Bears or casting spells with Masters of the Universe.

--By John S. DeMott. Reported by Rosemary Byrnes/New York, with other bureaus

With reporting by Rosemary Byrnes, other bureaus