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Stores hope that new smaller toys can keep shoppers coming back for more all year

By Paul Ziobro 

Tiny collectibles including Shopkins, Num Noms and Tsum Tsum are helping toy retailers solve an age-old problem: how to get people into their stores year round, not just at Christmas.

Sales of these and similar toys logged just $142 million in sales through September, a small slice of the roughly $25 billion U.S. toy industry, according to market researcher NPD Group, yet the products are having an outsize influence in helping retailers get shoppers into their stores.

With their low price points -- packs generally are priced between $2 and $5 -- and collectible nature, retailers say that shoppers return multiple times as they, for instance, search for a Cupcake Princess character to complete their latest Shopkins series.

"A toy might be $20 and you're one and done," said Richard Barry, chief merchant at Toys "R" Us Inc. "Whereas with a collectible brand, it might be multiple, multiple trips."

These toys also are bringing shoppers into stores throughout the year, something needed in an industry that crowds about half of its annual sales in the months surrounding Christmas. Most are sold in so-called blind packs that don't let buyers see what characters are inside. For instance, Walt Disney Co. releases a new Disney character in a Tsum Tsum form on the first Tuesday of each month, which can cause spikes of up to 250,000 items sold at its Disney Stores.

Ashlee Pipkens-Smith of Avon Park, Fla., said she buys Shopkins and other blind-bag toys for her three children during most shopping trips. "If we're at any store that sell them, they think they're getting one," she said. On the plus side, she added, "when you get them something small, you don't have to get them bigger toys until Christmas."

Unlike pricier popular toys, which succumb to discounting as retailers use them to woo shoppers, blind packs hold their price at a few bucks a pop, keeping profits steady. Retailers are responding by devoting more shelf space to collectibles. More brands are launching blind packs featuring characters from children's movies such as "Minions" or based on established toys such as Legos.

NPD toy industry analyst Juli Lennett said the proliferation of small collectibles has room to grow, although some of the earlier established brands, such as Shopkins, may lose share as the shelves get more crowded. "Because there are so many choices, sales will be more fragmented among a variety of brands," Ms. Lennett said.

This new wave of collectible characters was spawned by Australian toy maker Moose Enterprise and its line of Shopkins figures. Moose has been around since 1985, and sold small collectibles called Mighty Beanz in the U.S. more than a decade ago. But Shopkins put the privately held toy company on the map in 2014.

The inch-tall, anthropomorphic figures are simple and based on items found in supermarkets, like Tommy Ketchup and Nutty Butter. With expansions into larger dolls, play sets and licensing to accessories and apparel, Shopkins has logged more than $1 billion in sales.

"When we launched, we were told that this won't last past Christmas," Moose co-Chief Executive Paul Solomon said. "Three years on, it's hot, if not hotter, than it has been."

Other manufacturers quickly followed. Some were entirely new brands, such as MGA Entertainment Inc.'s Num Noms and Mattel Inc.'s My MixieQ's. Others created collectible lines for existing brands, such as My Little Pony, or larger toys, like Funrise Inc.'s new Tonka Tinys trucks.

Boca Raton, Fla.-based Just Play LLC says it is aiming to add a line of collectible figures for any character-based toys it sells, including ones based on Disney Junior channel shows such as "The Lion Guard" and "Doc McStuffins."

Charlie Emby, co-president of Just Play, said the lower price points help attract lower-income shoppers or those unwilling to spend more on pricier toys. "We want to make sure we're offering a solid product mix to all economic levels," Mr. Emby said.

Write to Paul Ziobro at Paul.Ziobro@wsj.com

(END) Dow Jones Newswires

December 10, 2016 02:48 ET (07:48 GMT)

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