TFE/TFE Licensing, October 2020

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FEATURED CONTENT State of the Industry, continued exhibit in Hong Kong, “but that is dependent on other factors, including what buyers would go.” Moose Toys continues to monitor the latest news and government guidance, and will “make a call on what is best for Moose and all the team involved as we approach the end of the year,” Frankowski said. Foreman said Basic Fun does not plan to see customers in January, as he doesn’t “expect any customers to be able to travel to Hong Kong or China on traditional buying trips until mid to late 2021.” WowWee anticipates it will exhibit in Hong Kong “to a small degree,” Sufer said. “We don’t expect a lot of customers to be traveling at that time. [The] door is certainly open to this if business travel picks up, and travel restrictions ease,” he said. “However, currently there is a two-week quarantine for travelers visiting Hong Kong, which for most will be a showstopper.” Still, the consensus seems to be that manufacturers are eager to get back to in-person trade shows as soon as they believe it is safe and feasible to do so. Rad explained that Abacus Brands’ science and activity kits for children, which incorporate virtual and augmented reality features, are well-suited to hands-on demonstrations. “As a newer brand coming to market in 2020, we know how important it is to capture the in-person energy with our buyers,” he said. “Our product is experiential and has a real ‘wow factor’ aspect to it when meeting and testing it in person, so it can be challenging to demonstrate how immersive our edu-toy is to new eyes through a virtual meeting. With that said, we’re getting the same meetings with everyone that we met at New York Toy Fair who loved it.” Wann also underscored the long-term challenges of not being able to introduce product in a face-to-face setting. “Trying to create electricity and excitedment is still difficult when you’ve lost the touch and feel part of the business,” he said. “You can’t show product, touch product, experience product in the same way, and we really value the excitement of that, and even more importantly, the incredibly useful and relevant feedback our retailers provide that help us make product even better.” He added, “Virtual shows will not replace in-person shows, but rather the future will, and should, include a combination of both!” Familiar faces Manufacturers observed that retailers and consumers this year are gravitating toward familiar, trusted, and timeless brands and products. For consumers, these toys and games can provide a sense of comfort

in an uncertain time. “People have been looking for ways to engage and entertain their families at home, and this has, in particular, benefited classic, trusted brands and products based on classic time-proven play patterns,” Wann said. According to Rekedal, “with licenses pushing out, we have seen a renewed interest from our retail partners in expanding into dependable, evergreen brands like Breyer and The Big Dig.” Foreman said that Basic Fun will “focus more on brands and licenses that are already known by the consumer than brands that are launched from scratch.” “I imagine that online previews and trade shows will favor extensions of continuing lines and known IP, as well as vendors that are known by the retailer. I’d assume it would be hard to get a new line in front of a buyer this season,” he said. E-Commerce explodes Unsurprisingly, the pandemic has fast tracked the toy industry’s shift to e-commerce as many shoppers continue to avoid in-person shopping. Henderson said that when shoppers do make trips to the store, Spin Master anticipates that they will be shorter, “more mission-focused trips, potentially without kids, and fewer opportunities for impulse purchases in store.” As customers transition to shopping online, Henderson said “we are seeing more parent-driven decision-making.” “We expect the shift to e-commerce to continue as many customers who set up accounts with online retailers will likely find it easier to continue buying online,” she added. According to Frankowski, “e-commerce captured an incredible 15% market share gain in Q2 2020, versus the same quarter last year.” As a result, Moose Toys has observed “all retailers, even those traditionally weighted almost exclusively to brick and mortar, shifting their focus to online. Accordingly, we reweight our marketing mix in this direction as well, where it makes sense for specific brands.” Nyman said that the importance of digital content and e-commerce platforms is a “key strategic focus” for Hasbro, and the industry as a whole, through 2021. “In a very short space of time, access to entertainment and retail via digital platforms really accelerated at an unprecendented rate, and given the uncertainty surrounding the next year, that’s something we need to be mindful of in every aspect of the business,” he said.

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