Midway through last year, as analysts tried to predict where the economy was going, the toy maker Bill Nichols decided he had the answer. He bet that the economy would still be so shaky this holiday season that a bargain-priced plastic toy would take off.
With the help of “mommy bloggers” and a tepid economy, Nichols turned the squishy toys, named Squinkies, into a fad. Walmart.com has been sold out of them for more than a week, and stores nationwide are sold out or limiting how many Squinkies each person can buy. Like Beanie Babies or Zhu Zhu Pets, the toys are collectible – the hundreds of characters include a Lhasa Apso dog and a tiny bride – but they are much cheaper, selling for $10 for a 16-pack.
“Demand is tight,” said Laura Phillips, senior vice president for toys and seasonal merchandising at Walmart. “Mom doesn’t feel bad – ‘I can get into it and my child can really enjoy it,”’ she said. “Absolutely that matters in this economy.”
And children cannot seem to resist scooping up the latest toys, which come in plastic bubbles like a vending machine would dispense, or pronouncing the Squinkies name with glee. (Nichols described it as made up, but one that was “fun, memorable and came off the tongue easy.”)
Nichols’ toy story has defied the odds at a tough time for small manufacturers. His company, Blip Toys, is a 16-person operation in Minnetonka, Minnesota. It faces competition from giants like Mattel and Hasbro with multimillion-dollar advertising budgets. Big retailers, like Toys R Us, Target and Walmart, all want exclusive toys to offer. Independent retailers who might take a chance on smaller manufacturers have all but disappeared.
It is also a dicey time for simple toys, often overshadowed during the holidays by games and gadgets featuring the latest technology. A best-selling toy these days has to reflect market research, sell at a certain price and spur interest from customers even before it is on shelves. But Nichols seems to have a hit on his hands.
“They hit the sweet spot for what’s hot in girls these days,” said Gerrick Johnson, an analyst at BMO Capital Markets. Squinkies are sold out or on back order at many stores, and Nichols is busily expanding the line, with sets for boys based on characters like Spider-Man and new dolls based on Barbie and Hello Kitty.
Nichols began by walking through stores, finding an opening in what’s known as the small-doll aisle, where My Little Pony and Littlest Pet Shop had reigned for years. “All of those brands have been there for a long time, and there’s not a lot of innovation,” he said.
In the eight years since he founded Blip Toys, Nichols has had enough success with novelty items that he can get meetings with Target, Toys R Us and Walmart. From Walmart, he heard that vending-machine concepts were popular in its Japanese division, Seiyu.
Nichols researched the size of the industry. Vending machines sold billions of dollars of goods a year. That sparked the idea for the toys, squishy rubber characters about the size of a knuckle that come in plastic bubbles, like a vending-machine ring or toy would.
Children can also buy play sets, like one that resembles a gumball machine, and insert plastic coins to dispense a Squinkie. “Kids are seeing this every day, when they’re walking into every mall they go to,” he said. “There’s no learning curve.”
Though he was aiming for an affordable toy, he also wanted to make them collectible, like last year’s hit toy, the plush hamsters called Zhu Zhu Pets. Blip created hundreds of characters, and each package of Squinkies includes at least four characters. “With one purchase the child will become an instant collector,” he said.
Johnson, the toy analyst, said that was a smart approach. “You’re creating a reason for kids to go out and buy more,” he said.
Nichols presented his ideas to the three major toy retailers last December. Rather than having a toy sculptor create samples, he had a factory in China produce and spray-paint the dolls, to prove that this could be done at a low price. Asked if Walmart executives thought it could be done well at the small scale, “we didn’t,” said Phillips, the Walmart executive in charge of toys. “But he really worked hard on the execution.”
The retailers liked the Squinkies well enough. “The orders were good, but nothing like what we anticipated this could be,” Nichols said. He knew the retailers would test it in August. To pique interest before Squinkies were even on sale anywhere, he reached out to more than 300 bloggers, sending them products for review and giveaways.
Anne McGowan, who runs the blog DealWiseMommy.net, said her son and her nieces understood what the toy was right away, from playing with vending machines in restaurants. And she was relieved at the low price. “That’s one of the best things about the toy: They’re not very expensive,” McGowan said.
In Waterloo, Ontario, Erica Kloetstra, who runs BassGiraffe.com, said the collectible angle pulled in her 4-year-old daughter. “She’s like ‘Now we have to get this, and this, and that.’ That’s why we have so many,” she said.
While tiny toys can be choking hazards, the retailers and Blip emphasize that the toys are for children age 4 and up. And bloggers noted the same. “Due to the small size, my son (who is 2) has placed them in his mouth,” Amanda Blake, who runs FairyGoodMommy.com, wrote, saying that her older daughter now plays with them in her own room. “I do not recommend anyone under the age listed on the package to play with them or have them lying around.”
“Mommy bloggers are incredibly powerful,” said Phillips of Walmart, in part because they explain to their readers what a toy does or what age it’s appropriate for. “Just getting customers aware of what they are, how do they work, what do I do with them” is quite helpful, Phillips said.
When the toy hit shelves in August, “the read was fantastic,” she said.
At Target, “we reacted quickly to meet that ongoing demand,” Casey Carl, who oversees toys and sporting goods for Target, said in an e-mail. Target even created a special in-store display to highlight the Squinkies.
“The initial sales came in so far above plan, it was just amazing,” said Nichols, who declined to specify how many Squinkies had sold over all. The retailers all raised their orders. But, with a 60-day turnaround, Nichols couldn’t get the product back in stock quickly enough.
Nichols said he was rushing Squinkies to stores to ride this holiday wave while it lasted.
“Kids move on very quickly,” he said.