#Shoptalk19: Mattel responds to Toys R Us closures with eCommerce and localised growth

While the closure of Toys R Us last year was seen as a wake-up call for the retail industry to keep innovating to retain today’s digitally-minded consumer, no one felt the demise of the retailer quite like Mattel.

The $5 billion toy manufacturer, best known for brands including Barbie, Fisher Price, Hot Wheels and American Girl, overnight saw the shuttering of stores which represented around 8% of Mattel’s business.

“We’re optimistic about retail landscape, despite the fact there’s been turmoil and we’ve been subject to a lot of it with Toys R Us,” president and COO of Mattel, Richard Dickson, told delegates at Shoptalk 2019 in Las Vegas.

“Essentially as long as we create the demand and interest in our product, consumers can shop from anywhere. eCommerce is a growing outlet for us, but it’s a way of life [for customers].”

In fact, strong growth from its Barbie and Hot Wheels brands helped Mattel post better-than-expected golden quarter results, while brands aimed at younger children like Fisher Price were greatly impacted by the Toys R Us liquidation.

Dickson described how the company has recently converted itself into a “much more digitally orientated organisation” in Europe and Asia, where eCommerce is now “growing disproportionately” compared to the rest of the world.

He said the manufacturer had to hire more talent to understand the impact of digital at a local level.

“You have to empower your local markets to react quickly, using social, influencers and different PR campaigns you can only get locally,” he said. “If you don’t empower your local markets you run risks.”

A portfolio company

The company also revealed a drop in sales of its American Girl products over the 2018 Christmas season, which is something Dickson wants to turnaround by improving both the product and store experience. While 50% of American Girl sales are made online, Dickson said the consumer experience could be better and the company is working on improving that also. And with a movie in the works, Mattel will be sure to capitalise on this and put the 38-year-old brand back into the spotlight.

In fact, movie franchising is one direction the company is thinking seriously about, with a Barbie movie starring Margot Robbie also in the pipeline.

“Entertainment, theatre, live action, animation, digital gaming, apps, consumer products, live events, Broadway shows – the real unlock for the long term is looking at Mattel as a portfolio and an intellectual property company with one of the most recognised portfolios in the world.”