Company Profile - Mattel

Hitting the top spot

Mattel enters 2022 off the back of yet another strong year, with brands Barbie and Hot Wheels continuing to lead the way on product, new content coming through for Thomas & Friends and a major movie slate to look forward to. Just before Christmas, Toy World sat down with Michael Hick, vice president and country manager, UK and Ireland, and Kelly Philp, UK marketing director, to look back over 2021 and find out what comes next.

Michael Hick

Kelly Philp

We’re starting a new year, but let’s start our interview by talking about the previous one. How was 2021 for Mattel?

Michael: We’re very pleased with how we executed 2021: Mattel had a plan in January, and I feel as though we’ve seen that plan through to fruition. As we are speaking to you in later November, NPD has the toy market down -5% whereas Mattel is only down -2%, meaning we’re outperforming the market. And when you hold Mattel up against its big competitors, we are one of only two manufacturers in the Top 6 growing market share.

For the first time since I can remember Barbie is the No.1 brand in the toy industry: not the No.1 Fashion Doll – the No.1 brand. Mattel also has the No.1 item in Value and Units in Hot Wheels die cast, though Barbie Dreamhouse is nipping at its heels at No.2. Mattel is really pleased with this position, especially so close to Christmas.

In 2021, the company focused on two main things: firstly, on our innovative demand creation strategy, whether that be from a brand or customer marketing point of view, and secondly, on maintaining our position as the toy partner of choice for both licensors and retailers. Our retail partners are providing some great feedback despite their fair share of challenges, and those challenges look likely to continue into Q1 and Q2. Shoppers seemed to be doing their Christmas shopping later than they did in 2020, when a lockdown was imminent, and uncertainty remains about what comes next. In summary, Mattel is in a strong position and continues to overinvest in its categories and brands.

We’ve certainly been hearing from retailers that Barbie has been a standout brand, which tallies with what you’re telling us. What’s behind this success?

Kelly: Barbie is a purposeful brand with a clear consumer message regarding what she stands for in today’s world. There were several standout Barbie moments in 2021. We know her fans love new content, so the Big City, Big Dreams tentpole and the way the movie was brought to life at retail provided something really exciting, both in terms of content and product. Mattel also tapped into important cultural moments. Last year we released a Barbie in the likeness of vaccinologist Professor Dame Sarah Gilbert. Barbie is culturally relevant, and this had a positive impact on the brand’s performance. Barbie has always been a staple within the fashion doll space, but she’s now holding her own across the entire toy space.

And what about Hot Wheels – what’s driving that brand?

Kelly: Vehicles as a play pattern hasn’t changed, but Hot Wheels product development continues to bring fresh variations on this classic theme to life. Our innovations are based on what we know works, be that the ‘crash and bash’ play offered by Track Builder or the more imaginative play inherent in City. We’re also broadening the opportunities offered by Hot Wheels outside of the kids’ space. At the end of 2021, the UK entered the global Hot Wheels Legends tour for the first time, and Lee Johnstone’s Volvo P1800 Gasser ended up winning. Hot Wheels, like Barbie, appeals across a wide range of different ages and here at Mattel we’re tapping into that depth and breadth of passion with our product development and marketing.

Michael: I want to mention Polly Pocket too. This brand has done incredibly well over the last couple of years. She’s a tiny rockstar within our portfolio and worthy of a mention.

We’re sure that, like most companies, Mattel has had its fair share of hurdles to overcome over the past 12 months. How has the company met and mitigated these?

Michael: Mattel performed well from a supply chain perspective. Globally, our aim was to mitigate the risk of supply chain issues as much as possible, and of course it’s been tricky. I strongly believe in being open and honest with our retail partners. Many retailers are in the same boat and there’s nothing to be gained by letting communication falter. We’ve had to tweak our plans here and there due to inventory coming in later than planned, but on the whole we’re pleased.

Cost pricing is another area we’re keeping a close eye on. While we’re doing everything in our power to lessen the impact rises might have on our retail partners and we sometimes need to adjust costs, but we always keep consumers in mind.

How has Mattel been supporting its retail partners, and what might this support look like going forward?

Michael: Firstly, we make sure we have tight business plans with all our strategic partners, each of which is treated very differently according to their consumer base and needs. Mattel works closely with its retail partners to ensure we’re aligned on KPIs and vision, and that’s what makes the company a best-in-class supplier. Sometimes being a good partner can be as simple as being at the other end of the phone, ready to help with any issues that may arise by putting forward solutions quickly and transparently. There were many such conversations at the tail end of last year, but being open, building trust and overcoming problems only makes relationships stronger.

Coming into 2022, what do you think are the biggest opportunities on the horizon?

Michael: Well, there’s more than a few movies coming through. The toy industry has done surprisingly well over the last two years with low levels of new content and brands. It’s really had to lean into core, evergreen brands, and while it hasn’t disappointed on that front, I am really looking forward to seeing new films, TV series and brands. Mattel is obviously thrilled to be a licensing partner for some of the most exciting feature films due to hit the big screen – The Batman, Minions: The Rise of Gru, Lightyear and Jurassic World: Dominion amongst others. We’ve got product partnerships in place for the biggest movies of the summer in addition to our core brands, and we believe that puts us in a strong position.

Mattel has also partnered with 9 Story Media on Karma’s World, created by Ludicrous. This is a Netflix based content programme that we’ll be bringing to life in toys. We’re also producing toys based on Tiny Pop’s Gus, the Itsy Bitsy Knight, which will introduce a new core pre-school thematic. And, of course, we have our own content development slate with 14 films in development as well as 13 TV shows/specials, and 30 more projects in the pipeline.

If everything goes according to plan, and if the world around us returns to something resembling normality, content-based family experiences will form a large part of 2022, and Mattel is delighted to be at the heart of many of those plans.

What would you say are Mattel’s unique selling points as a licensee?

Michael: Mattel works closely with licensors to identify and track down opportunities as they arise. Challenges are tackled head on in a collaborative manner, which our partners recognise and appreciate. We have huge scale globally with impressive manufacturing capabilities, and we produce quality, innovative toys that consumers love. Mattel is lucky to boast the design team it does: the licensed products we’re launching (and the unlicensed too, of course) really are second to none.

You mentioned new content for Thomas & Friends earlier. Can you tell us more?

Kelly: Thomas & Friends has so much heritage and a huge fanbase within the UK, so I’m excited to see the brand enter its next phase. This is very much anchored in what kids today find exciting, but also remains true to what makes Thomas the brand it is – teamwork and friendship. Viewers will see all the best parts of Thomas throughout the content, just in a new way. The All Engines Go series launched on Milkshake! in November. We’ve seen great ratings so far and an immediate POS uplift. This trend should continue with the launch of the new product line this month.

The pivoted Thomas direction stems from the summer cinematic release of Race for the Sodor Cup, so we’ve known for a while that this transition would be taking place and have a solid plan to ensure its success. Early indicators suggest that it’s the right move for the brand and that it’s hitting the spot with consumers.

How is Mattel approaching the marketing space over the coming months?

Kelly: I’m always talking to the Mattel sales team and others in the marketing arena about how the space is changing on what feels like a day-to-day basis. Credit must go to the Mattel marketing team, which is doing a superb job keeping pace with a rapidly shifting landscape. TV remains a staple, but when you dig into the kids’ space you see that that ecosystem is becoming more and more complex.

Gaming is great for Mattel, not only from a product development perspective, with properties like Minecraft and Pokémon, but also as a place to target our audiences. YouTube has become an everyday platform for many kids, and so naturally must become an everyday part of our marketing. Complexity arises when you’re talking to a consumer that might be three, four or five years old, say, knowing the person actually buying the toy is an adult parent or gift-giver. In that space, we need to build campaigns around mobile, social and audio elements. The Mattel ethos is very much to invest in where the consumers are, in many cases to overinvest, and to dial into new spaces as early as possible to get an advantage in emerging landscapes.

Speaking of ethos, Mattel has previously spoken of its intention to increase its slice of the toy market ‘pie’ while also making the pie itself bigger. Is it fair to say this is still the company’s approach to business?

Kelly: Absolutely. Mattel is a marketing-led organisation and is a massive investor in the space, which keeps consumers buying toys. From the company’s point of view, the hope is that those consumers think of Mattel as their go-to for toys, but a side effect of our overinvestment is that we drive growth in the areas Mattel is biggest in: Dolls, Vehicles and Pre-School. This benefits our retail partners and licensing partners alike. We don’t view the market just through a Mattel lens.

How willing have retailers and buyers been to visit your showroom in person?

Michael: In the first couple of weeks after we opened visitors were lining up to pay us a visit, but then Omicron was announced and we saw a few take a step back, either pushing back their appointment or opting for a digital preview instead. And we did see people becoming more cautious as Christmas got closer. The nice thing is that we have that flexibility and adaptability; we can accommodate our customers however they would prefer. No one needs to miss out.

Earlier we spoke about the opportunities presented by 2022, but what about the challenges that lie ahead?

Michael: I like to think that the major challenges we experienced during the back end of 2021 are fading - the pandemic, supply chain disruption, cost pricing etc. - but inflation remains an issue. I think there’s some macro-economic issues lurking with universal credit, disposable income, fuel prices etc., all of which would suggest some groups within our society may face their own challenges.

However, the toy industry itself is incredible resilient during tough times and even if the wider economy struggles on spending, our professional community will come through it. After the two years we’ve all had, I really would like to think sunnier days lie ahead. If it was a low movie year, I might be worried, but there are so many movies coming through and, now more than ever, families understand what makes toys so special. In focus groups, parents are talking about how important physical play is to child wellbeing and development and toys will therefore remain a vital purchase for families. It’s also worth bearing in mind that Christmas 2021 saw a lot of grandparents reunited with grandkids they perhaps haven’t seen for a while; they would have been able to watch as that child opened toys on Christmas Day and be reminded of how important they are.

We’ve talked about Mattel’s new content, but what can you tell us about new product for 2022?

Kelly: As you might expect, there’s plenty of exciting new product on the way from across our entire portfolio. Starting with the youngest age ranges, our Fisher-Price Rainbow Showers Bedside Mobile and 1-2-3 Crawl with Me Puppy will be key items in the infant space. Thomas, as mentioned earlier, will have a whole new look. We’re launching a Race for the Sodor Cup play set, which will be exciting for fans that enjoyed Mattel’s animated content last year.

In Construction, our Mega Bloks Green Town range taps into the sustainability messaging we have coming through as a business. Mattel has made a number of pledges on sustainability, and these will be reflected this year, both in product and marketing for Barbie, Mega Blocks, Matchbox and more. Uno, meanwhile, welcomes a new gameplay format, Uno Wild, and we’ve also removed all the plastic from our Uno packaging. Mattel Playback, which we launched in 2021, invites consumers to send their preloved toys back to the company to be responsibly recycled. This initiative will be expanded this year with a schools’ programme and more.

Barbie Dreamtopia is launching a new Twinkle Lights Mermaid: this is a proven platform for us but as Michael said earlier, we’re always looking for new opportunities. We entered the Nurturing Dolls space in 2021 with My Garden Baby, and we’ll be expanding that with a new thematic and new product.

Michael: We are all very pleased with where Mattel is. There are always areas we look to improve upon and as a team we’re constantly raising the bar. Mattel hasn’t been in such a strong position for a while, and it means we can continue to invest into all the areas we’ve got a presence in. There’s so much going on and plenty more to look forward to.