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Good Things Come in Smart Packages

by Nancy Lees

Despite the old adage about not judging a book by its cover, the simple fact is that most consumers do it everyday. And kids retail shelf space, in particular, has become so crowded over the last few years that a product's outer trappings often make or break it in stores. So licensors and manufacturers alike have been forced to think a lot harder about the box, investing in product packaging with a little something extra to make kid browsers zero in on their SKUs.

According to Kevin Curran, senior VP and GM of Fisher-Price Friends (the division that handles all of FP's licensed toys), the effort is crucial. The company has found through recent research that more than half of all toy purchase decisions are made while the consumer is in the store, meaning that packaging plays a role in closing sales. And Matt Nuccio, creative director of Merrick, New York-based packaging studio Design Edge, says many of his clients (which include Mattel, Hasbro and Fisher-Price) are putting a lot more money and time into package design than they used to - and that's no mean feat in such a rapidly moving, trend-driven business.

Michael Bernstein, senior VP of marketing for boys toys at Malibu, California's Jakks Pacific, says several companies seem to have stepped up their packaging game this year, at times investing as heavily in the trappings as in the product. "It used to be just the majors that were able to do creative packaging, because it does come at an expense. But I was amazed to see how many small companies have really pushed the envelope this year in terms of structure, quality and graphics."

In fact, depending on the product and the sophistication of the design, packaging today can represent anywhere from 15% to 50% of the overall product cost. Toy package designs tend to be more expensive and complicated than categories like room décor or apparel, and a typical outsourced package design program can run anywhere from US$15,000 to US$25,000. It's also worth noting that companies launching major new brands sometimes spend in the hundreds of thousands.

Package Before Product? Assessing the Style Guide

But manufacturers aren't the only ones intensifying their packaging strategy. Toy Quest product manager Tara Cortner says over the last five years, the licensors her company deals with have become much more focused on branding and presenting a consistent look across all categories at retail. She adds that more licensors are looking to get in on the ground floor when it comes to package design decisions - which was relatively rare five years ago.

Debra Joester, president of New York licensing agency The Joester Loria Group, agrees that in such a competitive environment, it's more important than ever for licensors to be involved in all aspects of packaging decisions. This means going beyond just the size and placement of logos, to participating in choices regarding color, shape, graphics and much more. But in order to do this successfully, licensors need to be constantly monitoring the market and their competition to see what works and what doesn't.

After that, it's about getting input, being flexible and, most importantly, listening to your licensee. "[Each licensee] has unique needs in terms of their consumer and how the box needs to be displayed, and you can't just shove them into a one-size-fits-all strategy," she says. American Greetings, which owns the Care Bears IP, has a huge art department and its own packaging arm, giving the company an advantage when it comes to finessing a package. But Joester says licensees are always at the table when the style guide is created to make sure there's nothing unique to their sectors that's being missed.

This includes looking at whether the text and graphics are designed to appeal to the main buyer. Since parents or grandparents are most likely to purchase preschool products, for example, packaging should have clear information about what the toy does. Packaging geared at an eight-year-old boy, on the other hand, should have lots going on, without coming off as too text-heavy.

Eric Stein, VP of licensing for Taffy Entertainment, the merch arm of L.A. prodco Mike Young Productions, likes to come in early with a style guide on packaging designs, but he prefers to give his licensees full rein and then cut back if necessary. In some cases, Stein believes style guides can become too restrictive. "If you just trust your artists, they might end up bringing a lot more to the concept than you even dreamed," he says. For example, when licensee Fast Forward created a backpack for the Pet Alien line, it added actual working lights to tech up a fairly basic lighthouse design.

Taffy is working closely with licensees such as JEM Sportswear, Jay Franco & Sons and Fisher-Price to build play apps based on elements of its TV shows into product packaging without hiking up costs. Ideas that are currently on the table include a clothing hangtag that's also a trading card, and a shoebox that's graphically sophisticated enough for kids to want to use it for storage. For Pet Alien (a 26 x 22-minute toon that premiered in January on Cartoon Network), the company plans to play up one of the key settings in the series, the lighthouse, as a graphic element to tie the entire merch line together. And so items like playsets from the company's yet-to-be-announced master toy licensee might come in a lighthouse-shaped box that could also be used as a play backdrop.

There are no hard-and-fast rules as to what can be done in packaging, but Nuccio stresses that the package has to actually make sense for and serve the product. It sounds like a no-brainer, but he says you'd be surprised how many companies miss the mark. Many manufacturers will attempt to create a try-me package even when it's not a good fit or doesn't reflect what the product actually does. For example, lots of try-mes are not prominently advertised on the box, or the packaging doesn't have enough range of motion to allow the product to show to its fullest potential.

Fisher-Price grappled with that very issue when it was designing a box for Tumble Time Tigger, a cartwheeling electronic plush that's due out this fall. The company invented a plastic armature that's stable enough for the toy to spin on when it's in the package, but snaps off easily when it's taken out. While it represented a hefty investment for a package, Curran says it's all about effectively communicating what the toy does. "There's a balance between ads and packaging in terms of where we make our investment, and in this case, we chose to invest a bit more in the packaging side."

Retail Recon

The first step in designing effective packaging is heading to the toy aisle to find out what sort of space is available, and what everyone else is doing in that space. Standing out from the crowd is usually a good thing, but Nuccio warns that being too different can be a double-edged sword of sorts. "If everybody's boxed and you decide to do a blister card for the sake of looking unique, that might be a terrible idea if there's no place to hang the item. Or it might be a great idea if it can be hung as an endcap item."

Toy Quest's Cortner agrees that keeping an eye on your aisle is critical, especially in crowded categories like dolls and action figures - even a simple change, such as having a blue package in a sea of girl-targeted pink, can make a world of difference. The doll sector, in particular, has undergone a major packaging evolution over the last five years, as manufacturers have moved far away from the plain pink cardboard window boxes of yore. These days, unique box construction with details like injection-molded pieces and plastic handles is common, as are floating pieces of cardboard with callouts on them and cardboard cutouts of the dolls interacting with playsets. Expensive printing processes like foil stamping and window printing are also much more prevalent now.

Design Decisions

Most toycos rely primarily on quantitative research and focus groups when designing their packaging, but the ultimate test always takes place on-shelf. Canuck construction toy manufacturer Mega Bloks learned that lesson when it made the simple decision to release two different packages - one featuring a girl more prominently on the front, and the other a boy - for its preschool-targeted Maxi Bloks bags. The resulting 20% sales increase came as a bit of a surprise. "We tried to highlight builds that would interest girls in order to position our bags as appealing to both demos," says marketing director Andrew Witkin. "It led to huge growth in a category that was flat overall." That boost was all the impetus the company needed to launch several new girl-targeted SKUs in 2004, starting with a line of Disney Princesses licensed buckets. Toy Quest has also found that a small tweak can make a huge difference.

When it released its Spider-Man 2 N-Vision TV game last year, the box had a fifth panel flap that flipped up to reveal a window box. While the product moved relatively well this way, Cortner says one retailer asked for a box without the extra flap, and it quickly sold out. The competing systems in the aisle were in regular window boxes, and when presented with the option, customers simply didn't want to take the time to open an extra flap. Toy Quest has chosen to stick with window boxes for all TV games that have rolled out since then, but the company has added diorama-like cardboard cutouts in molded plastic blisters in order to stand out from the competition.

Opening up a package - so the actual product is visible in the box - can also make a huge difference. Three years ago, Fisher-Price changed the packaging for its 37-year-old Little People line, moving from a closed square box to an open package. Since then, the line has experienced a percentage sales increase in the high teens.

Joester says having an open package can also highlight a toy's added value. The packaging for the Care Bears Smart Check-Up Bear by Play Along, which is hitting shelves in the fall, allows people to see exactly how many extras and accessories come with the bear, including a stethoscope, syringe
and bandages.

Jakks has been working to push the envelope in packaging, spending as much as 10% more on average and focusing on its boy-targeted ranges. One good example is an August-launching Fly Wheels line featuring licensed wheels that are revved up with a ripcord and can perform stunts at speeds of up to 30 MPH. Bernstein spent three months in China trying to design a try-me package design that could accurately demonstrate the speed and power of the product without falling apart under the stress. "The packaging was almost as difficult to figure out as the product itself," he says, adding that the biggest roadblock was finding the balance between performance and cost. The winning design was a pegged blister pack that allows the wheel to spin freely inside when the ripcord is pulled.

Cost efficiency is a much bigger challenge now that rising oil prices have sparked a significant increase in the price of packages that rely heavily on plastic, such as clamshell and blister packs. In response, leading toycos are having to weigh price increases over cutting corners in production. "We're trying to think creatively about what we can do to offset this problem," says Bernstein, "asking, for example, if we really need that star on an action figure's sleeve called out. There are lots of things you can do to the product that 98% of consumers won't even notice." But while the increased cost is influencing decisions, Bernstein maintains that the drive to showcase product in unique packaging is paramount.

Toy Quest's Cortner says the manufacturer will always absorb a packaging cost increase, but that there are ways to get around it. In many cases, particularly if the package can be used as storage (a popular strategy in the craft aisle), customers are willing to pay a bit more.

Try-Me Packaging V2.0

Probably the biggest on-shelf innovation the industry has embraced in the last decade is the try-me package. Cheaper technology and computer chips have bred more and more toys with complex electronic components. But as products become more abstract and multi-purposed, it gets harder to communicate their functionality in print, making a hands-on demonstration absolutely essential. Fisher-Price Friends only had a handful of try-me packages in its line five years ago, but now Curran says virtually all the company's packaging has some kind of try-me element to it. Try-me is particularly important when you're dealing with character licenses, he adds, because hearing a character's voice can be an overwhelming selling point. "For the price of a couple of AA batteries, the character can actually speak on the store shelf. That's a very cost-efficient way to bring them alive."

But there are pitfalls to the try-me approach, the biggest of which is battery life - there has to be enough juice to keep the character talking and moving properly in-store.

Toronto, Canada-based Thinkway Toys is powering up its packaging this fall with a line of Batman, Spider-Man, Teen Titans and Toy Story M.A.G. (motion activated gear) TV games featuring a new hook called video-in-a-box. When the try-me button is pushed, a narrator's voice explains how the game works in tandem with three or four panels that light up in sequence. The box even vibrates to simulate a hit. The technology is housed in the toy itself, which is hooked up to the box by a wire. "It's a true interactive experience for the customer," says John Barton, senior VP of sales and marketing. "This is like putting a commercial right inside the box."

Though the video-in-a-box technology was developed years ago, it was initially too expensive for the mass market. A drop in tech costs of about 75% over the last three years has finally allowed Thinkway to gear it up this year, and the company plans to launch a separate division to sell the patent to third parties for use in a broad range of packaging and promotional initiatives.