Michael Albert, President and CEO of TCG Toys, discusses the company’s licensing explosion and predictions for the future in this extended edition of The Toy Book’s 2023 State of the Industry Q&A roundtable. Want more insight from the all-stars of the toy industry? Click here to explore this year’s lineup!
The Toy Book: What are your overall predictions for the state of the toy industry at retail this year?
Michael Albert: It’s been a really interesting time for the toy industry overall, and seasoned companies like TCG Toys are not immune to the craziness. I’d call it a nail-biter to see what will happen over the next 9-12 months, watching the roller coaster happening at retail and throughout the global economy. There’s a tremendous glut of inventory still at retail and equally so excess inventory, which is being liquidated in warehouses of all major companies that needs to get absorbed before things normalize. I suspect we will feel the continuing ripple effects of the pandemic, potentially for some time to come.
Consumers are facing inflationary pressures in every facet of their lives, and we’re all really feeling it. From the costs of food to household basics to toys and travel, interest rates will continue to be a challenge for both consumers and manufacturers. The good news is, that sentiment bodes well for a company like TCG Toys where great quality and good value products are a core part of our DNA. We have always been a leader in value versus flashy.
From a development standpoint, we will take a cautiously optimistic and somewhat conservative approach, however, we believe in our product lines and strategy, and we understand that retailers and consumers want newness and innovation. We’re not just going to sit back and ride out the wave. We are in this game and will continue to innovate against our core categories with an incredible roster of beloved, popular licenses. We’ll leverage their notoriety and offer price points we think will be appealing to families and adult collectors feeling the crunch. Especially with the economy being where it is, people will continue to buy toys for their kids, but they’re likely going to spend $20 instead of $50 for a gift or $5 instead of $20 for an impulse buy. That’s where we’ll focus.
TB: TCG Toy’s product assortment has expanded over the years to include toys, puzzles, and games for the entire family. How have licensing partnerships with other toy companies and IP holders helped to grow the business at TCG?
MA: Licensing has been a game changer for us. The bulk of our portfolio and assortments have stayed true to our core competencies in games, puzzles, and other evergreen playthings for both kids and adults, and at the same time, TCG Toys has also evolved over the years into some new categories, like Puppet Pals and Bend-Ems. All of them have benefited from licensing. We’ve had a sizable expansion in wooden toys, like puzzles based on licenses like Little Tikes, Blue’s Clues & You, Peppa Pig, Thomas, Barbie, Little People, and Cocomelon.
With our new puppet segment and Bend-Ems, licenses are of paramount importance and driving excitement and new customers for those categories. The expansion exposes us to new selling aisles and new marketing opportunities like reaching fandoms at comic cons. The initial retail results have been well beyond anything we imagined so far and the excitement for this brand is global.
We also think we have a niche and huge opportunity to grow by focusing on value-driven and well-priced licensed toys with popular characters that are an organic fit for the categories we’re securing them for. For example, Barbie, Hot Wheels, and Cocomelon playmats for children are a no-brainer for developing and curious young minds to get them moving and playing. We love to see the continuing explosion of kidults as a core consumer. They love collecting Bend-Ems, playing games, and puzzling. So much merchandise is being consumed by adults, whether it be adult collectors or even seniors who stay sharp playing mind games, like the “What’s the Meaning of Life Game” based on our license for LIFE Magazine. Spin Flip is a puzzle and has a fidget aspect to it and is working extremely well with this kid-at-heart market. Kidults are a key sweet spot, and our puzzles and games segment offers great potential for growth.
Licensing provides multiple benefits for TCG Toys. We’re investing in aligning with top brands. While it’s not a guaranteed home run, it’s definitely an insurance policy if we choose correctly that there will be some built-in acceptance from retailers and demand from consumers. Our strategy will be to balance evergreen licenses with a few that are new, being careful not to overwhelm our assortments, retailers, and consumers with too many of them. There’s only so much shelf space!
A version of this Q&A was originally published in the 2023 edition of The BIG Toy Book. Click here to read the full issue! Want to receive The Toy Book in print? Click here for subscription options!
