President’s Letter: Cool in a Crisis – Focused on the Possible

"When nothing is certain, everything is possible"
- Margaret Drabble

December 22, 2020 | The year 2020 challenged every aspect of our lives. As the pandemic spread its human toll and cut a destructive path of economic recession, political upheaval, and interruption of even the most mundane daily tasks, along with all the bad came a heartening focus on family, connection, and human interaction, and the hope of a vaccine and better days ahead. Through it all, toys, games, puzzles, and every form of play provided a renewed sense of joy, as they will continue to do so in the challenging months ahead.

The near- and long-term outlook for the industry remains hopeful. Overall toy and game sales were up some 20 percent through the first three quarters of the year, with strength heading into the vital holiday selling season that portends a positive year on the final tally. Even with such impressive numbers, the sector was exceptionally uneven with some product categories skyrocketing, others plunging while toy companies ran the gamut from selling everything to not selling much at all, with similar stark contrasts across the retail sector.

When the crowds departed Toy Fair New York in February thrilled by a successful sold-out show, we never suspected that just a month later, the Association’s NYC and DC offices would be shuttered or that the closures would carry on for weeks and months without a clear end. Fortunately, we’re blessed with a great team. Your Association’s staff responded immediately, able to work and fully function from home offices. Their working lives became a relentless focus on not dropping a single ball and responding to every need and challenge our members would or could face.

Through it all, including the cancellations of Toy Fair Dallas and the Annual Business Conference; the postponement of Toy Fair New York 2021; and staff furloughs and reductions in benefits, our team didn’t dwell and never relented. Rather, they responded magnificently, with total focus on the possible. They launched essential products and new services, redoubled member outreach, pioneered a digital selling platform and inventive selling opportunities, launched impactful communications programs, defended the industry in the halls of government here at home and around the world, and pivoted philanthropy to help those children most at need.

While I, too, seek to put 2020 distant in the rear-view mirror, rather sharing with you my thoughts on what lies ahead for the business of toys and play in 2021, I’ll get to that in a second report after the holidays and with the promise of a new year. What I will share now, is a look back at a few among countless dozens of actions and innovations The Toy Association team, our board, and volunteer committees drove forward.

Pushing Back on Threats to Your Business

COVID didn’t mean quiet. In 2020, the Toy Association monitored more than 1,000 pieces of state legislation and acted on more than 100 bills with no legislation being enacted that would negatively impact toy companies. Among the most urgent challenges, we secured significant amendments to the New York chemical disclosure program and began working with the NY Department of Environmental Conservation on priority rulemaking issues. Likewise, we tackled key industry issues as a member of the Rule Advisory Committee for the final phase of the Oregon Toxic Free Kids Act rulemaking.

The collection of federal agencies that oversee our industry, Congress, and the administration remained active, offering both challenges and opportunity. Unable to host members on Capitol Hill for an Intellectual Property (IP) Fly-In, The Toy Association went virtual and created a forum for members to meet with more than two dozen congressional offices and hear special presentations from three Members of Congress about key pieces of legislation that help address the wave in illicit counterfeits in the e-commerce space. We followed up with our second IP White Paper outlining industry’s concerns with counterfeits on e-commerce platforms, and re-launched the Congressional Toy Caucus with bi-partisan leadership.

Outside of government, but with huge implications for the future of marketing, we formed working groups to impact the Better Business Bureau’s Children’s Advertising Review Unit’s (CARU) efforts to update children’s advertising guidelines. The international stage demanded we coordinate advocacy efforts with fellow toy trade associations and other partners on 25+ toy regulatory issues in various countries and regions (including Brazil, India, Indonesia, Australia, Korea, European Union, Philippines, Vietnam, Morocco, Saudi Arabia, UAE, and Egypt, among others). We continue to advance advocacy for adoption and recognition of international standards with recent successes in Colombia and Australia, which both now recognize ASTM F963 as acceptable for their countries. We actively supported Asia Toy and Play Association advocacy related to the India Quality Control Order, which resulted in the delay of its implementation until January 2021, while support of the British Toy and Hobby Association resulted in a UK delay of certification requirements until 2022. Finally, a long-suffering tariff issue saw light as we, among many, helped secure a planned reduction in the Brazil toy tariff from 35% to 20% by December 2021.

Helping Members Sell More Products More Often

Toy Fair NY 2020 was the last time the industry gathered in-person. It was memorable from the first minute as Shaquille O’Neill and photographer Mitchel Wu cut the ribbon, while delivering the selling, public relations, news media, financial community, and networking power for which the show is famous.

Toy Fair innovations included the StoryCorps/Generations of Play launch, now with many of the full-length industry icon interviews housed in the Library of Congress, to the expanded Creative Factor programming, with more than 100 speakers providing ongoing support of the inventor/designer community, both domestically and internationally. The show’s first Student Congress saw student attendance of 347 from 34 universities and included a Toy Industry Professional Panel and Innovation & Creativity Workshop hosted by Deej Johnson and Billy Langsworthy from Mojo Nation. Our commitment to pursuing the possible with realistic optimism has Toy Fair New York currently scheduled for May 1 to 4, 2021 and an even bigger and better than ever marketplace in the newly expanded Javits Center set for February 19 to 22, 2022.

The pandemic, combined with The Toy Association's reach, resources, and responsibility to the toy and play community led to the creation of the Toy Fair Everywhere digital wholesale marketplace. Sellers, buyers, distributors, sales reps, media, and other key industry stakeholders were able to refocus their 2020 plans and continue to conduct business. Three successful market weeks saw 209 companies exhibit 847 brands and 33,339 products across 15,041 showroom visits. The site had 736,689 page views, while there were 41,627 buyer visits on exhibitor profiles. Based on this success and looking to 2021 and beyond, the Association is migrating Toy Fair Everywhere to a year-round platform opening in February.

In the absence of in-person events and meetings normally scheduled for fall, the team was nimble in enacting a series of Private Previews for major retailers so the activity usually scheduled for Toy Fair Dallas and elsewhere could continue. Between October and December, seven customized retailer previews were held with Target, Target Plus, Meijer, Toys“R”Us Canada, Family Dollar, Spencer's and Urban Outfitters. More than 130 member companies were among those finalists selected to participate in the preview meetings. Previews will continue, with Claire's scheduled for February 4, 2021.

Creating and Preserving Strong Member Value

In 2020, 159 new members joined The Toy Association, including renowned international retailer, Ikea. Retention likewise remains strong as the team works with each individual member and unique company situation to keep the community together.

We moved immediately to create a COVID-19 resource page on our site that includes toolkits to help manufacturers and retailers navigate the complicated and often confusing government actions impacting their businesses. From the start of the pandemic the membership team was in contact with members to assess the impact of COVID-19 on their individual situations. Appropriate actions were taken to help as many companies as possible navigate successfully through the pandemic. Virtual Town Hall meetings were held in April and May to solicit feedback on the impact of COVID-19 on business and exchange ideas and feedback to help the Association better serve members’ needs.

Going even more digital than ever, we generated 22 webinars. Timely and actionable subjects were covered, including pandemic relief, selling in disruptive times, and guidance on creating greater diversity and inclusion within the industry. Net promoter surveys to measure member satisfaction averaged a score of +56 which is considered excellent on a scale of -100 to +100. We also kept insight, research, data, and Trend Hunter reports flowing, including The NPD Group’s Global Toy Market Report.

The same positives occurred in Canada, as the Canadian Toy Association (CTA) welcomed their first-ever retailer members, Mastermind Toys and Toys”R”Us Canada. With the help of the CTA, the Genius of Play (GOP) was expanded into the Canadian market in July. It kicked off with a television media tour, syndicated articles, and partnerships with key parenting influencers on social media. Canadian traffic to the GOP website quickly increased by 60 percent. As 2020 comes to an end, through the Toys of the North holiday program, Canadian manufacturers donated $265,000 worth of product to children in need in the most remote parts of Canada.

Impactful Communications for a Range of Audiences

Value of play, keeping children safe at play, product safety, regulatory and governmental advocacy, consumer shopping tips, and hot product trends are among the vast range of messages and targets for The Toy Association’s communications.

As the pandemic took root, The Genius of Play (GOP) launched a new PSA campaign designating home as the “Worldwide Headquarters of Play.” Media responded to this uplifting message donating more than $16 million in time and space as well as tens of millions of digital impressions. GOP launched the “Play Today” promotion to reinforce the importance of playing together as a family and provide ideas, which generated 366 media stories plus 22 million social impressions. This was backed with expert advice articles, new “Play & Learn” ideas, and downloadable activities to keep play going at home.

The campaign also pivoted to promote our members. GOP highlighted more than 190 members’ products and Toy of the Year finalists in giveaways on Facebook and Instagram and featured more than 100 members’ toys in the “Cool Toy Picks” section of thegeniusofplay.org. The team also created a new opportunity for member companies to feature their experts in the Expert Advice column on the Genius of Play website.

The Toy of The Year Awards have been reimagined as a virtual show, taking place February 12 and open for free to everyone in the industry as well as the larger audience of toy fans and families worldwide. We revealed the finalists through exclusive announcements by top online influencers, generating over 26 million impressions, and promoted 50 unique finalists in TV segments all over the country reaching viewers during the crucial holiday shopping season.

The Toy Association developed a new “STEAM Toy Assessment Framework” to provide uniform guidelines for the toy industry to create and market STEAM toys. We featured speakers from Mattel, Learning Resources, Klutz, and LeapFrog/Vtech on a panel during the virtual “City of STEM” festival, attended by thousands of families and educators. And we reinforced the connection between play and teaching STEAM with new play-based lesson plans for teachers and expert advice articles on the Genius of Play website.

Safety education remains a steadfast commitment of ours. Our term proactively addressed toy safety and spread awareness about the toy community’s commitment to safe play year-round. Our survey, conducted by Wakefield Research, asked 1,000 U.S. parents about their holiday shopping plans and knowledge of counterfeits sold online, as well as other safety topics, the results of which generated national news reminding parents and other caregivers about how to identify counterfeits and age-appropriate toys ahead of the holiday season. A safe shopping tips article based on the survey and information on the dangers of counterfeits was placed in 1,000 print and online publications nationwide.

Our ongoing and aggressive safety efforts drove another year of notable decline in media interest in the holiday “dangerous toys list” announcements by NGO groups. National groups received about half the number of media placements this year as compared to 2019, while coverage of one announcement saw the counter view of the Toy Association contained in 42% of their coverage and the other in 80% of their coverage.

Advancing toy trends and featuring members is also fun! Throughout 2020, we featured 381 unique products in 48 TV segments and 20 global trade articles. Broadcast and cable TV segments featured 173 companies, and trade articles tied to The Toy Association’s 2020 trends and mid-year trend reports featured 95 companies. Many of these articles and segments highlighted member product as go-to toys and game ideas to help families learning remotely as well as those seeking new ways to engage with families and friends while under stay-at-home orders.

The Toy Foundation Sets Path to a New Future

In a swiftly-changing world, an exhaustive Strengths-Weaknesses-Opportunities-Threats report on the Foundation, examination of mission, and review of programs was done during March and April so the Board of Trustees could refocus its giving in ways that stay true to serving children in need while more directly collaborating and supporting philanthropy across the toy industry.

In June, six cash grants totaling $260,000 were made in response to the needs of children and families due to the pandemic. Over 300,000 people were served by these cash grants; toys were included with cash where needed and appropriate. Grant recipients were LA Unified School District, Parent Child +, Boys and Girls Clubs of America, First Responders Children's Fund, Delivering Good, and Court Appointed Special Advocates. In addition, Feed the Children received much needed toys to distribute.

In October, five more cash grants were made to support non-profit partners responding to the continued issues arising out of the pandemic, totaling $68,000. Recipients were The National Association of Children's Hospitals and Related Institutes, the Association of Child Life Specialists, My Stuff Bags Foundation, Horton's Kids, and Safe Kids International.

The Foundation is also moving forward on two signature initiatives. First, a children's hospital grant program that will respond to requests from children's health care centers across the country, especially those hospitals in vulnerable communities with few pediatric services; and secondly, a comprehensive program to create and encourage diversity and inclusion across the toy industry, including developing a pipeline for careers and providing mentorship to underrepresented individuals.

Safeguarding Your Association’s Finances for the Future

As we mark our 104th year of service to the toy and play community, strong financials and stewardship assure uninterrupted future operations. Careful management of the 2020 budget resulted in early and substantial expense cuts, furloughs, and reduced benefits, all of which are expected to achieve an operating surplus of $2.7 million heading into what will be a challenging 2021. We essentially took the same actions as so many of our member companies. Meanwhile, a 2021 annual budget has been prepared against a range of scenarios to make certain core member value services continue, staff may focus on the most urgent issues and threats, while the long-term excellent financial health of your trade association is maintained.

Wow. That’s a lot. And it only scratches the surface! It’s been a wild ride. True to form, our team and all of you flipped outrageous levels of uncertainty into possibility, actions, and outcomes.

All good wishes for the holidays. Merry Christmas! Happy New Year! Here’s to a bright, healthy, and prosperous 2021.

Steve Pasierb
President & CEO