Fingerlings – the miniature monkey toy best seller during the 2017 Holiday season

An article in BBC.COM (http://www.bbc.com/news/world-us-canada-42374523) describes the Fingerling – an animatronic toy made by a Hong Kong based Canadian company, WowWee. The article describes the early launch in the UK and Canada, and an internet buzz on social media that preceded the US launch in August, as stoking the demand explosion in the US. Expansion of production capacity, air lifting product to speed up availability, actions against counterfeiters and modest selling retail prices of around $15 all caused supply chain challenges. Should the company raise prices to moderate demand or let the price increase in after market channels enable the continued product demand buzz ? What can the company do to keep the demand growing into next season – add new animals or develop digital platforms to interact with the physical toys ? What should stores do to position themselves to have access to inventory of the hit toy each holiday season ?

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21 Responses to Fingerlings – the miniature monkey toy best seller during the 2017 Holiday season

  1. Chinmay Sahoo says:

    Very interesting article on the virality of toys every Christmas.
    I feel part of the buzz is always on the price – accessibility as a gift item for christmas (other eg: the One Plus). So, ways to improve contribution margin without increasing prices can be looked at – eg: Reducing margin to retailers, given that this is a pull product now.
    To keep demand growing into next season, one could look at retention – that can be maximized on two factors: virality, and collectability. The current holiday season has taken this one as an in-demand toy. There is no guarantee that this might continue in the future (next Christmases, etc.). Hence, apart from creating shareable moments and collections with different toys (an easier sell given current company capabilities), the company can look at starting an app – (like Talking Tom) to preserve this shareable moment in the digital form. This could help create further buzz, and may also help retain consumers by keeping them engaged in the non-holiday season as well.
    Stores better pile up with the complimentary toys, provide premium shelf space, and reduce their ask on margins. An on demand toy after all, is a crowd puller!

  2. Surya Tej says:

    Very interesting read.
    I agree that it is particularly difficult to identify which product will go viral in the upcoming season. More often than not, it would be that someone rolls a dice and decide on which product to produce for the upcoming season. One way to predict demand for these type of products would be by looking at the past data on similar products and try to extrapolate to get a fair sense of the demand.
    Also to tackle the variability in demand, the supply chain should be designed in an agile manner.

  3. Charu says:

    It’s interesting to know how small little toys can bring about such waves in the industry. To keep its demand going WowWee can produce stories/themes around the fingerling monkey and each season’s release can serve as sequels or relations to the story. This is similar to how fictional worlds used to be created around G.I.Joe or Barbie.
    Additionally, complementary items can be sold with the fingerling monkey, to suggest a few – tree rope, banana, monkey family, etc.

  4. Sara Moscato Howe says:

    My family and I were recently at Walt Disney World for the holidays and they are selling an “interactive” banshee at Animal Kingdom to promote their World of Pandora. The toy sells for $60, it sits on your shoulder and has a tiny remote you can use to control its movements. I thought $60 was ridiculous but there were plenty people buying the toy and walking around with it. Now, after reading this article, I wonder if the demand is for interactive toys and the lower price fueled the fire at the right time? That said, I’m not sure I would change the price point – or if I did it would be less than $5. Yes, the banshee sells for $60, but the phenomenon of being at Disney (and those darn magic bands that make you forget its real money leaving your wallet!) likely allows for a higher pricing strategy. I like the idea posted earlier about adding an app, which creates fingerling 2.0. I also wouldn’t rush to create the new version until closer to the holidays and then again, have limited inventory. With respect to store preparation, I don’t think they should do much more than they do. Part of the buzz is when something is hard to get and once they get the customer in the store, there is always the opportunity to sell a different – or comparable toy – to the shopper. For those of you curious, below is the link to the Disney Blog and photos of the banshee.

    https://disneyparks.disney.go.com/blog/2017/05/connect-with-a-banshee-at-the-rookery-inside-windtraders-in-pandora-the-world-of-avatar/

  5. Sandeep says:

    One of the greatest threat to the toy is a competitor creating a similar toy that interacts more with the child in the same price range. If a fingerling could interact and recognize its owner along with other fellow fingerlings, kids would be excited to use them in group play creating fingerling parties.
    It was also interesting to note how WowWee shared the toy with top youtube starts in the age group to generate buzz with the followers and advertise their products.
    Regarding the price, once WowWee creates a fully functional ecosystem where a fingerlings have a house, toys, food, etc.. specific to the brand, then WowWee can consider raising the price since their customers will not want to move to a competitor after investing in fingerling branded items

  6. Nick Vandal says:

    From an economics perspective I believe that the company should raise prices in order to moderate demand. If the company controls the demand through pricing they can also more control the consumer reaction to price changes. In my experience, letting the aftermarket channels (ebay, etc) buy up all of the product and then resell them for exorbitant prices tends to alienate your customers and drive them to competitors alternatives. I think the company should continue to develop new animals or features that can interact with them as well as create new digital platforms that keeps consumers interested in the latest “feature” with each season. Stores should have a guarantee purchase level of toys that says that they will sell “X” amount of the toys or that they will spend “X” amount on advertising for the toys in a specific timeframe, etc in order to drive sales and keep customers demanding the toy. If the store can guarantee a minimum revenue that should put them in a position to have access to the hit toys each season.

  7. Jesse Kiste says:

    I would agree with Sandeep’s overall thought of “is it too soon to raise the price”? With the risk of all of the competitors (and counterfeits) it seems like them raising their prices too early might cause customers to jump ship.

    I like the idea of adding new animals or developing a digital platform for interaction. I also think it was brilliant that it was released in the UK before the US, they should keep that up with all releases. The US is the biggest consumer market, when you deprive them of the latest/greatest/coolest toy, people go crazy…this could be an opportunity for WowWee to get a better understanding of demand, but offering the US pre-orders. (Depriving a country/region is very similar to how Yuengling has released its beer, it slowly (over multiple years) travels into the neighboring state….which drives demand of the next state over very high!)

    The stores could do similar to the suggestion above of pre-orders. A large chain store could take pre-orders months in advance, and then work with WowWee to gain priority of the inventory. This might result in a smaller profit per unit, but if that store is able to gain more units…overall profits could be higher.

  8. Christian Kersten says:

    Should the company raise prices to moderate demand or let the price increase in after market channels enable the continued product demand buzz?
    In terms of pricing strategies its all about the customers willingness to pay and their price sensitivity. You can analyze it before to see how customers would react to price changes. I would suggest to keep creating a strong customer base and by that increasing the market share with the same price (no increase) the customers are already used to. I’d rather would look for further selling potential (s. below).

    What can the company do to keep the demand growing into next season – add new animals or develop digital platforms to interact with the physical toys?
    Expanding horizontally with developing further animals seems pretty obvious and could be an expected move by the competitors. In the short-run, it could create value but in this case it is the best starting point to not only serving existing demand, it is a great chance to creating/developing a new demand! This could be by building up whole ecosystem, fully digital integrated to increase the barrier to switch. New animals with a form of digital connection, e.g. to the smartphone (app?) to create a real-world adventure as e.g. Pokemon Go. This could lead to a great community of loyal, continuously time-spending, brand “addicted” customers.

    What should stores do to position themselves to have access to inventory of the hit toy each holiday season?
    The most obvious form is to take (pre paid) pre-orders to ensure a certain purchase volume.
    Great chains could also (economies of scale) trying to get a right of first refusal or are the only licensed seller for special toys. By creating artificial scarcity the supply/demand balance can be influenced and e.g. higher prices can be taken to focus on a more, wealthy target group with prospective higher potential.

  9. Aaron Wheadon says:

    Should the company raise prices to moderate demand or let the price increase in after market channels enable the continued product demand buzz?
    Certainly the comapny should consider raising the price. The article suggests that Wowee has been active in defending their patents, and the popularity of their products will more than likely be limited in its shelf life. I would reaise price and gain the most profit possible while the toy is popular and top of mind.

    What can the company do to keep the demand growing into next season – add new animals or develop digital platforms to interact with the physical toys?
    The company should invest in an app for both the iOS and Android platforms, and a storyline to go along with it that will keep it fresh and in front of their target consumers.

    What should stores do to position themselves to have access to inventory of the hit toy each holiday season?
    Ordering earlier in the season, with a target of number of units to sell in the holiday season. They could also try and pre-sell the units, to help with establishing a target number of units to order in.

  10. Henry Reed-Schertz says:

    Fingerlings Week 8 Blog Reply

    Should the company raise prices to moderate demand or let the price increase in after-market channels enable the continued product demand buzz?
    The company has to consider and increase in price as you do not want to see your product exploding on that after market channels as that is lost profit. However as it needs to be considered I don’t think they should raise the prices (or not yet). I think they have to look at capturing a larger audience and overall market share. I think back to beanie babies and the after market resale values and how crazy people went over a stuffed animal. I think that if you have the right product you can afford to maintain a steady price and let that aftermarket continue to drive demand as you release the next round of monkeys. I think you also have to look at this as how you can expand and what can you offer the consumer next. In theory by maintaining the price you are developing a customer loyalty and as you release a new product or line the intent would be to maintain the same buzz.

    What can the company do to keep the demand growing into next season – add new animals or develop digital platforms to interact with the physical toys?
    In this day an age of technology and immediate satisfaction I think WowWee has to explore both options and need to make them a reality. As the monkeys continue to be a success there needs to be a way to expand; develop another “character” for the monkey and consumer to interact with. In the end you have chosen a jungle animal so why not provide the consumer with the whole jungle? I think that taking this to a digital platform is a must. The Fingerlings are designed to interact with the consumer and we as the consumer are always looking for the latest update. As Aaron presented an app is the most realistic option. I would think it would resemble something of the Tamagotchi where its interactive and “alive”. I think that Chris brought up an interesting point with “Pokémon Go” and think that if consumers could interact with each and with the other animals it would give WowWee unlimited potential.

    What should stores do to position themselves to have access to inventory of the hit toy each holiday season?
    I think that with the transition to online shopping versus retail stores; the stores themselves have to be prepared to sell out and utilize that as an increase demand to get people into their stores to hopefully purchase other products. I think the idea of pre-orders is a must and can position the store to maximize their supply while also providing an opportunity to get the consumers on site. If demand is as high as the “tickle-me Elmo” and “cabbage patch doll” then the risk of excess supply is low therefore they can hammer the over in order to match the demand.

  11. Bradley Wensel says:

    Should the company raise prices to moderate demand or let the price increase in after-market channels enable the continued product demand buzz?

    As a new product and a possible limited window of interest I do not think they should raise their price but use the opportunity to gain the biggest audience possible at the lower point of entry even with the price increase in after-market channels. In order for a toy manufacturer to sustain interest they need a wide audience and to continually find ways to build additional revenue sources of that character or toy. For now, I would leave prices as they are.

    What can the company do to keep the demand growing into next season – add new animals or develop digital platforms to interact with the physical toys?

    I would focus on digital platforms to interact with the physical toys and continue to extend the excitement around the toys into the following year. The more engagement the company can get with the toys the more opportunity they have to introduce additional revenue opportunities into the future. Additionally, the continued digital platform can be used to introduce new animals, which could make demand for new products.

    What should stores do to position themselves to have access to inventory of the hit toy each holiday season?

    Stores could increase the quantity of size and orders to build a robust inventory of the toys but would need to make sure holding costs weren’t taking away all the margin on the low-priced product. Additionally, they could work with the manufacture to introduce new products around the toys and build upon the digital platform to increase awareness on an ongoing basis versus just the holiday. This trade partnership could help secure more product from the manufacture and help secure additional sales across the stores by having availability to this key product.

  12. Ross Ridge says:

    I would caution against increasing the initial price for the product to the retail stores. The limited supply and subsequent demand for the product may cause some retail stores to increase the selling price. This could hurt WowWee, if they increase the cost to the retailers and the retailers raise their selling price. Future potential customers may see the cost for the Finderling as to expensive and the “buzz” could quickly fizzle. I would keep the price affordable for the customer and benefit from the sales volume.

    The introduction of the next season’s product line would be the right time to raise the selling price. This could be in conjunction with the introduction of new product lines (animals) and digital platforms. Consumers would want to take advantage of the new products and may be more willing to purchase a new item for a higher cost.

    To position for the future, stores need to calculate their anticipated demand and order the animatronic toy with plenty of lead time to meet seasonal shopper requirements. They can assess demand from the initial launch and calculate the desired quantities to order to meet the shopping season timeline and minimize inventory holding costs. In conjunction with WowWee, they can synchronize their marketing and advertisements to coincide with the availability of the product line in the retail stores.

  13. Beth Hinchee says:

    Should the company raise prices to moderate demand or let the price increase in after market channels enable the continued product demand buzz ?
    Whether they should raise prices depends a bit on the scalability of their manufacturing. If they have supply chain constraints that are not quickly resolvable, they’d be better off raising prices now to moderate demand. That would increase their profits per unit and create a “scarcity” attraction for the toys. If, however, they can quickly scale up their supply chain, then they should hold price constant and begin ramping up production based on forecasts. These fads can fade fast, so they should aim to maximize profit in 1-2 holiday seasons. If they can extend popularity beyond that, then they can revisit their pricing model based on competing in a more mature toy market.
    What can the company do to keep the demand growing into next season – add new animals or develop digital platforms to interact with the physical toys ?
    They should probably both develop new animals to increase the “collectability” of the toy, and extend interactions into digital platforms to stimulate visibility and demand.
    What should stores do to position themselves to have access to inventory of the hit toy each holiday season ?
    Aside from developing a commercial relationship with the manufacturer and pre-ordering inventory for the holiday season, stores should identify multiple sources of supply beyond just the manufacturer. The alternate sources of supply could also be an avenue to offload excess inventory in the event that sales do not materialize.

  14. Linda Sverdrup says:

    Should the company raise prices to moderate demand or let the price increase in after-market channels enable the continued product demand buzz?

    Where these is opportunity – a business must assess & seize it. There is a slight window of opportunity where they can increase the price a bit, without adversely affecting the demand. They could potentially execute a sliding increase, testing the waters. If there was a negative or adverse market reaction, they could offer coupons to reduce price for a pre-order. There are many different tactics to utilize.

    What can the company do to keep the demand growing into next season – add new animals or develop digital platforms to interact with the physical toys?

    Both of those options are viable ways to keep the demand growing, plus possibly branch into children’s coloring books with the figures, activity books, candy figurines, cereal, or simple collectable cards.

    What should stores do to position themselves to have access to inventory of the hit toy each holiday season?

    I would not try to achieve access inventory—just in case it changes from hype to a flop. It is better to have less and keep the demand hype high to extend profits throughout the year, especially with the complexity of the global supply chain. Ramping up isn’t always easy, but access inventory cost money and ultimately decreases the demand.

  15. Lindsey Minto says:

    Should the company raise prices to moderate demand or let the price increase in after market channels enable the continued product demand buzz ?
    While there is an allure of capturing some of the money that the after market channels are bringing it, it is not a wise strategy for the company. If anything, the true benefit that these channels offer to the manufacturer are the hype and perception of exclusivity. To promote a longer life for the toy, the manufacturer should keep the lower price to promote a wider range of children access to the toy, furthering its popularity and demand.

    What can the company do to keep the demand growing into next season – add new animals or develop digital platforms to interact with the physical toys ?
    There are numerous examples of toy companies bridging the gap between physical and digital. One popular example is Webkinz. With a one to one access code and numerous characters, the company drove demand for the sale of multiple toys.

    What should stores do to position themselves to have access to inventory of the hit toy each holiday season ?

    With at least one holiday sales season behind them, the company has a limited amount of data that can help them to distribute the toy to the hot spots and high sales areas more easily. Additionally, they should consider creating a partnership with a designated retailer known for their distribution network. In this way, they can reduce the total number of stores with small amounts of inventory and increase the opportunity for the large retailer to move the inventory between stores to better meet demand.

  16. Jessica Heaton says:

    Should the company raise prices to moderate demand or let the price increase in after market channels enable the continued product demand buzz ?
    While the intention of raising the price is to moderate demand, there could be a distinct reduction in demand with the change to price. As mentioned in the article, one of the selling points of the product is the low cost of the toy. If prices begin to rise and it no longer becomes affordable, it may not increase demand as expected.

    What can the company do to keep the demand growing into next season – add new animals or develop digital platforms to interact with the physical toys ?
    I think the company should look at both options to increase demand for the product into the next season. As interactive toys are more and more popular, it would be extremely beneficial to add additional digital platforms to the toy, with new features each season that will continue to build demand.

    What should stores do to position themselves to have access to inventory of the hit toy each holiday season?
    They could partner with manufactures and retailers to streamline their supply chain. This would allow them to potentially utilize economies of scale and reduce cost through the manufacturing process.

  17. Alyssa Bybee says:

    Should the company raise prices to moderate demand or let the price increase in after market channels enable the continued product demand buzz ?
    While it’s always attractive to consider a price increase at this stage of popularity in an attempt to maximize profitability, for this particular product I would advise against raising the price at this time and instead continue to focus on original selling points of the Fingerlings: affordability and accessibility. Let after-market channels do the work – and as the product continues to develop and offers ancillary technologies and products, then focus should shift to promoting its exclusivity, which can include a price increase.

    What can the company do to keep the demand growing into next season – add new animals or develop digital platforms to interact with the physical toys ?
    Like others have mentioned, introducing a new product-line, whether new animals or digital platforms, would be a great opportunity for a price increase mentioned above. Consumers will be looking to enhance their own Fingerlings, and new features and animals would increase appeal to consumers, and encourage them to want to purchase collectibles, even at the higher price point.

    What should stores do to position themselves to have access to inventory of the hit toy each holiday season ?
    I agree with Jessica, that by establishing relationships with manufacturers, retailers, etc. would be a great way to streamline production, as well as monitor demand a little more closely, especially during the holiday season.

  18. Marcello Sanzi says:

    Should the company raise prices to moderate demand or let the price increase in aftermarket channels enable the continued product demand buzz?

    I do believe the company should raise the price and to maximize profit while the product is popular. The supply and demand should even it right while they watch close how much the price should be raised to.

    What can the company do to keep the demand growing into next season – add new animals or develop digital platforms to interact with the physical toys?

    I would recommend adding new animals to the product line, this would help to have a bigger profile of products being offered, in addition it would be a good time to raise the prices while introducing new products.

    While they are introducing new products, they could also develop the digital platforms to interact with the physical toys, this could keep the demand growing as you are introducing new concepts.
    What should stores do to position themselves to have access to inventory of the hit toy each holiday season?

    The most important thing is to have a good relationship with the manufactures, with this they could work with supply chain to avoid or minimize any issues. Having past demand data could help them to calculate some anticipated demand, also I would recommend to have those plans in a time manner so they can plan accordantly.

  19. Vivek Chakrabortty says:

    Should the company raise prices to moderate demand or let the price increase in after market channels enable the continued product demand buzz?
    The company should let the price increase in after market channels to enable the continued product demand buzz. The frenzy and buzz associated demand seems to be central to create a craze that can be sustained beyond seasonal sales. Moderating demand by raising prices may benefit their internal operations in the short term. However, in the long term, they risk creating a perception that their products are inaccessible due to price.

    What can the company do to keep the demand growing into next season – add new animals or develop digital platforms to interact with the physical toys?
    All of the above. While there is a buzz around the Fingerlings they should take advantage of it. In the US, they can add new animals – some exclusively designed and released for specific holidays. They can incorporate games via app stores that are accessed through purchase of the product. They could also explore partnerships with cartoon producers as a mechanism to reinforce the suite of Fingerlings. Globally, they could tailor the product to specific countries and cultures making it a true global phenomenon. E.g. national animal Fingerlings.

    What should stores do to position themselves to have access to inventory of the hit toy each holiday season?
    Stores have to be careful when positioning themselves for holiday season. If they are overly ambitious, they will get stuck with too much stock. Rather than maximizing sales for toys where they cannot really predict the demand, they should remain cautious and focus on maximizing profit. They could also invest in better inventory management so they can respond to demand surges in local markets by borrowing from markets with excess stock. The biggest risk are toy stores – if they stock out, they run the risk of losing customers for the long-term. They may have no other alternative than to stock up and risk having excess stock.

  20. Sandeep Singhatia says:

    In my opinion company should continue with same price otherwise it will be a bad publicity for company. People can develop a theory that company did it intentionally and now buyers have to pay more and might switch to a complimentary good. Also, concerning point for retailers can be if they raise price during the peak demand pre-Christmas, customers will return the popular item after the holiday season when price has fallen back down, only to buy it again at the lower price.

    Adding new animal(s) will be a good option but ‘m pretty sure when a hot toy comes in market other companies get busier to launch similar toy which will be another animal mostly. So, you already have a competition.

    I ‘m in favor of develop digital platforms to interact with the physical toys, demand of smart toys is increasing day by day, making them interactive will engage the child into action, challenge them to think, feel and react. So, I guess parents will buy more.

    Carrying too much inventory can backfire retailers, on the other side Shoppers are never happy when they miss out on that special gift, advertised or not. Retailers have a new solution for this, but it is also the new competition to in-store sales. Direct to consumer fulfillment can be initiated from anywhere. Out-of-stock in the store? Ship it in two days. But don’t let the shopper place the order somewhere else. Make it easier to do it through your digital commerce. And don’t sell that last one. Keep it in the store for the tactile sell.

  21. Enoch Obeto says:

    Should the company raise prices to moderate demand or let the price increase in aftermarket channels enable the continued product demand buzz?
    I don’t think the company should take any steps to moderate demands but should encourage every action that continues to drive up demand. Raising prices might benefit the company on the short run but may hurt them in future, this may compromise their market share and leave room for competitors and new entrants. The company should invest in an efficient supply chain management systems to better manage demand fluctuations, this will enable them handle high demands and then scale back when demand drops without the need to change prices.

    What can the company do to keep the demand growing into next season – add new animals or develop digital platforms to interact with the physical toys?
    The company should pursue both options, they are complimentary and will inevitable lead to increased demands. According to industry experts, to make the hot toy list a product has to be innovative and at the right price, but to drive demand it has to be interactive and should have variety. Adding new animals and developing a digital platform will increase the demand buzz.

    What should stores do to position themselves to have access to inventory of the hit toy each holiday season?
    Planning and preparation is the key. The stores should establish relationships with manufacturers to pull in supplies based on demand. This is similar to what Walmart does with some of its suppliers, this enables the suppliers respond directly to retail demands.

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