$100 Dolls Are the Talk of Toy Makers
She can kiss, hiccup, burp and even sneeze. She plays pat-a-cake and sucks her bottle and laughs when her tummy is rubbed. She is Baby Heather, a plump electronic baby doll, and she comes with a high-voltage $110 price tag.
Mattel’s Baby Heather, a blonde, blue-eyed bundle of silicon chips, isn’t the only high-technology, hundred-dollar baby being delivered to toy stores this fall. Using the same intricate electronics that power home computers, supermarket cash registers and smoke detectors, at least six toy companies have come up with high-priced dolls that can “read” storybooks, “feel” cold or “wake up” in the morning.
At a time when toy sales are depressed and retailers are discounting other high-tech toys, the beleaguered toy industry is carefully monitoring sales of these electronic dolls, most of which cost $100 or more--a price that a few years ago would have been unimaginable for a toy.
Parents Spend More
The price tag “is in keeping with our life style,” says Richard Sallis, a marketing vice president with Playmates Inc., which makes $150 “talking” Jill and $75 “talking” Cricket and her brother, Corky. Parents who spend big on themselves will spend big on their children too, Sallis reasons. “A few years ago, it would have been unheard of to spend $50,000 for an automobile.”
Ever since parents snapped up the homely Cabbage Patch Kids rag dolls for $30 each in 1983, toy prices have continued to climb, and parents have continued to pay those prices. According to Toy & Hobby World magazine, the amount parents spend each year for toys has jumped to $200 for each child from $55 in 1977.
The magazine also reports that 74% of consumers think that they spend too much on toys. Rick Anguilla, editor of the magazine, says the $100 price tag is a real gamble. “The manufacturers are sort of testing the boundaries . . . parents are going to look at these prices and search deeply to justify spending that amount on a toy.”
One parent who hasn’t made up her mind to spend $100 on a talking doll is Gladys Saucdo, a San Gabriel mother. “My 8-year-old is begging me for Baby Heather,” said Saucdo, as she looked over the talking doll display at a Toys R Us in Rosemead recently. “But $100 is a lot of money. And my 7-year-old wants one, too.”
Saucdo’s dilemma was anticipated by toy merchants, who placed only modest orders for the talking dolls. Richard Brady, owner of Play Co. toy stores in San Diego, says that, although he thinks the dolls will do well at Christmas, he doesn’t stock Jill, the most expensive doll, with a suggested retail price of $150.
Toys International in Glendale carries a variety of talking toys, but its only talking doll is Baby Talk by Lewis Galoob Toys, a big seller last year that has been discounted in most stores to around $35 from $70 last Christmas. Among the electronic dolls, “it’s the only one that sells,” says store manager John Bryant.
Federal Wholesale, one of the largest toy distributors in the West, is distributing only Baby Heather and Coleco’s $125 Talking Cabbage Patch Kids. Robert Freedman, marketing director, says the high-price dolls appeal only to the “yuppie-type person who has to have the trendiest product . . . most consumers are reluctant to invest this kind of money in a toy.”
Toy & Hobby World’s Anguilla says the high price of the dolls makes it risky for the merchants to order many of them. “It’s a lot of capital for them to tie up,” he says. “And if the dolls don’t sell, the retailers will lose a lot of money when they have to take markdowns on the dolls.”
Some merchants think the dolls will be a big success. Toys R Us, the nation’s biggest toy retailer, expects sales revenue from talking dolls to exceed revenue from any other kind of girls’ toy, such as fashion dolls. J. C. Penney says Talking Cabbage Patch and Baby Talk are selling well.
Play Co.’s Brady expects to sell all his Baby Heather dolls and Talking Cabbage Patch Kids by mid-December. Brady reasons that parents are willing to spend a little extra on their children at Christmas. “I think the parents and kids will be happy with what the dolls do for the money,” he says.
Dolls React
And the dolls do a lot. Julie, a brunette talking doll from Worlds of Wonder, has light sensitive cells that let her know when the lights go off in a room. Playmate Inc.’s Jill “sings” into her own microphone. Talking Cabbage Patch Kids dolls talk to each other with the use of radio waves.
The toy companies explain that these dolls “discuss” everyday things with little girls because they contain sensors that “hear” key words and react with certain phrases. Jill, for example, asks “Do you like cats, dogs or cows?” If a little girl picks cats, Jill will talk for 30 seconds about cats before asking another question.
If a little girl tells her Talking Cabbage Patch she wants to sing, the doll will “sing” a chorus of “Row, Row, Row Your Boat” in a high-pitched voice. And, if dolls work as they should, two of these dolls in the same room will sing in unison.
“We’re talking about dolls that are almost human,” says Rita Fire, a marketing vice president at Mattel.
Playmate Inc.’s Sallis estimates 5 million to 6 million talking dolls will be sold this year, with about 1.2 million of them priced at $100 or more. He says that last year, about 4 million talking toys were sold, including Baby Talks, Teddy Ruxpins and 800,000 Crickets.
“It’s a narrow market,” Sallis says. “But at those prices, you don’t have to sell very many.” He estimates that Playmates will sell 800,000 talking dolls this year, worth about $62.5 million at retail.
And Sallis points out that other toys for sale this Christmas cost even more than Jill. Fisher Price is selling a $225 camcorder for kids and Nintendo, a Japanese firm, has a $150 video game system complete with a robot and a “laser” gun. But the camcorder and video games are thought to have broader appeal because “they really fall into the category of family entertainment,” acknowledges Mattel’s Fire. On the other hand, electronic dolls “are just for girls.”
Fire says it’s not at all certain how parents will react to Baby Heather’s $110 price tag. “How much will the consumer pay and how often? That’s the biggest speculation on all our parts.”
Toy Slump
It’s a gamble that toy companies need very badly to win. As the all-important Christmas toy shopping season approaches, some of the nation’s leading toy companies find themselves mired in losses.
Mattel, the No. 2 toy company, has lost $12.4 million so far this year. Earlier this year, Mattel, based in Hawthorne, eliminated 300 headquarters jobs and decided to close its factory in Paramount, laying off another 250 employees, to save money.
Lewis Galoob Toys, based in South San Francisco, has lost $9.2 million so far this year. Things are so bad at Worlds of Wonder that the money-losing company has slashed prices on its toys and put itself up for sale to raise cash.
Those in the toy industry attribute the slump to a sudden decline in the popularity of toys that were big sellers last Christmas. The toy manufacturers are looking for the talking dolls and new “laser” games, such as Mattel’s Captain Power boys’ action set, to replace some of the lost sales.
Meanwhile, old favorites are being discounted. Worlds of Wonder’s Lazer Tag and LJN Toys’ Photon and other laser games are marked down by as much as $20 below last year’s retail prices to improve sluggish sales.
David Capper, marketing vice president for Galoob, says that the firm is discounting Baby Talk because the market is now so crowded with high-priced dolls that no toy company will do really well. He says Baby Talk was a success last Christmas “because we were there first.”
Not every talking toy that was introduced last year did well. Hasbro, the nation’s No. 1 toy company, quit making talking toys after disappointing sales of its talking Bingo Bear last Christmas. Worlds of Wonder’s talking Pamela sold poorly, partly because it wasn’t shipped to stores in time for Christmas last year. It is now marked down to $30 from $50.
Mattel’s Fire contends that the new generation of talking dolls will do well this year “because there really hasn’t been anything new in the big doll category” since Coleco’s Cabbage Patch Kids.
Sales Soar
In fact, toy manufacturers contend that the $100 price tag is just an extension of a price spiral that began with Cabbage Patch Kids. The dolls, which were “adopted” by little girls, were introduced at $30 retail, “a remarkable price for a doll that essentially, doesn’t do anything,” Fire says.
The price acceleration continued with Worlds of Wonder’s Teddy Ruxpin talking bear. Introduced in 1985 at around $65, the bear racked up $93 million in sales, the most ever for a new toy, according to Anguilla, the Toy & Hobby World editor.
Donald R. Kingsborough, chairman of Worlds of Wonder, which sells the $119 talking Julie, says that Teddy Ruxpin taught the toy industry that parents will spend lavishly to make their children happy. Television and friends have a bigger influence on children than parents, Kingsborough observes. “If a little friend up the street has the toy and likes it, that child will want it, too.”
