On Eve of Turning 40, Barbie Faces Midlife Marketing Crisis
She’s had her share of plastic surgery, seen the spotlight shift to an upstart younger sister and heeded the call for diversity by evolving from blond bombshell to a multihued, multi-tasking, multimedia Barbie.
But as Barbie starts celebrating her 40th birthday party this weekend at the annual American International Toy Fair in New York, the world’s best-selling doll faces a midlife crisis brought on by changing play patterns among Barbie’s young fans and fundamental shifts in the way toys are sold.
Shipments of Barbie dolls, apparel and accessories fell by 14% in 1998 to just under $2 billion, a dramatic reversal for a play toy that for years delivered double-digit revenue growth for El Segundo-based Mattel Inc.
The doll’s uncharacteristic slip notwithstanding, Mattel Chairwoman Jill Barad predicts that the parade of new Barbie products being introduced at Toy Fair will take Barbie to “high single-digit” sales growth in 1999. Speaking during a Tuesday conference call with analysts, Barad maintained that Barbie’s future “has never looked better.”
Barbie remains by far the world’s most popular toy--sales at the retail level actually increased during 1998, although much of the sales were of merchandise marked down by retailers eager to clear their inventories.
But some industry observers are wondering if the world’s first material girl has the right stuff to continue as a growth engine in an increasingly interactive age. Although Barbie has taken her first steps toward a multimedia future, observers say the doll’s success remains tied to her role as a basic toy.
“Mattel wasn’t just sitting on its hands last year, but for whatever reason, it didn’t win the pot,” said John G. Taylor, an industry analyst with Portland, Ore.-based Arcadia Investment Group. “What I think they need to see is kids start to head back into the doll aisle in a meaningful way.”
As it tries to revive Barbie’s fortunes, Mattel will continue to play to its decades-old strength of marketing myriad versions of the doll and her friends to girls between the ages of 3 and 8.
But Mattel knows that little girls can only buy so many dolls, so the Barbie line is being expanded to include a doll designed to appeal to older girls and younger teens with plenty of discretionary income.
The marketing plan calls for Barbie to continue her march into the hotly competitive world of interactive toys and games. Mattel also wants to craft a new line of Barbie-inspired fashions for girls that will be sold through department stores and mass merchants.
In short, Mattel wants to turn Barbie into a lifestyle brand that includes everything from music CDs to books. “Just as adults say, ‘I want a Donna Karan suit,’ we want girls to say, ‘I want Barbie overalls,’ ” said Lisa McKendall, Mattel’s director of marketing communications.
Mattel’s battle plan runs counter to a world in which girls tend to put their toy dolls on the shelf as they see their peers gravitating toward more grown-up interests--and industry statistics suggest the trend is occurring earlier than ever before.
But Mattel counters that there’s a market for Barbie among older girls. For proof, it notes that Barbie software registration forms show most buyers to be older girls or younger teens.
As Mattel tries to broaden Barbie’s appeal to older girls, toy industry observers caution that the company must safeguard Barbie’s relationship with young girls who use their imaginations to craft their own story lines each time they enter Barbie’s world.
“That’s the reason we’ve stayed away from entertainment and books with story lines, because we don’t want to give Barbie definable attributes,” McKendall said. “There’s a very fine line to walk, and we’re aware of that line at all times.”
When apparel and accessories are counted, Barbie still sells the cash equivalent of 1.5 million dolls each week, so observers say she’s well-positioned for a rebound. “The fundamentals are still in place, but Mattel has to put in place the vehicle to make it happen,” said Eric Johnson, a professor at Vanderbilt University’s Owen Graduate School of Management in Nashville who studies the toy industry. Mattel will stick closely to the formula it has used to build Barbie from a $200-million toy in 1982. Look for new occupations for the doll who’s already toyed with more than 75 careers. Barbie also will squeeze new friends into her busy social calendar, and add to her sizable menagerie of cats, dogs and horses.
The avalanche of Barbie product starts this weekend in New York, where Mattel is painting the town Barbie Pink with advertisements on buses, billboards, taxis and trains. But the message will be different from that of recent advertising. Instead of telling young girls they need Barbie dolls, Mattel is shifting its marketing message to their mothers.
The message Mattel is delivering isn’t new. Barbie has always been pitched as “aspirational.” But rather than delivering that message to girls, Mattel is shifting its advertising salvo to moms--in an attempt to convince parents who foot the bill that Barbie is a good playmate for their daughters. The message that Mattel will hammer away at, Barad said, is that girls “can be anything they want through Barbie.”
In May, Mattel will introduce a new Generation Girl Barbie line that’s aimed squarely at older girls and younger teens who’ve dropped their dolls for other toys and attractions. Generation Girl Barbie and her new friends are cast as high school students--in other words, girls with attitudes--and, reportedly, nose rings and tattoos. Mattel goes as far as describing the new doll as “a reality-based line.”
The line that’s aimed at older girls and younger teens will include books, CD-ROMs and human-size apparel. Late in the year, for example, Barbie will star in “chapter books” patterned after the popular Baby Sitters Club series that keeps young, mostly preteen, girls enthralled. Mattel also hopes to expand its limited Barbie apparel offerings--one way, observers say, of boosting the Barbie brand among department stores and mass merchants.
Barbie will continue to build upon her first interactive steps taken in recent years. In December, Barbie grabbed the No. 2 and No. 7 spots on Reston, Va.-based PC Data’s Top Ten list of software titles. Mattel also will benefit from a high-profile partnership with Intel Corp., which will debut a new product line at Toy Fair.
On Wednesday, Intel stock closed up $4.13 at $138.69 on Nasdaq, and Mattel’s shares rose by $2.06 to $27.44 on the New York Stock Exchange.
One of Mattel’s challenges, clearly, is to develop “cool” software that will keep girls in Barbie’s camp as they mature into more worldly teenagers. Barbie accounts for most of Mattel’s interactive library. But the $100-million-revenue Mattel Media division represents just a tiny fraction of the fast-growing $5-billion video game market.
Analysts say Mattel is wise to try to secure space for Barbie products off of the doll aisle. By having offerings for other parts of the store, Barbie might be able to avoid the kind of rude shock she got last year, when toy retailers such as Toys R Us unexpectedly cut back on their orders.
“They have real reason to be optimistic,” Vanderbilt University’s Johnson said of Mattel. “They’ve got a phenomenal product platform, and Barbie could be so much more than just the doll. But it means Mattel has to continue to innovate around their core products.”
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Doll Days
* Barbie was created in 1959 by Ruth Handler, co-founder of Mattel with her husband, Elliot. Barbie and Ken were named after the Handlers’ children.
* Barbie is sold in 140 countries. Later this year, Mattel will begin brand-building advertising designed to expand sales in key markets such as Europe and Japan.
* Barbie gets more than 120 new apparel ensembles each year, and Mattel has used more than 105 million yards of fabric to make her outfits.
* The doll has undergone more than 500 appearance changes. The most publicized full make-over occurred in 1998, when she was given a wider waist, slimmer hips and a smaller bust line.
* Barbie’s first black friend appeared in 1968; the first black Barbie was sold in 1981.
* The doll initially retailed for $3 and now goes for $10. Mattel also now makes Barbie dolls for the adult collector market, such as the Porcelain Faberge Imperial Elegance Barbie, that can retail for nearly $400.
Source: Mattel
