Mattel Disney Pixar CARS 2 Diecast: What Happens at Retail When CARS Clot?
So, what exactly happens at retail when demand is lower than supply?
Like everything else, it’s complicated- there are no set answers but basically it’s like when a lion, an elephant, an alligator and a hippo all show up at the same watering hole. Everyone has their business to do but eyes each other warily.
The Big Three are really the Big Two – Walmart & Target. The only two that matter are Walmart and Target. Toys R Us will pretty much carry every toy anyway so if the other two are in, TRU is certainly in.
And faced off are two companies that control over 50% of the toy market and probably 80% of the brands – Mattel & Hasbro – so it’s an elaborate dance when lines perform not to expectations, poorly or bomb outright – neither side can scream bloody murder because both sides need each other.
In a normal course of action when a line does poorly, the question is how poorly. The worst case scenario is when the retailer has tried pretty much everything including discounting, BOGO, etc and it still just sits there – the most obvious recent example is Green Lantern. There are several options and Walmart & Target seem to differ. Walmart is more direct – they will either pack up items and send things back or they will call in toy reps to come in and swap things out. Target does not seem to favor the swap – probably because they do not like vendors wandering around their stores so Target will do more clearance discounting.
(Mattel will stock their own company stores and/or re-sell to consolidators or overseas to “bury” it away but now with the internet, it’s not an easy task).
Now, if the line seems to sell okay with discounting and it’s not a huge setback, WM & Target will simply accept it as a normal course of business. For instance, most apparel is based on selling 60-75% at full price, 20% discounted nearly breakeven and the rest at a loss. Most toy lines tend to fall under these guidelines as most toy lines last 3-9 months depending on when the DVD or holiday period is – so as long as it drove in enough business (shoppers to the stores), good enough … and even if it’s very poor – if the stores did not commit a lot of inventory, they might grumble and remind the sales rep, “You owe us one,” it’s mostly just the normal course of business – not everything is a hit or even a mild success.
WM tends to throw their weight around more – partially because they have 60% more stores than Target so even at carrying the same inventory level, they have committed that many more dollars. So, the worse case scenario is that Walmart says they won’t pay for something and they are returning it. But there can also be some negotiation. Walmart also knows they are not going to cut off their nose – after all, Mattel has Hot Wheels, Barbie & Fisher Price so even if something performs poorly today, there’s tomorrow to think about but same with Mattel. If Walmart is going end up buying $1 billion dollars worth of toys this year, why salt the Earth over a few million dollars?
So, it’s a dance.
This is one reason why small toy companies cannot really make it because if Walmart commits big to a line and it does not sell, WM can simply charge everything back to you and pay you nothing. You have no real recourse as WM is not afraid you won’t supply them down the line as they would be in making too many arbitrary decisions regarding Mattel or Hasbro products. But conversely if Mattel and Hasbro sells WM on a movie that ultimately bombs, Mattel or Hasbro is NOT going to hold WM’s feet 100% to the fire and say NO RETURNS, PAY UP or we’ll cut you off …
Of course, sometimes a retailer will go hog wild and say WE WANT TO GO BIG with this – then of course, the toy manufacturer will get that in writing. 🙂
With most lines, it is a short term deal so it can simply be sealed off and it’s done. CARS is different because it’s clearly a Disney evergreen line with shorts, a theme park section, more films (DVD only or otherwise), etc, etc … so while there might be short term hiccups, in the long run, there’s still money to be made and of course, this is true on Mattel’s side – just as Mattel paid for the new Target CARS banners and extended section elements (out of merchandising dollars) to hopefully juice up sales.
But going forward, Walmart as of now seems that they are definitely de-emphasizing CARS diecasts and Mattel CARS. This might be a temporary situation as when CARS Land opens or when Toons returns, they might re-commit more but as of now, WM seems to have returned a few hundred thousand CARS items and have said no to new CARS 2 exclusives. There does not seem to a major shift at Target & at TRU – maybe because they know what Disney is committing to promotional and marketing dollars to the opening of CARS Land in June – and Target is taking a more wait and see approach.
So, like everything else, there are never any set answers … the question is whether the watering hole is big enough for everyone or one false move set off some stampede …
metroxing
28 February 2012
Disney Pixar, Disney Pixar CARS 3, Mattel Disney Pixar Diecast CARS 3
17 Comments
Okay for all of you wondering how this happened, it all leads back to Case C.
First, Case C (with RS Ramone) was shipped. However, not many stores got it, which began delaying the retail.
Since CARS like Grem, Race Team Fillmore, Raoul CaRoule, etc. quickly got swept off the shelves after a month or so, leaving the already over-packed Mater, Finn and McQueen left on the shelves.
Every now and then a case like F with Nigel and Ramone will be put out, and the CARS like them would be bought, leaving more Finns and Maters, left, because everyone had them.
So now that that’s cleared up, good luck hunting… you’ll need it 🙂
If I had a dollar for every Finn McMissile I’ve seen on the shelves, I would have 10000000000000000000 bucks.
My Walmart never gets in anything but today I make an execption. I am happy at Walmart instead of mad because when I went to school today and came back at lunch my mom gave me Miguel Camino! Also why is Miguel’s spoiler red when in the movie it is black?
(MET: I sense a variant fix … :-/ ).
http://pierstransportation.wordpress.com/2011/12/20/tis-not-the-season-to-be-jolly-for-chinas-toy-manufacturers/
Just found this article which must explain why we have not seen any new product over the holidays.
Recently reported in The Guangzhou Daily, China is calling this Christmas “the worst” for Chinese toymakers ever.
So depressing. I had such high hopes for Cars 2. SO much potential. Utterly squandered. I spent a ton at launch, bought dupes to get exclusives. It was like Christmas, such fun. There are so many Cars 2 diecast I still want, heck, there are Cars 1 diecast I still want! Mattel, I will buy, I swear I will, still, even after months of drought. Just put some new Cars on the pegs for the love of God!
I can count on one hand how may times I have stepped into a Walmart(4), Target(1), or TRU(0) since the last Final Lap case was released.
Looks like I haven’t missed much.
Wow, what a familiar sight! Very interesting article.
We might need a Cars blood thinner if they stay clotted like this.
Great read… Now if only Mattel would get it together… Cars diecasts succeeded in spite of Mattel, not because of Mattel.
How about a subscription service? I’d love the chance to pick up the unreleased Cars haulers, time crew sets, pit row launchers on an online basis, one a month… retailers don’t get stuck with merchandise they can’t sell.
I went to Indianapolis on Sunday – out of 21 stores, all but 1 Toys R Us had 1/2 the shelf and peg space available for Cars merchandise that they’ve had… retail space is as low as it was at the end of the lenticular days… That’s at 4 Walmart, 3 TRU, 2 Target, 2 Kmart, 2 Meijer, 2 Kohl’s, 4 Kroger, 2 Family Dollar, and 1 O’Reilly Auto Parts stores… I bought a total of 3 discontinued Mater’s Secret Mission 2 packs at 2 of the 4 Walmart stores for under $11 – and that’s all I spent on Cars…
When the only Deluxe in the stores are Submarine Finn and Holley with wings (except for 1 Kroger that had 1 set of Pope and Popemobile), that’s a huge problem… Other than finding 7 Lights and Sounds Rod Torque Redline at 1 Walmart, 1 Lights and Sounds Miles at 1 TRU, Nigel and Hydraulic Ramone singles at 1 Target, the Hudson Hornet McQueen single and Francesco & Raoul launchers at 2 Kohls – it’s all merchandise that was released on May 16, 2011…
Even 2 of the 3 TRU stores had only 1 Cars end cap and 1/2 of 1 side of one aisle for Cars… they’ve all had 2 Cars end caps and 1 full side of an aisle for Cars for years.
The local Meijer has 200 singles… For something to do, I arranged them by character on Saturday… 6 Raoul singles… 2 pegs full of Francesco… 4 pegs filled with McQueen… 6 pegs filled with Race Team Mater… and at least 12 pegs filled with Finn McMissile… in other words, nothing that will sell, and until they sell, they’re not going to get new merchandise.
When new Cars2 launchers are debuting at Family Dollar, Kohl’s, and Disney Stores in Disney Land and Disney World, there’s a problem… When new cases of singles debut at Family Dollar, there’s a problem.
When very few stores are getting new deluxe cases, there’s a problem.
I’m becoming convinced that Mattel would rather sell the same 1 Car to 25 people instead of 25 different Cars to 1 person… which would turn out to be 25 different Cars to 25 different people… because if we’d find new Cars, we’d tell our friends, and sales would increase.
Mattel has taken the can’t miss Cars product line and come very close to killing it.
Mattel really should think about pricing Cars based on quantity, longevity, and demand. Finn McMissile and Francesco would be 50 cents each, Lightning and Mater would be 75 cents each.
Finn McMissile would literally be FREE at my Wal-Mart. There is no other single there right now except for him, and he filled up most all the singles part of the shelf space. Lights and Sounds aren’t doing well here either, and same with 2 packs and Megas and well, everything :(.
Everyone says that the big behemoth Mattel with their market research, big executives, etc., know what they’re doing? Isn’t the objective of a toy company to sell toys? If they are stuck with 500,000 LMcQ’s and Finn’s then maybe they’re not so smart after all? Meanwhile, all the new castings are gone within days, but they continue to make case pack after case pack with the same old repeats? It’s not puzzling, it’s stupidity.
Yeah, those folks who said Mattel knows exactly what they are doing as Cars 2 is laying a giant stinking egg have gone strangely silent the last couple of weeks.
The only reason I would think they would repack Cars would be so that new Collectors would be able to “catch up” if they started late. Now I’m starting think it’s more a case of Stupidity than new Collectors.
Great article Met!
I know this wasn’t really the point of the article but I would blame this fiasco largely on Mattel for what was poor case contents, and the way box sets have been configured. They put off a lot of collectors by not properly finishing Cars 1 and then launched straight into Cars 2 by dumping 50,000 Finns at each store. For me it was one of the biggest toy launches I have seen and it still baffles me as to how huge Mattel and co thought the movie would be.
It comes down to greed of Mattel thinking that because Cars 1 was so successful, that everyone would continue collecting. Well, some kids outgrew Cars 1 and collectors, who by now had spent a fortune on Mattel, had had enough, especially when rumours were flying about 900 diecasts to be released for Cars 2. Mattel did nothing to help those collectors by not really catering to their needs at the start and it was a crucial point; it wouldn’t have hurt Mattel to release all the first cases as just 1 of each car and then seen what happens, no repeats at all especially in 2 packs (ok maybe 2 Finns as he was new). However putting so many McQueens and Maters was plain silly as most kids would’ve had one of those from Cars 1 and would again look for new people. Collectors would’ve been satisfied with no repeats and likely to keep collecting and new collectors/parents would equally be pleased. Instead they have made their greed obvious and people are turned off.
Neato! NOT!
It’s too bad that Cars 2 die-casts releases have not been as exciting as Cars 1. With Cars 1 there was always something new and exciting right around the corner to hunt down. Not so much this time around…