Webkinomics: Cute, Cuddly and Creating a Halo Effect

As With iPod, Marketers Rush to Build Accessories for Ultra-popular Doll Line

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Chris and Steve Tini are flourishing in the Webkinz economy.

The owners of Sweet Be's Candy & Gifts in suburban St. Louis have doubled their staff within the past six months and added a second phone line just to field requests for Webkinz, the interactive, collectible plush toys that have generated the same frenzied fever as Beatlemania and Beanie Babies.
Webkinz are being compared to Beanie Babies.
Webkinz are being compared to Beanie Babies.

"While the kids are looking at the Webkinz, the moms check out the jewelry or other things," Ms. Tini said. "The Webkinz have brought a lot of people to the store who didn't know we were here."

Accessory bonanza
They're far from the only ones benefiting. The popularity of Webkinz, like that of the iPod before them, has resulted in sanctioned and unsanctioned accessories, such as trading cards, jewelry, clothing, books and party products, and spurred a rush by toy and gift makers to create rival real-world products that connect to the virtual Webkinz World.

It's impossible to value the extended Webkinz economy, but it's assuredly huge, ranging from entrepreneurial eBay-ers selling Webkinz clothing to media for enthusiasts, such as Beckett Media's recently announced bimonthly Webkinz magazine, Plushie Pals. There are books, too. "The Complete Idiot's Guide to Webkinz" is due out in January, according to Amazon. That doesn't include, of course, the scores of media bloggers and columnists who've chronicled their child's or niece's or neighbor kid's fascination with Webkinz.

"We've had our eyes on Webkinz for about 18 months," Beckett Media's Doug Kale said in a news release. "The Webkinz craze has all the same feeling and buzz of Beanie Babies or Pokemon."

That's naturally drawn Webkinz competitors such as Shining Stars, Ty Girlz and Kookeys, as well as offerings such as Mattel's Barbie Girls, MGA's Be Bratz and Hasbro's Net Jet. (While Webkinz has KinzChat and KinzCash, Barbie fans can chat online with B Chat and buy items with B Bucks.) There is also a growing list of noncompeting toys seeking to straddle the real and virtual arenas. Spotz, for instance, introduced by Zizzle last week, combines a Spotz button maker (retail $24.99) with an online Spotz site (free) where girls can design buttons with their own photos or art and interact with the Spotz girls.
Cards: With codes.
Cards: With codes.

Complicated combinations
"Whether it's a toy/digital combo or a TV/internet combo or all three, I firmly believe we're going to see these types of property proliferation explode, and we'll see ever-more-creative and perhaps complicated combinations of physical and digital product interaction," NPD analyst Anita Frazier wrote in an e-mail interview.

Webkinz parent Ganz is private and does not disclose sales, nor is it able to quantify the thriving economy it's spawned. (A single interactive toy retails for about $12.) But Ganz does seem to appreciate the market it's created. "We're really excited and still feeling very positive ... about seeing the potential in what we ourselves have released," said spokeswoman Susan McVeigh. "It's been interesting to see this become a whole new arena for everyone."

Ms. McVeigh would not say how many Webkinz have been sold, but according to internet-tracking site Hitwise, traffic to Webkinz.com has increased 1,300% year over year, with visitors staying for an average of more than 12 minutes. Webkinz.com had more than 3.7 million unique visitors in May, according to ComScore Networks.

Ganz this summer has launched trading cards, with codes and an online area at Webkinz.com, and Webkinz Charms, which also have secret codes, like those that come with the Webkinz plush animals, that unlock play in the site's Charm Forest. Just weeks after their launch, the Charms are selling out at specialty and gift stores. People are already preordering Ganz's Webkinz-brand clothing (with codes), plus lip glosses and body spritzes, for the fall.

Different economies
There are differences between the Apple and Webkinz extended economies, however. Ganz has been adamant about protecting its intellectual property and the Webkinz brand and has not allowed any licensing or use. Apple, on the other hand, mostly has let the iPod economy grow and flourish on its own.

The Webkinz economy could grow even bigger, given that the product has a foot -- and can ring up sales -- in both the real world and the virtual world. "The internet just opens up infinite worlds of possibility for all types of products," NPD's Ms. Frazier said.
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