Publicity about toy shortages feeds the frenzy

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The plot line of the holiday film "Jingle All the Way," in which Arnold Schwarzenegger's character doggedly pursues a popular, out-of-stock toy, is playing out all too realistically. An unusually high number of hot-selling toys are selling out as fast as they're shipped to stores, sending shoppers scrambling.


Publicity about the shortages is further heightening demand for certain items, including Tyco's Tickle Me Elmo doll, Mattel's Holiday Barbie, certain "Star Wars" figures from Hasbro and the $300-plus Nintendo 64 videogame machine. "Publicity about the shortage of Tickle Me Elmo dolls is creating even more shortages, but we're still shipping products into stores," said Neil Friedman, president of Tyco Preschool, which introduced the $28 giggling, vibrating doll for younger children earlier this year. Tyco pulled its TV spots for Tickle Me Elmo from the air Dec. 6, when skirmishes erupted among customers at some stores over the last doll in stock. D'Arcy Masius Benton & Bowles, New York, is the agency. Mattel also admits publicity about potential shortages helped turn the 1996 Holiday Barbie into a scarce item; last year, the company ran short of the highly popular doll product and was forced to issue thousands of IOUs, resulting in massive publicity.


This year, though Mattel dramatically increased production, Holiday Barbie is selling faster than ever. "Last year's sellout created a lot of awareness among people who didn't even know what Holiday Barbie was, and we attribute a lot of this year's sales momentum to that new level of interest," said Lisa McKendall, Mattel's director of marketing communications. "We're still shipping Holiday Barbie, and we're not stopping," Ms. McKendall said. Nintendo of America also increased production of its Nintendo 64 to meet demand; mass merchandise and electronics outlets are notifying interested customers when the units arrive. Despite the fever for certain items, analysts say total toy industry sales will increase only an average of about 5% this year, to an estimated $20 billion.


Industry analysts attribute the rash of shortages to new marketplace controls, as well as manufacturers and retailers that approached the season concerned about oversupplies. "We're definitely seeing tighter supplies this year, because competition has caused retailers to reduce inventory and manufacturers are being cautious," said Gary Jacobson, a toy analyst with Jefferies & Co. Although shortages frustrate consumers and retailers, manufacturers don't hate them. "There's no doubt that toy marketers benefit from the perception of scarcity, although they'd rather have the toy in stock when it's in demand," said Sean McGowan, an analyst with Gerard Klauer Mattison.


Still, it seems unlikely that a marketer can engineer its own product sellout. Earlier this month, Playmates Toys went so far as to announce that it anticipated a sellout of toys tied to the Warner Bros. film "Space Jam," though no such product shortages have been reported. " `Space Jam' toys have not made it onto the sellout list yet," Mr. Jacobson confirmed.

Copyright December 1996, Crain Communications Inc.

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