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Opinions | Supply chain issues could fuel a holiday toy craze

The Washington Post logo The Washington Post 4 days ago Abby Whitaker
The Cabbage Patch Kids is one of many Iconic toys. (Bill O'Leary/The Washington Post) © Bill O'Leary/The Washington Post The Cabbage Patch Kids is one of many Iconic toys. (Bill O'Leary/The Washington Post)

As the holidays near, toy companies and retailers warn that some presents might be harder to find as businesses struggle against inflated shipping costs, labor shortages and other supply-chain issues.

The result could be a phenomenon only experienced a few times in the last four decades: a toy craze, which erupts when a toy captures the hearts of children, producing a feeding frenzy around the holidays as panicked parents try to secure one. The ensuing craziness can fuel a new line of products — or even save a famed television show.

In 1977, 22-year-old Xavier Roberts created Cabbage Patch Kids, making each of his one-of-a-kind “Little People” by hand. The soft, squishy baby dolls had round features and eyes set a little too close together.

Roberts showcased his creations at “Babyland General Hospital,” a recreation of a maternity ward where employees portrayed nurses delivering babies from cabbages. Children watched the baby’s birth, swore an oath to take care of it and signed adoption papers. Instead of prices, babies came with “adoption fees,” ranging from $125 to $1,000.

In 1982, a small manufacturing company, Coleco, licensed the “Little People” rebranding them as Cabbage Patch Kids. Retailing at $20, the dolls were no longer hand-stitched but were still one-of-a-kind and came with a birth certificate.

Cabbage Patch Kids hit the shelves in June 1983. Coleco launched an ad campaign targeting parents with commercials in adult programming and a feature on NBC’s “Today” show. The ads extolled how the wholesome and nostalgic dolls — which needed loving homes and parents — would teach children to be kind and nurturing.

The campaign hooked parents. Demand quickly exceeded Coleco’s expectations and their supply. Stores that stocked 200 dolls were flooded with thousands of parents.

Scarcity only made the dolls more popular as the holiday season approached. Securing the must-have toy became a symbol of status, even as interviews revealed that most shoppers found the dolls to be ugly. “I don’t like their faces,” one shopper remarked, “but I want one.”

Grown women ripped dolls out of the hands of children. A stampede of shoppers trampled a woman in Virginia, breaking her leg. A West Virginia store clerk attempted to protect himself from angry shoppers by climbing on the store counter and brandishing a baseball bat.

Shoppers with connections had better luck. A few days before Christmas, first lady Nancy Reagan visited a Long Island hospital where she gifted a dozen Cabbage Patch Kids to children. When asked how she got so many of the coveted toys she said, “It helps to have friends.”

By the end of the holiday season, Coleco had sold 3.2 million dolls, grossing $65 million.

The craze would continue for two full years. Parents camped out in front of department stores and joined 10,000-person waiting lists. By November 1984, Coleco had sold $250 million worth of dolls with $300 million in back orders — five times more than the other must-have toy that season, Mattel’s Rainbow Brite.

Sales kept exploding for another year, but by late 1985, supply finally met demand. Parents could find a Cabbage Patch Kids without physically fighting or haggling for the best price. The craze was over.

Toy inventors Greg Hyman and Ron Dubren planted the seeds for the next toy craze in 1992. They presented Tyco executives with a toy monkey that laughed when someone touched his belly. The executives liked the idea but wanted to tie it to a licensed character.

In 1996, they landed on Elmo, a popular secondary character on “Sesame Street.” Crucially, there were no Elmo toys yet, and his high-pitched giggle and loving personality made the character a perfect fit. The final product was a 17-inch plush doll that laughed when you pressed Elmo’s belly. If you pressed it again, he laughed harder and started to shake. His laughter escalated until he exclaimed, “Oh boy, that tickles!”

A Tickle Me Elmo toy. (Bill O'Leary/The Washington Post) © Bill O'Leary/The Washington Post A Tickle Me Elmo toy. (Bill O'Leary/The Washington Post)

Because of its high price for a plush doll, Tyco’s public relations team needed a strong marketing plan for the $30 toy. They recalled how a “Today” show appearance boosted Cabbage Patch Kids sales in 1983.

So Tyco sent comedian Rosie O’Donnell — host of a new talk show — a Tickle Me Elmo doll for her son. He loved it. O’Donnell’s team asked for enough Tickle Me Elmos to give to her audience on-air. Within a week of the giveaway, Tyco’s Vice President of Marketing Gene Murtha remembered, the company’s sales estimate grew tenfold.

Parents trampled each other and store clerks to get their hands on the fuzzy red Muppet. One Walmart worker caught in a stampede suffered injuries including a broken rib and a concussion. Tyco quickly sold out of their stock of 400,000 Tickle Me Elmos and rushed to make more. But the motor that made Elmo laugh and shake was hard to produce, making ramping up production difficult.

Once again, scarcity only made parents want the doll more. “It’s keeping up with the Joneses at the nursery school level,” author Jack Solomon remarked. Celebrities and politicians tried to wield connections to get a doll. Rumors abounded that John Gotti, Jr. went on a late-night shopping spree at Toys R Us, purchasing a Tickle Me Elmo when the store was supposed to be sold out. Manufacturers of the other must-have gift in 1996 offered Tyco a trade: a Nintendo 64 for a Tickle Me Elmo. Vice President Al Gore even tried to get a doll, calling Tyco’s Vice President of Sales Jerry Cleary. “I told my secretary to tell him I’m Republican,” Cleary said.

As Christmas neared and parents grew increasingly desperate, they turned to the black market. Across the nation, newspaper classified pages listed Tickle Me Elmo dolls for anything between $75 to $1,000 per doll. One bold seller asked for $2.1 million. Local stores and radio stations auctioned dolls, some going for as much as $3,500. Savvier shoppers used a brand new online platform: eBay.

By the end of the holiday season, Tyco sold 1 million Tickle Me Elmo dolls. The following year, they sold another 3 million dolls. This success helped save “Sesame Street.” The PBS show had suffered a ratings slump since the premiere of “Barney” in 1992. Tickle Me Elmo brought viewers back, and made Elmo the star. In 1998, “Sesame Street” introduced the first major format change in nearly 30 years — a stand-alone segment called “Elmo’s World.”

Tyco tried to replicate the toy’s success with new iterations, from Chicken Dance Elmo to TMX (a 10th anniversary edition that rolled around on the floor). None recaptured the mania of the first. Holiday toy crazes only happen with the right combination of a unique product and insufficient supply, with media coverage and marketing escalating demand.

In fact, it took 20 years for another toy to mimic the Elmo craze: the Hatchimal in 2016. Capitalizing on the popular YouTube trend of unboxing videos, Hatchimals are stuffed creatures encased in a plastic egg. It takes holding, rubbing, tapping and moving your egg for the creature inside to start to hatch. After 30 minutes of pecking and cooing, the Hatchimal breaks free of its egg. It is an unboxing video brought to life.

Hatchimals retailed for $60 but they still flew off the shelves. Like Coleco and Tyco, manufacturer Spin Master underestimated the demand.

Once again, the more scarce the toy became, the more children, and their parents, wanted one. Parents again turned to secondary markets, this time on Facebook where they created trade networks with other parents around the globe. Scalpers on eBay sold the toy for three times the price.

By the end of the holiday season, Spin Master sold over 2 million Hatchimals, making $80 million in revenue. But the bigger success was launching a new brand. Like Cabbage Patch Kids and Tickle Me Elmo, once the initial holiday craze faded, toy sales continued and Spin Master expanded the Hatchimals toy line and raked in the profits.

Adrienne Appel, senior vice president of marketing communications at the Toy Association, a nonprofit trade association for toy businesses, recently commented that because of ongoing supply-chain issues, toy experts “don’t think there is necessarily going to be one standout toy like in years’ past. Instead, the hot toys will be the ones that are actually in stock.” But history tells us otherwise. Scarcity and heightened media attention are two of the elements in toy crazes, so I wouldn’t count your toys before they hatch.

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