Business Excellence Awards
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In early 2011, Hasbro Inc. CEO Brian Goldner convened a team of designers, engineers and marketers to figure out the Next Big Toy.
They asked themselves a simple question: “What’s the most alive thing a toy can do?” After eight months of prototyping and kid focus groups, they had their answer: reboot Furby, the cuddly robot that seems to develop a personality as you play and was one of Hasbro’s biggest-ever hits.
In resurrecting a plaything that had its heyday when Bill Clinton was president, Hasbro is betting the toy will appeal to adults who played with Furby as kids, as well as tech-obsessed children this holiday season.
Still, a retro toy from the 1990s will be hard to market as a true innovation, said Sean McGowan, an analyst for Needham & Co. And at $60 – double the original’s price – it may be a tough sell for shoppers recovering from the recession.
“I don’t want to denigrate the technical innovation,” said McGowan, who is based in New York. “In terms of the basic toy, yes it’s probably better, but it’s the same.”
The Furby reboot is one of the most expensive and complex product-development projects in the company’s history. The largest U.S. toy sellers have also invested in its success. Wal-Mart Stores Inc., Target Corp. and Toys “R” Us Inc. all put Furby on their lists of hot toys, a sign they’re dedicating plenty of shelf space to it.
Pawtucket-based Hasbro could use a hit after revenue declined 7.6 percent to $1.46 billion during the first half of this year and is projected by analysts to be little changed in the quarter ended Sept. 30. The toymaker traded at a premium on a price-to-sales basis to the 80 companies in the Standard & Poor’s 500 Consumer Discretionary Index from early 2003 through late 2011. It peaked at a premium of more than 100 percent in 2008.
In part, the company’s sagging sales reflect an industry that’s being transformed by the surging popularity of mobile devices. As more kids of all ages turn to tablets such as Apple Inc.’s iPad for play, the more Hasbro and competitors such as Mattel Inc. need to invest in innovation, McGowan said.
Hasbro’s innovation is “pointed in the right direction, and they are certainly taking it seriously,” McGowan said. “There just needs to be a lot more, and that’s true for the entire industry.”
The new Furby is the first of more than 20 products the company plans to bring to life with technology, said Kenny Davis, the marketing director of new brand franchises, including Furby.