Margin magic: collectibles

Discount Store News, Feb 9, 1998

Collectible toys created for the mass market are something of an oxymoron--but a reality. After all, how can a valuable collectible be distributed through the mass market?

Increasingly, though, mass has become fertile ground for affordable limited-edition toys such as Barbie dolls, die-cast racing cars and action figures that appeal to adults, especially Baby Boomers.

In fact, the market for adult collecting grew by 11.9% in 1996 to $9.1 billion. The market is expected to continue this upward trend, fueled by a growing interest in vinyl dolls, up 15.7% to $941 million, die-cast cars and replica models, up 28.7% to $513.5 million, and collectible plush and teddy bears, up 24.6% to $441.1 million, according to Unity Marketing, Stevens, Pa.

Nostalgia is a big motivator for collectors, whose prime collecting ages are 35 to 64.

For mass market retailers, collecting is a growing business, fueled by annual additions to the Barbie collector series, the popularity of stock car racing, sports heroes and everyday street cars, among others.

Some retailers are even catering to the trend, among them Ames, which has created a niche market for itself with local collectors. The discounter has increased the space allotted to scale vehicles particularly attractive to collectors. It's a business that Kay-Bee, Hills and others enjoy as well.

K*B, for example, offers an assortment of collectible toys that soon will include Funrise, which will begin offering firefighter vehicles for firemen in exact replicas of real fire equipment, plus die-cast cars by Maisto and an assortment of collectible Barbies. A particularly popular collectible, and an exclusive to K*B, was its 1996 G.I. Joe in full Military Police regalia, which was completely sold out.

"The hardest one to deal with is the action figure collectibles, especially Star Wars," said Sal Vasta, senior vp, gmm. The collectors call the store asking when the truck will arrive and then show up wanting to buy 10 to 12 pieces, often completely emptying the shelves.

Hills sees adult collectibles as a good business, even a profit center. But the business "can be treacherous" because of the need to constantly offer fresh merchandise, said Fred Hurley, divisional vp, toys and seasonal.

Hills offers a sampling of Barbie collectibles, large-scale die-cast vehicles, the Starting Lineup sports heroes, high-end Matchbox vehicles, and each year, an exclusive Hot Wheels car in 1:64 scale, die-cast, and produced in a box in limited-edition quantities, for $20.

Next spring, Hurley said Hills will offer exclusive NASCAR dolls, taking advantage of the popular license and further tapping into the 40% to 50% margins in collectibles.

For the collector, the thrill comes in the hunt, offered Pete Henseler, vp of marketing for Racing Champions, which produces and markets collectibles, particularly die-cast vehicles and pewter figurines. Key to collectibles is fresh merchandise on a consistent basis--which attracts repeat visits--and excellent communication. Collectors demand up-to-date information on product numbers, availability, color and packaging.

"Collectors are savvy, and they put value into their hobby," Henseler stressed.

To adequately communicate with collectors, Racing Champions launched a Web site last year that gets 2 million hits a month.

This year, Racing Champions is emphasizing NASCAR's 50th Anniversary with a collection of 50 1:64-scale replicas from 1948 to 1998. Production is limited to 19,998 of each car. It also is producing NASCAR Legends, a collection of over 50 1:64-scale replicas of the sport's most legendary drivers. Production is limited here to 19,998 of each car.

Also for 1998, Racing Champions will debut WCW Nitro Street Rods, a new line of die-cast vehicles created in conjunction with World Championship Wrestling, and Police USA, a line of 1:64-scale authentic reproductions of classic city, county and state police cruisers spanning the last 60 years.

Coming in May will be Star Trek. Champions 31/2-in. highly-detailed pewter figures and vehicles on a base.

For Tiger Electronics, Star Wars has been an extremely popular collectible.

Jeff Jones, vp marketing, said Tiger's Storm Trooper Room Alarm, a 13 1/2-in. non-articulating figure with a heat sensor, has been very popular. Once the alarm is activated and adjusts to the ambient temperature in the room, a person walking by can set it off, producing three audible responses: "It's them, blast them," "Those are the one's you're looking for," and the sound of a laser blast.

"This appeals to an adult because it is very well detailed and large," he said, noting that Tiger is introducing a Boba Fett character, a bounty hunter employed by Jabba the Hut and Darth Vader to find Han Solo.