Zhu Zhu Pets: Here today, gone today -- hamsters playing the disappearing game

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UPDATED (12/1)
The elusive Zhu Zhu Pets faux hamsters continue to tease those who covet them. They show up at a handful of major retailers and disappear as quickly as they showed up. Most Zhu Zhu hunters didn't even know they were there.

Such is the life of the hot toy of the year -- following the likes of Furby and Tickle Me Elmo in the annals of toys whose scarcity was part of their allure.

Zhu Zhu Pet mania is bordering on the absurd -- creating a secondary market where the tantalizingly inexpensive toys ($8 at Walmart) become, well, expensive toys (about $60 for one on Amazon.com).Getting the little critters has parents, grandparents,. aunts and uncles (and profiteering eBay sellers) on a single-minded mission: to catch one or more Zhu Zhu Pets. I walked into a Toys R Us a few weeks ago and picked up the yellow one called "Pipsqueak" from a pile sitting at the customer service desk. People just walked right by them, not realizing that they were ignoring a major find.

After getting an email alert of their arrival on Saturday night, I waited outside starting at 3:45 a.m. Sunday to get "Mr. Squiggles," the brown one, along with an also hard-to-get accessory. And, then, today (12/1) all the waiting from Sunday paid off after a manager tipped off the early birds when the next shipment of the all important Fun House was coming. I walked in the front door during regular hours and picked one from a stack of a couple dozen. Joy.

And, finally, even though it's overkill, I got an email alert from a robot searcher (zooLert.com) that more critters were available and again paid the normal retail price. The message here: Patience and a ridiculous commitment to ensuring your kid gets what they think Santa is manufacturing at the North Pole will probably deliver you some Zhu Zhu joy. And, also, I need to let go of my obsession of beating the challenge to get this toy rodent set and all its accoutrements.

Sadly, the profiteers are playing Grinch this holiday season. Stories abound of men scooping up the entire inventories of Zhu Zhu stuff at Target and Walmart stores -- making those waiting to get them for children quite angry. And, alas, the profiteers toss a lot of salt in the wounds by getting these now-desperate Zhu Zhu hunters to pay over-the-top prices. For shame Grinch-like men.

You won't see too many of these people (who I hope get stuck with lots and lots of these things when supplies increase) at Toys R Us, where they have instituted a rationing plan of one of each item per customer.



Some retail analysts have said stores under-ordered in general as a conservative strategy in a down market. The consequence of that is not having the products people most want when they want them. As Christmas draws closer, it will become clear whether that was the problem or if consumers were being drawn in by a clever ploy to make desired items appear in short supply.

What is going to be on the list of most-desired toys isn't that big of a mystery to the retailing giants, who use their considerable tools and resources to figure it out.

"Select Toys R Us stores in Phoenix tested Zhu Zhu Pets earlier in the year," Toys R Us spokesman Bob Friedland told WalletPop. "The fun and interactive nature of the Zhu Zhu Pets hamster excited kids. During the test, we saw Zhu Zhu Pets selling well and knew it would be a hot toy."

Such testing is done regularly around the country, he said. Friedland said the issue of supply should be directed at manufacturers.

Mike Nakamura, CEO of the Chicago-based toy company Senario, told WalletPop the Zhu Zhu phenomenon seems legit.

"It follows the same format as the Beanie Babies or Webkinz. It's collectible," he said. "Those don't come along all the time."

Dan Fishback, CEO of DemandTec -- a company that turns consumer behavior into science, said even the idea that a toy can be hard to get can stimulate demand.

"It has to be perceived that it's hard to get," he said in an interview. "It doesn't have to be hard to get."

Thinking back at some past hits, such as Tickle Me Elmo, Fishback said it is less about the toy and more about how it is positioned.



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"The product has the least amount to do with it," he said. "The discretionary toy has more to do with marketing and more to do with understanding the market you are going after."

As for Zhu Zhu, which has done little advertising to spur its big build-up: "I think it's great marketing... They're creating the buzz without spending any money on advertising."

What has happened in the interim is the growth of a secondary market -- people who were able to get some of the toys and sell them at a significant premium.

If there really was a problem with under-ordering, toy manufacturers said being able to build back inventory from Chinese production plants is a challenge to do in short order.

"If a product takes off faster than you, as a toy company, has forecast it, your ability to replace that product is based on your supply chain," Scott Levin, CEO of U.S. toy manufacturer Step2 said in an interview. "If you don't have it in inventory to replace it immediately you have to re-order and there's longer lead times."

When you're dealing with Chinese factories, he said, it could take 90 days to retool a factory, manufacture the products and have then shipped to the U.S., Levin said. Step2, which makes molded plastic toys such as play kitchens and sandboxes, produces them in U.S. factories and can make the adjustment far quicker, he said.

Joe Battat, CEO of toy maker Battat Inc., said he tries to focus his company away from trying to develop the one-hit wonders that might light it up one holiday season. Instead, he told WalletPop, the goal is to produce toys that can remain on the shelves for years. His line of Our Generation dolls, a low-price version of Mattel's American Girl, have steadily grown their sales over the past several years, he said.

Battat said he'd rather have more of that kind of toy in his lineup than a product that flames out after a single season. He explained that it could take three years of good sales to recover all the development costs that go into a new product.
"As manufacturers, what happens with people like us, we try to come up with items that are more evergreens," Battat said. "We want to build a following with consistency...Furby lasted for one year. The guy who owned the company sold it to Hasbro. A year later it was out. Transformers went away and now it's big.

"You don't know what's going to grab the attention of kids. Kids are very hard to understand "

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