Webkinz fad fades: Web-linked stuffed toys aren't hot stuff anymore
Filed under: Company News
When children write their letters to Santa this year, many will be skipping last year's hot item: Webkinz. The stuffed animals were so popular last holiday season it was hard for retailers to keep the toys on their shelves. The plush dolls appealed to children and parents by linking the physical toy with a virtual world, where kids play with online versions of their personal stuffed animals and spend virtual cash to clothe and feed them.Since then, demand has fallen off a cliff. According to The NPD Group, sales for Web-connected play toys have plunged 41% this year through August, marking the biggest decline among the 13 categories tracked by the market research firm, which provided its data to DailyFinance. The drop-off was so stark that at least two retailers disclosed the dwindling sales of Webkinz as drags on their performance in recent earnings calls.
"They were tremendous and they were a fad, so it looks like it's gone through a cycle," said Dan Crow, chief financial officer of Hastings Entertainment (HAST).
Customer frustration with Webkinz site crashes, the recession and market saturation -- think dozens of the toys already collecting dust in kids' rooms -- have taken the stuffing out of toy's sales. Susan McVeigh, a spokeswoman for Webkinz manufacturer Ganz, a closely held company, declined to comment for this article.
Hastings, which disclosed the plunge in Webkinz sales during its second-quarter conference call in August, declined to disclose the exact drop-off. The company will report third-quarter results on Monday. And TweenBrands (TWB), which owns the Justice chain of girls' clothing stores, said in August that its 12% decline in comparable second-quarter store sales was partly due to lower sales of Webkinz.
"The Kids Already Have 50 of Them"
It's a far cry from the halcyon days for the plushies, which sell for roughly $10 to $15 each. The toys burst onto the scene in 2005, one of the first lines to combine a physical plaything with an online world. Like that earlier stuffed animal fad, Beanie Babies, Webkinz have been issued in dozens of varieties, starting with fairly simple animals such as cats and dogs in its initial year. More recent varieties have included exotic species such as "Rainforest Boa" and a "Green Seadragon."
"Webkinz was the first to do a hybrid product, and it took off like a rocket," said Richard Gottlieb, CEO of USA Toy Experts, a consulting company based in New York. "But new people have been coming into the business," he added.
It's not only rival hybrid stuffies from toy lines such as Groovy Girls competing with Webkinz, but free online games that have taken market share away from the toys, he said. Club Penguin, from Walt Disney (DIS), for one, offers free online games to the same age group. And in a recession, many parents are choosing to go the free route.
"The kids already have 50 of them," said Justin Watkins, the owner of Webkinzinsider.com, a Website dedicated to tracking the online world. "People are still buying them, but not as much," he said, adding that some of the people visiting his site have hundreds or even thousands of the toys.
And parents and kids got frustrated with Webkinz site crashes and stalls. Frustrated users vented about difficulties getting onto the site through consumer forums such as My3Cents.com, or on sites like this one, at which a parent documented the traffic message encountered by his daughter on Christmas morning 2007.
This Year, Classic Toys Are Strongest Sellers
The plunge in sales has resulted in a glut of Webkinz in retailers' inventories. KidsTown, a high-end children's retailer based in Burlington, Vt., was selling the toys on clearance ($4 for a white dog Webkinz) this fall.
"Those are leftover from the heyday," said Tina Uzomba, buyer and operations manager for the store, one of the largest specialty toy retailers in New England. "We used to order 12 dozen at a time or more, because you couldn't keep them in stock." For this holiday season, she estimates she'll order two dozen because "I want to guarantee I'll get rid of them."
But Uzomba noted that Webkinz sales aren't the only ones being affected this year. Because of the recession, she has seen overall sales for her store decrease dramatically. Yet some items remain popular, she added. Which ones? Staples such as books, games and arts and crafts.
That's borne out by data from NPD. While overall sales of U.S. toys slipped 2% this year through August, arts and crafts, board games and building sets were among the categories with sales increases, the research company said.
Ganz has reacted by selling online-only pets as a way to reduce its reliance on sales of physical toys, said Webkinzinsider.com's Watkins. But Ganz is now competing with other companies which have more resources, such as Disney, Watkins added. "I don't think it'll ever become as popular as it once was," he said.
Customer frustration with Webkinz site crashes, the recession and market saturation -- think dozens of the toys already collecting dust in kids' rooms -- have taken the stuffing out of toy's sales. Susan McVeigh, a spokeswoman for Webkinz manufacturer Ganz, a closely held company, declined to comment for this article.
Hastings, which disclosed the plunge in Webkinz sales during its second-quarter conference call in August, declined to disclose the exact drop-off. The company will report third-quarter results on Monday. And TweenBrands (TWB), which owns the Justice chain of girls' clothing stores, said in August that its 12% decline in comparable second-quarter store sales was partly due to lower sales of Webkinz.
"The Kids Already Have 50 of Them"
It's a far cry from the halcyon days for the plushies, which sell for roughly $10 to $15 each. The toys burst onto the scene in 2005, one of the first lines to combine a physical plaything with an online world. Like that earlier stuffed animal fad, Beanie Babies, Webkinz have been issued in dozens of varieties, starting with fairly simple animals such as cats and dogs in its initial year. More recent varieties have included exotic species such as "Rainforest Boa" and a "Green Seadragon."
"Webkinz was the first to do a hybrid product, and it took off like a rocket," said Richard Gottlieb, CEO of USA Toy Experts, a consulting company based in New York. "But new people have been coming into the business," he added.
It's not only rival hybrid stuffies from toy lines such as Groovy Girls competing with Webkinz, but free online games that have taken market share away from the toys, he said. Club Penguin, from Walt Disney (DIS), for one, offers free online games to the same age group. And in a recession, many parents are choosing to go the free route.
"The kids already have 50 of them," said Justin Watkins, the owner of Webkinzinsider.com, a Website dedicated to tracking the online world. "People are still buying them, but not as much," he said, adding that some of the people visiting his site have hundreds or even thousands of the toys.
And parents and kids got frustrated with Webkinz site crashes and stalls. Frustrated users vented about difficulties getting onto the site through consumer forums such as My3Cents.com, or on sites like this one, at which a parent documented the traffic message encountered by his daughter on Christmas morning 2007.
This Year, Classic Toys Are Strongest Sellers
The plunge in sales has resulted in a glut of Webkinz in retailers' inventories. KidsTown, a high-end children's retailer based in Burlington, Vt., was selling the toys on clearance ($4 for a white dog Webkinz) this fall.
"Those are leftover from the heyday," said Tina Uzomba, buyer and operations manager for the store, one of the largest specialty toy retailers in New England. "We used to order 12 dozen at a time or more, because you couldn't keep them in stock." For this holiday season, she estimates she'll order two dozen because "I want to guarantee I'll get rid of them."
But Uzomba noted that Webkinz sales aren't the only ones being affected this year. Because of the recession, she has seen overall sales for her store decrease dramatically. Yet some items remain popular, she added. Which ones? Staples such as books, games and arts and crafts.
That's borne out by data from NPD. While overall sales of U.S. toys slipped 2% this year through August, arts and crafts, board games and building sets were among the categories with sales increases, the research company said.
Ganz has reacted by selling online-only pets as a way to reduce its reliance on sales of physical toys, said Webkinzinsider.com's Watkins. But Ganz is now competing with other companies which have more resources, such as Disney, Watkins added. "I don't think it'll ever become as popular as it once was," he said.
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Reader Comments (Page 1 of 2)
11-12-2009 @ 8:12AM
Heather said...
I stopped buying my daughter the webkinz after she lost the password then I was unable to get another one.
Reply
11-12-2009 @ 8:24AM
bevsaves said...
Fads come and go.
Reply
11-12-2009 @ 8:42AM
Terri said...
In an economic downturn, $10-15 is just too high of a pricepoint for a children's "collectible". Those who are still doing well with "fad" toys are the collectible eraser manufacturers ($0.99 pricepoint), the Kooky pen folks ($3-5 price point) and others who understand that kids will want more than one of everything and they can sell more at lower price points.
Reply
11-12-2009 @ 8:59AM
sillyjilly said...
Maybe they should treat their customers better!
Reply
11-12-2009 @ 9:03AM
THE TRUTH said...
What kids Like?.. It's really about what the Parent likes. kids are happy enough with and will play with items (toys) that an adult may deem insignificant. A reason last years "must have" has fallen from grace is due to the fickle (adult) being persuaded to buy something else after viewing the latest advertisement telling them why they should and how popular they may become when they do (buy it). Let the feeding frenzy begin followed by credit card remorse and bankruptcy. Oh yeah I almost forgot "MERRY CHRISTMAS" everyone!
Reply
11-12-2009 @ 9:21AM
James Albert said...
I was very disappointed when the time frame for the Webkinz ran out and I was unable to extend the time frame, for it, instead of buying a new one. Now, we don't even bother with it.
Reply
11-12-2009 @ 2:30PM
Shelleybean said...
That is exactly why we stopped too! My son went to his site, and because he hadn't added a new one in a while, they closed his account (he's seven). So, we decided to play more board games as a family, and probably had more fun.
11-12-2009 @ 9:34AM
bgl said...
With so many people out of work, paying $10.00 to $20.00 on a fist-sized stuffed animal that really should cost about $5.00 is just not realistic. The toy costs too much and the website is horrible. Lower the price on them, do some web-fixing and get with the times!
Reply
11-12-2009 @ 9:56AM
EP said...
My daughter has about 15 Webkinz but she has such a terrible time just logging in to the website, she's basically just given up.
Reply
11-12-2009 @ 10:05AM
Rlangg said...
Customer frustration with Webkinz site crashes, Customer frustration with Webkinz site crashes, Customer frustration with Webkinz site crashes, Customer frustration with Webkinz site crashes. That about sums it up. My daughter still loves her Webkins but Customer frustration with Webkinz site crashes,Customer frustration with Webkinz site crashes,Customer frustration with Webkinz site crashes has really ruined the experience,
Reply
11-12-2009 @ 11:01AM
louise said...
My 7 yr old son and I love Webkinz. They have so much more to do now. Webkinz Park w/swings, slides,ice cream man,etc. You can chose safe chat online with fans using only there words or use your own words.(up to parents) . Kin style(make your own clothing). Magical Forest, All new Zum World with Zum buddies for your pet.They are so cute. They interact together(like play soccer with each other ). You can go Deluxe and do so much more. Proud owners of 47 Webkinz pets and 1 Lazy Zum named Zlock and 1 Zippy Zum named Zed. Give it try , Gotta Love the Webbies.
Reply
11-12-2009 @ 1:05PM
Ian said...
only problem is to do all that big, fancy stuff you gotta pay more! not happenin in this house!
11-12-2009 @ 10:28AM
rgaither said...
These were retarded from the start. Kids will find the best toys are usually the cheaper ones. How will a $10-15 Webkinz look in 5-10 years compared to a $1.00 Hot Wheels car? The webkinx will look really good because the kid didn't play with it and got bored, while the How Wheels car will most likely be in well played with conidtion. Tore up paint, trashed wheels, maybe even smashed in some areas. Lets also buy kids something other than this unhealthy, boring techno junk and have them outside. In my neighborhood, kids hardly ever go outside, even on beautiful days in the summer! Buy them a bicycle, a swimming pool, a Power Wheels, something!
Reply
11-12-2009 @ 10:43AM
Abraxus said...
It's true, parents and other adults, buy the toys - WE should be telling our kids they can't have 10 Webkinz toys, etc. My daughter is not hard up for toys by any means, but we get a lot of them in consignment sales (advertised all the time on Craigslist) and we pay 10-20% of the retail price for toys that look new and obviously weren't played with much. Once my daughter tires of them we give them to the Salvation Army so someone else can enjoy them. I won't say we don't buy new toys, we do at Christmas and on birthdays, but we don't allow her to have the same to multiple times as we think it is a waste of money and we are trying to teach her that too. I mean, why do you NEED to have 10 Webkinz like one blogger said? Having a few Barbies is different as they are different dolls and foster creative game play with friends, but my daughter has tons of soft toys and there are only so many I can pick up off the floor and put back on the bed again!
Reply
11-12-2009 @ 10:46AM
jenny said...
MERRY CHRISTmas!!!!!!!
Reply
11-12-2009 @ 11:13AM
Nancy Bozentka said...
I think you are missing the big picture. My grandson is 10 yrs old.....He may get a little bored with the Webkinz toys but he usually comes back to them. For younger kids it teaches them to spell and to take care of the pets. The games are not violent and there's a lot to do on the website. I watch a 6 yr old and he still loves his pets. He has never had a hard time logging on to the site. I'm 62 and every now and then I'll play the word games to keep my mind going.....LOL....I still think they are good for kids.
Reply
11-12-2009 @ 11:34AM
Janelle Oswalt said...
I bought alot of webkins but got tired of the site crashing and couldn't get on so I donated my webkins to the children hosiptal in the area I live in
Reply
11-12-2009 @ 11:51AM
amy3e said...
I agree.. my nieces have like 15 each and they were so into them a year ago.. now they sit and collect dust.. With so many people struggling these days.. people should take the focus off all the pricey gift ideas out there.. spend time with the family and give gifts that are thoughtful. There are some great ideas for Thanksgiving and Holiday Family fun here
http://www.celebrationideasonline.com/index.html
Enjoy the season and be realistic with your holiday shopping budget.
Reply
11-12-2009 @ 11:51AM
Rita said...
I still enjoy them, but I was glad to see the virtual store, because who wants that many plushies. I have to say I think they should lower the price of the virtual ones (they are the same price as the plushies with the tags). The "only virtual" Webkinz should be cheaper, as you have nothing physical to show for your purchase.
Frustration with so many glitches is a huge contributing factor. My sister claimes this as her reason for falling out of love with them. If there is an error or online injustice in any game or contest, Ganz never gives the benefit of the doubt to the customer (which is both cheap & foolish).
I belonged to Neopets (still do, but I am inactive) for years and I never experienced so many glitches or frustrating moments. Neopets was long before Webkinz - and it is FREE. Webkinz began marketing plushies with their world first & their graphics (especially where the homes are concerned) are much better though.
Finally, Webkinz themselves aren't necessarily plunging, this holiday will be down across the board, as people are finding ways to save this season. White Elephant gifts (I never would do this), swap meets, and garage sale buys are the going thing. I had a garage sale this weekend & buying was brisk! But children and pets always come first for gifts (even in hard times) so Webkinz will still do better than many other retailers hoping for some of our dollars this quarter.
Reply
11-12-2009 @ 2:33PM
bobby said...
Kids have way to much these days, they get bored very easily. We use to get fruit and clothes for Christmas, the only time we got bored is when it would rain all day and we couldn't go outside.
Reply