If I was Ty…

Beanie babies celebrated their 10^th Birthday in 2003, following the craze of the late 1990s. Two years on, and Ty Inc look further than ever away of regaining that popularity that they once had. Originally aimed primarily at the gift market, Ty gained a secondary consumer base in the late 1990s in the form of collectors. With little secondary market value since 2000, Ty seems to be losing the Collectors market. After a while, with collectors slowly giving up on Ty’s products, the company now seem to be realising that their focus needs to move away from the collectible market and towards the gift market. After years of unsuccessfully trying to regain collectors, Ty is obviously beginning to give up here, and move on to develop gift items. Gifts are a necessary product, and will be aimed towards a mass market, compared to the niche collectors market that they once focused on. Of course, there is hot competition in the gift market, from companies that have built up strong customer bases and made a name for themselves as major gift suppliers.

The Birthday Bears, Graduation owls, etc seemed to be the first sign of Ty’s more specific products, but still the companies main focus seemed to be on collectors. More recently, more and more specific products have been introduced, such as #1 Teacher and You’re Special. Both of which are Ty Store Exclusives. Personally, I feel this is bad placement from Ty. The Ty Store, seems to me, the only real ‘collectors-only’ place to buy. When Tradee was first introduced, the Ty Store, was a place for collectors to buy rare products that wouldn’t be available in the shops to the gift-customers, therefore allowing the secondary market value to increase and the collectible aspect of Ty products to be exciting and ever changing. With the number of collectors only a fraction of what it used to be, the Ty Store seems to sell the only products that may be valued slightly higher than the retail products. I would have thought that aiming gift products at the mass market, would involve better placement that what Ty is doing so far. With other gift companies thriving by selling products in card and gift shops, Ty is losing out on both gift purchasers and collectors. Few collectors will buy gift items from the Ty Store, unless buying as a gift, and very little of the mass market will look on Ty’s online store for a gift. If I was Ty, I would focus on selling more general beanies on the Ty Store, and leave the occasions, holiday and gift products to Hallmark. Most people will buy gifts for friends and family when browsing the shops on a shopping trip…not by going online and looking for a specific product. To me, this seems to be a mistake, and I feel Ty is missing out on sales from both the mass market and the niche collectors market here.

Ty has a very small fan base left, mainly due to the lack of excitement. Decrease in demand for Ty’s products have left the secondary market in despair. Values on the secondary market are often as low as wholesale prices. During and after the craze, the number of introductions dramatically increased. True, Ty Inc is a primarily a toy/gift company and a wide selection of products would lead to a success of the brand as a toy/gift brand. But, Ty took advantage of the huge number of collectors, who were willing to buy anything and everything that Ty introduced. Ty drastically flooded the market with his products. With beanies filling shelves, it seemed that supply was getting dangerously close to demand. For the company, at the time, this was great. Demand was huge, and Ty was successful in coping with demand. But for the collectible market, this was the beginning of the end. Ty introduced more and more different designs, and as demand decreased, supply did not. Secondary market values dramatically decreased because there was no need for the secondary market. People were able to buy whatever they needed in stores, as there was plenty of stock on the shelves. The secondary market dealers were not making a profit. People were no longer willing, or needing, to pay higher than retail price for products. Now, there seems to be no demand whatsoever for the secondary market, and with supply outweighing demand on the shelves of retailers even, secondary market values are close to wholesale.

So, If I was Ty…what would I do? Of course, I am only going by what I see in my local retailers…Ty’s sales could be misleading based on my local area. But, there is no denying, the collectible market is hardly existing any more. Ty is a gift company, but we all can remember the time when Ty’s huge annual revenue was mainly due to the collectors. The gift market is much mellower, but at the same time, much less risky. If I was Ty, I would try to recreate the excitement of the craze to revive the secondary market. If customers feel that their purchase may give them a profit, they would be much more likely to make future purchases. The craze of the 1990s, was due to value, or more like the possibility of profit. People believed that beanies were an investment, and more and more people became involved with Ty products because of the speculation, leading to the increase in demand and the lack of supply, followed by the inflation of secondary market prices. Ty needs to make people speculate that certain products could be an investment.

So, what would I do to achieve the excitement and speculation that there once was? Ty introduces products regularly, and states where and when they will be available. Of course, due to ordering and retail customers, this is necessary, but on what scale? I would list products as part of the monthly introductions, but I would keep a few surprises up my sleeve. For example: Country exclusives are really the only thing that gets collectors excited now, and still, the excitement is not what it once was. Ty makes the exclusives pretty widely available at the moment, again making supply equal or out number demand. Firstly, if I was in the same situation as Ty, I would put more limits on ordering. Instead of flooding the market with several deliveries of 12 items, I would ship maybe only 6 items, and in only one order. Of course, Ty’s costs would increase per item as Ty Inc cannot take advantage of good economies of scale, like they would mass producing a huge number of each design. This again would be the downside to quickly retiring products soon after production begins. It would hopefully be good for the collectors, but is the increased production costs worth the increase in collectors?

Back to the subject of country exclusives: Why announce which are going to be exclusive? At the moment, Ty introduces country exclusives with a big fanfare announcement. Sure, this makes collectors aware that they need to get searching on eBay for this, but why tell them? Surely, it would be more exciting to find out for themselves? If I was in control of Ty Inc, I would introduce less stereotypical exclusives. The collectors in England are fully aware what their flag looks like, they don’t need reminding what country they live in. Sure, patriotism is good for the country, but do collectors really want yet another red, white and blue design? Imagine, the front page of Ty’s website with the latest introductions displayed. Maybe 6 beanies will be introduced this month…none of which look like they ‘belong’ to any country, nor are they holiday specific for the gift market. If it was me, five of the six products would be available to everyone. But one of the products, is exclusive. Collectors don’t know which one is the exclusive, nor which country it’s exclusive to. The designs don’t give anything away, and the only way collectors will find out is by talking to each other. It may be even more exciting if the country that gets the special exclusive misses out on one of the five more common products. That way, every country to which Ty distributes to, will get five beanies. No one will know where the exclusive is…not even the country that has the exclusive as they will have five just like everyone else. Maybe, if this happens every time a mass introduction takes place, the secondary market may pick up again, as collectors will hope for a valuable product when they purchase their next beanie.

Random gift customers in Hallmark do not know who Ty Warner is. Collectors do. To collectors, Ty is a celebrity, and he knows it. So why doesn’t he use his celebrity status to regain collectors interest? Ty Warner reminds me of Willy Wonka, and he’s been known to agree. A ‘golden ticket’ type of competition would sure get collectors talking. I know for sure, I would certainly love to see what is inside that beautiful building in Oakbrook, especially if Ty Warner was the tour guide. Clubby IV caused a collecting frenzy – but it was not exclusively the prize though that caused such a commotion, but the actions of the secondary market dealers. It was only a bit of careful tape peeling and removal of a sticker that could allow dealers to see if Ty had signed it before selling it. If Ty ever did such a promotion again, there would be a need for protection a little better than tape and stickers. Maybe a scratch card hang tag, promotional barcode or voucher given with purchase that could give children and collectors the opportunity to input a ‘one-use-only’ code into the website to see if they are a winner. Not only could sales increase due to the possibility of being a winner, but it may bring more people to the Ty.com website and allow them to get more involved.

Maybe, however, Ty is not diversifying enough, or to the right market? Originally a gift and toy, beanie babies developed over the years to cover the needs of collectors. Collectors were bringing the money into Ty Inc, and the original purpose may have been slightly forgotten along the way. The Ty website seems to be more of a hang out for collectors rather than a kids website. Ty’s website has been virtually the same for the past 6 years. The Ty Cyberboard seems to be a collectors only area, and the Ty Store and adverts for MasterCard seem to show the website as less of a kids website. Not to compare Ty with Depesche and Carte Blanche like I normally do, but I feel that Ty’s website pales in comparison, especially with the Diddl website. Carte Blanche’s Me To You website seems to be again a collectors space, but I feel that Ty could benefit from more interactive features. If I was Ty, I would totally redevelop the website. I would make it a much more interactive website, especially for children. More games, colouring pages, educational pieces, chat room, etc. would keep children coming back day after day. Ty seems to be less enthusiastic about feedback and comments compared to others. All around competitors websites are buttons, constantly reminding children to email, just to say hi. Ty doesn’t seem to be that involved with customers, and maybe it’s this distance that gives the competitors an edge? Sure, a change in website wouldn’t directly increase sales, but with increased interaction and communication between the company and customers, could result in a loyal fan base and children visiting the website could be made aware of new introductions while they play, having an indirect but positive effect on sales.

At the February 2005 gift show in Birmingham England, Ty Europe introduced the Pinkies range, as well as Angeline. To be honest, Ty, to me, has never seemed to leave any surprises for England’s gift fairs, and has always seemed to put America first, so when we were given the first viewing of the new lines, I was gobsmacked. Not only was the attitude of Ty Europe much more welcoming and helpful than usual, but the introduction of Angeline, seemed to announce to me the turning towards a gift market. Angeline, could be the character product that could be a potential money earner for the company. With only a small reference to the Beanie Baby company on the back of the box, Angeline seems to be a completely separate line away from beanies. I believe Angeline should have her own website. I think that she is a character that could become a brand new craze. Character products seem to be much more popular at the moment, particularly in the gift market, as people fall in love with the particular character and become loyal collectors based on the love of the one design. Diddl succeeded here, along with Tatty Teddy, Bobble and Teddy Big Foot. People relate more to one character than hundreds of different designed products. Angeline could have her own fan club, and this could be the way for Ty to reach children. Angeline, particularly if set up as a profit centre, could allow Ty a fresh start. This could be an opportunity for Ty to prove that the company is much more than just Beanies. With her own website, and her own fans, Angeline could become the next craze. Her own range of products will allow Ty to aim at the three markets at once – children, gift and collectible, just like Depesche and Carte Blanche seem to have done so well. But how will Angeline fare against characters that have been around 10-15 years already? Ty is lucky. The success of Beanies, his hotels and his other ventures has given him the finance to develop Angeline. Whereas other gift companies may have had to work hard and build up from nothing, Ty has already got the revenue from his previous endeavours to skip the early stages of the product lifecycle. With Ty’s experience, Angeline will join the market at the same stage as the competition. While looking at Angeline’s different designs, packaging, mottos, etc. I see Ty is mimicking what Carte Blanche and others have found success doing. Angeline could well get mistaken for something from the makers of Tatty Teddy, it is that similar. Carte Blanche is missing fans in the USA, so Ty could be filling that gap in the market before Carte Blanche has the chance to.

Ty is clever: while the collectible market is less profitable, the company focuses on gifts. Ty is spreading the risk over different markets. The chance of profit is more likely as Ty is diversifying. Yes, originally the company was a toy and gift company, but we know from Ty’s messages on the Ty Cyberboard and Ask Ty that he is desperate to make his products appeal to collectors once again. Who knows how the market will respond the Ty’s changing strategies, and who knows how Ty will react to the market? One things for sure…it’s obvious Ty is aware of the problems, and it’s obvious that the company is doing it’s best to over come these problems. But will we ever see Ty’s popularity at the level that it once was?

Please note, this is just my own personal opinion of Ty Inc and their products - Hayley Mitchell July 2005