Toy Recalls Have Toy Industry in Crisis as Consumer Confidence is Shaken

In recent months, Mattel, Fisher-Price, RC2 and other toy companies have recalled millions of toys for reasons ranging from lead exposure to choking and suffocation hazards. But perhaps the most shocking recall was that of Aqua Dots. Canada's distributor, Spin Master, recalled Aqua Dots because of a so-called date rape-like substance on the little beads that made them stick together when moistened. The coating on the beads was said to turn toxic if swallowed.

So, what do all these recalls mean for the toy manufactures, distributors and retailers?

In a Nov. 25 press release, crisis PR expert Brian Dobson says that incidents of toy recalls are nothing new, and on occasion defective or hazardous products do get past the quality controls. But the recalls of the past few months have gotten the attention of the media and consumers in a big way. With well-known brand names in trouble, major retailers like Wal-Mart, Target and Toys R Us are taking the initiative to do what they can to protect their customers and their market shares by doing some toy testing of their own. Dobson says children's entertainment property owners such as Disney and Nickelodeon have also started testing to protect their brand names and avoid public association with quality problems.

But many retailers are not prepared for such a crisis as this, claims Dobson. "Shoppers want answers about problem products, especially when quality control deteriorates on items directed at the most innocent consumers, children," he said. That being the case, "manufacturers, marketers and trade associations should make sure that store operators are kept in the communications loop and ready to respond factually to shoppers with questions about products during a crisis. Product recalls and lax quality control that put the toy industry in crisis have shaken consumer confidence. Businesses have to communicate openly and honestly with the public and do the right thing quickly and effectively to limit damage and control a crisis."

Consumers believe the toy marketer of a defective or dangerous toy is responsible from the get-go for the toys they sell, says Dobson. Not only are parents and toy shoppers calling for action, but toy companies are facing legislative hearings, stricter regulatory oversight, competitive pressures and falling stock prices.

Initially, Mattel blamed poor quality control in China as the reason for its need to recall toys. Later, however, Mattel recanted, apologized to China and took responsibility for their defective or hazardous products.

According to online article "Made in the USA Toys," writer Julie L. Jones says some companies may be thinking more about manufacturing their toys in the U.S., despite being able to save 50 percent or more in manufacturing costs with foreign-made toys. Quality control is a big consideration. According to Jones, Patricia Littwin is the CEO of Tfalf Corp., which manufacturers the Yackle Ball. Littwin said she "had a sample sent to me of what China could do, and it fell apart in less than 20 minutes." But when the company did a two-day test of 60 USA-made Yackle Balls with more than a thousand middle schoolers, the company "did not lose one."

According to Dobson, if companies prepare for a crisis before it happens, they are better able to manage if it hits. "Retailers are on the front line with consumers who view them as responsible for the products they sell. Crisis preparation could have anticipated these developments."

Sources:

Press release, "Toy Recalls Reveal System Flaws, Says Crisis PR Expert in CBA Retailers+Resources Magazine;" http://www.prweb.com/releases/2007/11/prweb571474.htm

Article, "Made in the USA Toys;" http://www.toydirectory.com/monthly/article.asp?id=2587