Toying with public trust

Toy%20Industry%20120The global product recall crisis that has left the toy industry reeling shows no sign of abating following Sainsbury’s decision to recall thousands of toys from its stores at the weekend over fears of lead contamination. The move comes just weeks after Mattel came under fire for distributing almost 21 million potentially harmful products.

But it is not just the toy industry’s reputation that has been damaged by the events of the past six weeks. Mattel took the unprecedented step of apologising to China last week after admitting it recalled some Chinese-made products unnecessarily. Mattel executive vice-president of worldwide operations Thomas Debrowski admitted that the company’s reputation – as well as that of China as a country – had been tarnished by the recalls at a meeting with China’s quality watchdog chief Li Changjiang last week.

The toy giant underestimated consumer reaction in the UK by insisting that an ad campaign to reassure parents of the quality of its merchandise was “unnecessary” despite running one in the US. However, it performed a swift U-turn soon after by running a press campaign in the UK featuring the strapline “We take our promises seriously

Safety summit
Today (Wednesday), the British Toy and Hobby Association is hosting a “Toy Safety Summit” to discuss quality control processes in a bid to prevent a recurrence of the crisis.

Mattel UK general manager Jean-Christophe Pean – who is being replaced by the company’s former marketing director David Allmark in October – defends the company, saying it has earned consumer trust with “more than 75 years of high standards and by investing in doing the right thing in an open and honest way”. He adds: “We’ve had very positive feedback from consumers.”

Yet others argue that Mattel’s standards have dropped. Earlier this month, in a letter to a US congressional subcommittee, the toy giant revealed that some of the recalled toys contained levels of lead that were 180 times more than the legal limit, while others had loose-fitting magnets. The recall prompted EU consumer commissioner Meglena Kuneva to launch a two-month review of existing product checks and warn that tougher safety measures will follow.

It is not only consumers and public bodies that are concerned about the recall. The Walt Disney Company recently introduced its own toy testing system after Mattel recalled 436,000 toy cars based on Disney film character Sarge. The tests, which will focus on 2,000 toymakers and 65,000 products each year, is an unusual move because licensors such as Disney traditionally allow manufacturers to manage quality control.

Long-term damage
Disney’s mounting concern is further demonstrated by company chairman Andy Mooney, who says the plans are designed to “send the message that we are looking over their shoulders”. It seems that Mooney, who worked for Nike as vice-president of footwear during its voluntary recall of thousands of faulty tracksuits and water bottles in 1998, has recognised the long-term damage product recalls can do to a brand.

Industry insiders say the “Made in China” label could prove detrimental to toy sales in the future as a result of the recall. Toy retailer Hamleys has confirmed it is investigating the possibility of sourcing more toys from Europe rather than China. A spokeswoman says: “Toys made in the UK and Europe do have an appeal to our customers.” Meanwhile, toy manufacturers such as Denmark’s Lego and Germany’s Playmobil, whose production plants are based largely in Europe, could also benefit.

Lego general manager for the UK and Ireland Marko Ilincic says consumer confidence in the toy industry has been dented by the recall crisis and adds that customers are now paying more attention to where toys are produced. “In the long term I have no doubt this heightened awareness will erode but perhaps not totally diminish,” he says. “Lego made a conscious choice less than three years ago to base our production in Europe. While it is more expensive to produce here than in China, we feel that the quality is higher.”

US baby furniture supplier Simplicity recalled 1 million Chinese-made cots this week following the deaths of two children. Trading Standards Institute chairman Bryan Lewin believes consumers cannot help but notice the product recall is related to items made in China. “It is possible that people will think it is not safe to buy toys purely because they are made in China,” he says.

Mattel’s magnet toys were recalled as a result of a faulty design commissioned by the company itself so in that case the source of production was irrelevant. Nonetheless, the Toy Retailers Association says it has been approached by a number of start-up businesses looking to set up as toy retailers selling toys sourced only from Europe.

A retail industry insider says there was an “initial intake of breath” from toy retailers following the first product recalls but he believes there is little evidence of a long-term backlash from consumers. “The majority of retailers do not have the option of switching manufacturers because they buy through primary supply chains from main brands,” says the source.

Buoyant industry
With the exception of the most affected brands and companies, the industry is still buoyant. Lego head of communications Charlotte Simonsen says it is important consumers believe in the quality of all toy products and the company is hoping the product recall will not have a negative effect on the industry in the long term.

However, some consumers are understandably disillusioned with Mattel. Henry Elliss, head of social media at search conversion agency Tamar, says Mattel has been heavily criticised on blogs and social networking sites. He adds: “Mattel lacks its own consumer-facing presence within these forums to combat the bad press it is receiving.

By creating its own blog or social network group, Mattel could have put its point across to consumers and even given them a forum to air their grievances instead of letting the bad press have free rein across social media.”

A YouGov survey also revealed that 26.4% of its sample of consumers had heard something negative in the press about Mattel in recent months and 37.1% would now be less likely to purchase toys made in China.

However, Mattel’s attempts to reassure consumers have the support of the British Toy and Hobby Association, which launched an online safety guide earlier this month to provide a “much needed” portal of information for consumers.

Chairman of the Toy Retailers’ Association Gary Grant warns that the recent problems could lead to toy shortages in the UK in the run-up to Christmas. But the industry is hoping that a productive BTHA summit will mark the beginning of the end of a crisis that has at times threatened to spiral out of control.

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