When Jay Foreman, CEO of toy company Basic Fun, wants to market a hot new product, he usually sends it to 50 to 150 influencers for promotion. But this holiday season, Basic Fun's new Tiny TV Classics line of collectibles will go out to just 20.
At a time when the global supply chain is getting squeezed and delaying merchandise, Foreman simply can't spare the inventory. He also doesn't want to advertise what he might not have. The collectibles are miniature plastic TVs loaded with clips from popular TV shows.
"We're holding the rest — I don't want to get the influencers going and the merchandise is not in store yet," says Foreman, whose Boca Raton, Fla.-based company is behind other popular toys such as K'Nex, Lite-Brite, Care Bears, Lincoln Logs and Cutetitos. "The consumer views that [influencer] unboxing and they're like, 'Cool, let's buy it now,' and if it's not there, they're not going to look at that unboxing video again."
Basic Fun, which purchased the K'Nex brand in 2018, is one of a host of companies struggling with COVID-related supply issues, shipping cost increases and labor shortages. The problems — which one expert describes as having been snowballing since COVID-19 first struck in early 2020 — are creating a perfect storm ahead of the 2021 holiday season, affecting brands in a range of industries, including automakers, skincare companies, bag purveyors, home goods sellers and more.
The supply crunch is complicating advertising plans. Some brands are slashing their ad budgets as a way of mitigating increased shipping prices while others are relying more on digital marketing than TV so they can be more flexible as inventory arrives from overseas. Many are also adjusting marketing calendars — running holiday-related website refreshes earlier than ever to beat out the competition and encourage spending on what they do have in stock.
"If you were shipping $30 million of a line and you're now shipping $25 million, you adjust [advertising]," says Jim Silver, CEO and editor in chief at TTPM, a toy and pet product-focused publication. "Budgets are going to be cut accordingly to amounts being shipped, but not eliminated."