A six-foot-tall spud with a bushy ‘stache greets visitors to the Pawtucket, R.I. headquarters of the toy giant Hasbro.
But while Mr. Potato Head is a familiar face to kids of all generations — he was the first toy ever advertised on network TV in the 1950s, and then saw another surge of popularity with Pixar’s “Toy Story” trilogy — Hasbro is not resting on past successes.
In the decade since Hasbro Chairman and CEO Brian Goldner took charge, the company has begun to take a “digital-first” approach to everything it does — whether it is YouTube videos of people playing with its toys and showing off their collectibles, or online games, videos, and tie-ins to hot brands such as Marvel and Star Wars. That approach, informed by consumer insights data and customized “blueprints” that guide each of its brands, is helping the $5.21 billion company weather one of the most tumultuous retail landscapes in recent history. In 2017 — the same year that the pioneering big box chain Toys”R”Us filed for bankruptcy — Hasbro surpassed its west coast rival, Mattel, in total sales for the first time since 1993.
We spoke recently with Goldner about how Hasbro is navigating the changing retail landscape; initiatives like company-wide idea fairs and Quick Strike; managing Wall Street’s expectations; and why changing things as fast as the market needs you to change can often run counter to human nature.
InnoLead: Can you talk about why storytelling is so important to Hasbro’s strategy?
Brian Goldner: Throughout time, going back decades and certainly today, audiences and consumers connect to brands based on great stories and great characters. Those stories and characters build meaning into those brands beyond just the attributes of the brand. It enables those brands to connect with consumers in an emotional way … and when the audiences are connected to a brand in a compelling, emotional way, they want to travel with that brand across any number of stories and experiences and platforms, and to participate with the brand in the most immersive ways possible. You can see that in our brand and as well in the brands of other world-class storytellers. Whether it’s Transformers or My Little Pony, whether it’s Magic the Gathering or Dungeons & Dragons—these are all brands that are being offered to the consumer through character and story. Sometimes the story is being told through bespoke, episodic television series; sometimes it’s a movie; many times it’s through social media content, through streamed content, or fan-to-fan user generated content. And many times it’s all of those. It’s really the orchestration of the complete brand that we’re focused on.
IL: How do you develop the storyline for each brand?
Goldner: The mechanism that we use is what we call the brand blueprint, which puts the brand at the center of everything we do (informed by consumer insights and storytelling) and then we take those brands out into all the experiences that are most important and to an audience—whether that’s the toy and game experience and play, whether that’s digital gaming, or some other category or consumer products from a T-shirt to a backpack to tennis shoes or apparel or bedding or pajamas or whatever it might be that they really love as a result of loving characters. …Each brand leader of our company has this blueprint — let’s call it a playbook. And they get to decide what the specific recipe is. For example, people might enjoy barbecue, but barbecue is different in every region of the country. That’s like our brand. Every brand will emphasize different aspects of the playbook because the teams have done extensive work in understanding what our audience for each brand particularly enjoys and where do we get the best returns on the effort that we’re putting against that brand.
For My Little Pony, the experience is developed and the story is told through streamed content, through episodic television, now through animated motion pictures, and user-generated content, and then through traditional and new forms of advertising…even to new techniques we’re developing called Content to Commerce. (I’ll explain more fully later.) They’re sort of shop-able social bites, which is a new technique we’ve created based on the fact that Hasbro is a great storyteller. [So] the brand leader for Dungeons & Dragons, a role-playing game for teens and adults, certainly will execute the blueprint differently than the brand leader for My Little Pony that is focused on kids, fans, and families.
IL: How do you adjust the blueprints for different cultures around the world?
Goldner: A great example is the Nerf brand. For years, Nerf was a brand that was in the United States and it was relatively small, and we recognized there was a way to reinvent, reignite and reimagine that brand, and we began that process. And then even within our own company, teams around the world said, “That’s such an American play pattern.” [They felt] the idea of running around and playing dart tag and foam darts and the active athletic aspects of the brand would be lost on international consumers.
What we did is we set out to garner proprietary insights around the world, and what we came to understand was the universal truth of the Nerf brand, which is moms around the world always believe that there are certain high-action activities kids shouldn’t do around the house, because you’re going to knock over the lamp, you’re going to ruin the furniture or you’re just going to be in a mom’s view—a nuisance.
The kids yet want to play in those ways—and by kids I mean all the way up to young adults. They want to play, and so Nerf is the perfect solution. Effectively you might say, “Mom says you can’t, Nerf says you can.” And we become that agreed solution to that age-old insight, and the enterprising marketing team turns that concept into, “With Nerf, you can achieve the impossible.” Achieving the impossible is playing in a totally high-action way in a totally safe and acceptable environment.
That’s the process we go through with each and every brand. The net of that exercise is that Nerf began back in 2000 as a $20 million business. Today, Nerf is the largest brand in our company, valued at several hundred million dollars and is one of the fastest growing brands around the world. [According to NPD in 2017, Nerf posted its fifth consecutive year of growth and was the No. 1 toy and game property in the U.S. Nerf was also the No. 2 best-selling property in 2017 across the G10 markets.]
That comes directly from the activities of the blueprint. … It’s unique to Nerf to find those solutions in that way. You wouldn’t find that solution if you were trying to talk about Star Wars or My Little Pony, and that’s why the playbook is important as a guidepost, and the leader has the opportunity to construct it in a unique and specialized manner for each brand.
IL: So, tell me a little more about your “digital-first” approach, and how this will affect physical toys?
Goldner: When I say “digital-first,” clearly we’re making products that are analog and digital. Digital-first is more our approach to the marketplace, and a recognition of where consumers and audiences are spending their time.
What’s interesting about Nerf [is that] while we primarily sell tangible amusements, the fact is most of our fans and users of the brand are online presenting their experience with Nerf to their friends and family. … So we have a huge online community called Nerf Nation, and there are hundreds of thousands of videos available for people’s viewing pleasure. What we do is inspire that Nerf Nation — that fan-base, but we only produce only three percent of the content available in the universe. So, it’s a digital-first approach because we use some great influencers and teams of people who do stunt tricks and show our newest products in a really fun light, and then we turn it over to our fans and audiences to inspire them and hear back from them on how they see these products playing, what kinds of skits have they executed, what kinds of zombie wars have they run, whatever it might be. We’ve seen everything from a fully-scripted movie to a bunch of people having fun doing stunt tricks. Again, it inspires the audience and it becomes a virtuous circle — we sort of call it “play, watch, and share.”
Digital-first also means that there are ways to play Nerf and apps online. There are ways to play Transformers and My Little Pony in a mobile game. Beyblade, which is a competitive spinning top brand we have — there are also tens of millions of Beyblade online competitions, where people are playing with their tops in a virtual setting, not just in a real tabletop setting. We’re recognizing that young people today move fluidly from format to format. They want to do it in a frictionless way that’s seamless, and our job and responsibility is to give them the opportunity. [Some] people want to play against their friends on a phone, and then they want to play against their friends on the floor. So that’s what I mean when I say digital-first — our audience is digital natives, whether they be kids, teens, young adults, fans, or families, and therefore we have to reflect that our brands have to come to life on every screen and in every format of experience.
This is part one of our three-part interview with Hasbro Chairman and CEO Brian Goldner. This story is featured in our Fall 2018 magazine.