If you haven’t heard of Hatchimals, they stunned the toy industry (and traumatized the world of parents) by emerging as the ‘must-have’ toy of the season. And the secret to their success was in a new approach to digital strategy that’s within reach of every marketer.
If you’re a parent (like me), hearing the word “Hatchimals” should send PTSD shivers down your spine. It was only weeks ago that the holiday season sent many of us from store to store and site to site…and even from country to country (virtually at least)…on a mad dash to fulfill the pleading desires of our little ones for this season’s unparalleled viral sensation.
Flashbacks from the 1980’s included my own childhood ambitions for Cabbage Patch Dolls and, in the 1990’s, my niece’s and nephew’s obsessions with Beanie Babies, Furby, Tamagotchi and Tickle Me Elmo toys.
But Hatchimals outpaced Elmo sales by 300%; and the phenomena is distinctly different: born online, not through advertising but through strategically produced and distributed content. As a digital marketer, I was fascinated: how did this little creature seemingly arrive out of nowhere to worm its way into the hearts and minds of kids worldwide…and into the wallets of their parents? I was determined to investigate with the help of my strategy team, and reveal their secret sauce.
A SOCIAL-FIRST STRATEGIC APPROACH
The Traditional Linear Approach: Product Development to Marketing
Most consumer product companies have a linear process that hasn’t changed radically since the pre-internet economy. It begins with market research, which informs product design/development, proceeds to prototype testing, revisions approvals, and then on to manufacturing supported by marketing and sales. The day of a Product Launch is when Product Managers (PMs) and Product Marketing Managers (PMMs) begin watching the sell-through figures, and pray for success.
I’m oversimplifying, of course. There’s often complex financial analysis undertaken on distribution costs and ROI that’s undertaken along the way, seemingly limitless rounds of bureaucracy around compliance, writing and re-writing of technical specifications, negotiations and contractual battles with manufacturing, and endless legal approvals to endure. But the process has a beginning, middle and an end, after which the cycle begins again for the successful products (v2!), or for unsuccessful launch efforts, concludes with stress-filled re-booting, re-tooling and eventual cancellations.
The Non-Traditional, Social-First Approach
Hatchimals, on the other hand, took an inverted, social-first approach. Marketing wasn’t the last stop, it was the first. Spin Master, the company who makes Hatchimals, began marketing the line a year before the product was released. The product and the marketing strategy were lifted from one of the most popular types of videos on YouTube –”unboxing”– which videos feature users opening presents, Kinder eggs, and other package. (A simple YouTube search for the term “unboxing” reveals 54 million results.)
Spin Master essentially packaged an unboxing experience that your child could hatch in their very own bedroom. Starting a year before the official launch of Hatchimals in early October 2016, Spin Master built buzz on social media, created YouTube videos, articles, sneak-peak previews to the press…and began some modest advertising on children’s television channels.
Unboxing: A Strategy of Secrecy, Amplified by Scarcity
The key to this drawn-out marketing campaign was to build on the anticipation and mystery that makes “unboxing” so popular. While the company was advertising the product, it only showed the outside of the egg, not revealing what’s inside (“unboxing” Hatchimals) until the official product “hatch” in October. The “Hatch Day” was even promoted like a movie, with a promised reveal and a full court press on the press.
This secretive marketing strategy created hype and buzz around the product leading up to its launch just in time for holiday shopping, setting the product up to be the hit toy of the season. (They also employed scarcity marketing, which some argue is at the core of Spin Master’s business strategy.) The buzz generated around Hatchimals launched the toy to mega-hit status, despite the fact that it primarily has negative, 1-star reviews on Amazon.
Launch Strategy: “Hatch Day” is Here
“At 12:01 (a.m.) we sent out this amazing email that depicted the coming of this product. ‘Its arrival is finally here, it’s in the stores,’” Mastermind Toys’ Canadian CEO Jonathan Levy said. It was also heavily promoted through all social channels, through influencers and promoted posts. The company used its own feeds, influencers and retail channels towards an unprecedented take-over on YouTube, Facebook, Instagram and Twitter.
Social media has empowered brands to make it possible to scale a trend rapidly, and in a way that appears organic. However, “the “tribal mentality” of needing the ‘it’ thing predates Facebook,” said Armida Ascano, vice-president of insights at Trend Hunter, a Toronto company that tracks and promotes innovation. But now, “the child is on the schoolyard talking about what they want for Christmas with their friends. The parent is doing the same thing, except on social media. In both age groups, it’s wanting to belong and wanting to one-up, to ‘game-ify’ the process,” Ascano said.
“Because we have these social media channels, the arena has gotten smaller” and keeping score is more visible. “But it’s still a competition.”
Pioneering a Product Type: the First Mover Advantage
Another key element of Spin Master’s marketing success for Hatchimals is that the company has created a first-of-its-kind product, and the online buzz around Hatchimals has resulted in the brand becoming synonymous with the product — think Kleenex, QTips, etc.
“What this means is that even if a child sees a competitor’s product on TV and asks for it, the parent will likely search Hatchimals when they go online to search for it.” Eric Samson of Group8A writes in Business2Community, “This gives Hatchimals an advantage in online advertising, especially through Google search, and means that parents are far more likely to click on a Hatchimals ad over a competitor’s.”
“The tribal mentality of needing the ‘it’ thing predates Facebook…” but because of these social media channels, “the arena has gotten smaller” and keeping score is more visible.
— Armida Ascano, Vice-President of insights at Trend Hunter.
Influencers, Parenting, and Peer-Pressure
Seung Hwan (Mark) Lee, an associate professor at the Ted Rogers School of Retail Management at Ryerson University, studies consumer behaviour. “Several forces work together to create the fuss,” Lee said. “First, the toy is scarce, either in fact or in parents’ imaginations. Some retailers might withhold stock to create scarcity and demand. Photos of empty shelves start appearing. Parents and kids experience FOMO, or fear of missing out. Then social comparison creeps in, especially when it seems like everyone on Facebook is talking about the thing. And then there’s a strong desire to belong to the “in crowd” of those lucky or savvy enough to find one.
“It’s human nature to compare ourselves to other people,” Lee said. He believes in the power of the influencer, the parent with a big social media following or who otherwise seems “in the know.”
“If these strong, central moms are getting a product like the Hatchimal, other moms believe it’s the thing to get,” he said.
Strategic, Creative Content Strategy
Branded Content Seeds the Viral Jar, UGC Spreads the Trend
Many brands and marketers try to inspire consumers to create content for them free of charge, but it’s a difficult tactic to scale without the proper product, and the right strategy. Spin Master took a strategic approach, enlisting a massive number of mid-tier parenting and mom influencers –each with their own above-average following– versus putting all their eggs in one basket (yes, some dad humor!) with a major celebrity endorsement.
Most brands fund a single “product launch” video or commercial spot and spend the majority of their budget on paid media. Spin Master, by comparison, began by producing 19 brand-produced content-driven videos, each with their own purpose. Our analysis revealed that the top performing videos were produced in a series, each improving upon the prior one through analytics and a test-and-scale methodology, made famous by BuzzFeed’s Tasty videos.
Only 19 of the 115,000 Hatchimals videos on YouTube are published by the brand — but they were strategically designed to drive consumers from awareness through engagement to purchase, and to motivate UGC –as YouTubers love feeling ‘part’ of the online community and, through it, the culture.”
Serialized Videos at the Center of the Content Approach
They also used a portfolio approach to content, incorporating a mix of short form videos (emotional close-ups of kids “revealing” their Hatchimals) along with a long format instructional video (providing listicle-style instruction on the features, function and life cycle of the toy). Importantly, Spin Master released the videos in a sequential series.
1. “Hatchimals — Something Magical is Happening”
The first in the series, #3 in performance, is a 30-second video showing a diverse set of cute kids from around the world playing with their Hatchimals during the first stage of the toy’s life cycle, pre-hatch. The video conveys the magic, curiosity, and anticipation of waiting for the creature to hatch.
2. “Hatchimals — The Magic of Hatchimals”
Second, #2 in performance is 40 seconds. It shows the same kids from the first video but now a Hatchimal hatching, and also features a montage of seemingly-unstaged video clips of kids playing with their Hatchimals.
3. “How To Play with your Hatchimal”
Third, and #1 in performance, is the long form piece, over 9 minutes long. This video gives detailed instructions and guidelines for all the features of Hatchimal and how best to play with it, including taking the user step-by-step through the different stages of the toy’s life cycle. For convenience, it includes Table of Contents annotated bar that allows the viewer to skip to the section of the video they wish to view.
The UGC trend took off from there, and the large majority of the top performing content around Hatchimals is user-generated, whether blogs or YouTube videos…but it would never have been possible to motivate that UGC wave without the strategic release of brand-produced videos. Our research shows that only 19 of the 115,000 Hatchimals videos on YouTube are published by the brand — but they were strategically designed to drive consumers from awareness through engagement to purchase, and to motivate UGC (as YouTubers love feeling ‘part’ of the online community and, through it, the culture.”)
Non-Video Content as Customer Support, and Crisis Management
A BuzzSumo search for “hatchimals” shows that the top performing, most-shared content related to the product (aside from the couple YouTube videos) is articles discussing how and where to buy the product, clearly targeting parents. Top influencers related to Hatchimals on BuzzSumo include Spin Master and Hatchimal brands, as well as a number of mid-tail mom bloggers, writing on parenting.
But aside from frequent updates on where to buy your Hatchimal, how did Spin Master manage the Hatchimals’ limited supply, and prevent a negative backlash? They created a “North Pole Adventures” section launched on Hatchimals.com as an online resource for parents and children alike as they await the arrival of their Hatchimal. Here, consumers can prepare for the arrival of their special creatures from the nursery to their homes. The site features fun games, a build-your-own-nest activity, and a printable banner to welcome Hatchimals home.
In the event that the Hatchimal is arriving after the holidays, parents can download a letter from Santa letting their children know he is still searching for their special Hatchimal, which will be delivered soon. Every facet of the marketing was focused on the customer’s experience, the play patterns, and nurturing the emotional touch points (especially anticipation, and surprise) that inspire connection through sharing.
Strategic Summary: What Marketers Can Steal from Hatchimals Story
So what can marketers learn from Spin Master’s approach? In summary, I think there are 5 relevant take-aways:
1. Social-First Approach. While social channels are often viewed as content distribution vehicles, marketers can break from traditional linear approaches and use social channels to analyze audience behavior.
2. Product as Experience. From there, creating a blockbuster hit like Hatchimals requires product designers to use the data they’ve gleaned, and leverage behavioral trends. Marketers should partner closely with product designers, as both are tasked with creating an emotional connection — a unique, moving experience.
3. Video-Based Content Marketing… that tells a story as a series released over time. Using a secretive strategy across multiple platforms, and publishing a series of well-timed videos (at the center of their content approach), Spin Masters ignited curiosity and anticipation — and flooded parents’ social media feeds with mysterious “unboxing” videos. It was traditional buzz-building, but amplified by the visual content and year-long build up to the release.
4. Using FOMO and Scarcity. Paired with the limited release, they played perfectly into human desires to be included, a feeling that led to a massive surge of evangelism through user-generated video content.
5. Managing Potential Crisis with a Positive Emotional Experience. When creating such a high level of demand and using scarcity as a tactic, marketers must be ready to keep consumers engaged while they wait for product stock to replenish. Spin Masters did this skillfully with their digital portal, building interactive games, home-building DIY activities (preparing kids’ bedrooms for the eventual Hatchimal arrival), and even crafted letters from Santa for parents to use as communication!
As marketers fully embrace the multi-platform approach, instead of viewing the “target” as anonymous demos of consumer segments, we now have the opportunity to involve consumers in the production process, and interact with them genuinely and directly to build community, and form lasting customer relationships.
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