Pillow Pets: Staying Ahead of the Curve

by Rick Petry on Apr 14, 2017 8:54:00 AM Dish, Product Development

DishGraphicGreen-470x214.pngEn lieu of this week's Friday Forecast, we offer readers Rick Petry's latest DISH column, entitled "Pillow Pets: Staying Ahead of the Curve." 

Every marketer knows that products have a natural lifespan, perhaps best exemplified by the classic product adoption life cycle that resembles a bell curve (Figure 1). In the simplest terms, this curve breaks consumers into groups within the overall pool of buyers for a given product.

So, for example, Innovators (also known as Pioneers) are the first to embrace any new product and represent the most finite group, at 2.5 percent of buyers. They are followed by Early Adopters, who represent the next 13.5 percent of purchasers. As sales increase, the curve rises to embrace Early Majority consumers (the next 34 percent), at which point sales reach their pinnacle. As sales begin to decline, the late majority (another 34 percent) buy the product, followed by the last-to-the-party buyers, or Laggards (the final 16 percent).

How long this cycle lasts depends upon a multitude of factors, including the uniqueness and innovation of a product, how broad its appeal is, and the degree to which it encounters competition. In the 1980s and 1990s, individual “As Seen On TV” products would experience a cycle ranging from six months to two years, and a window of direct-to-consumer exclusivity would precede retail distribution. Once the product’s life cycle ended, the product would die out, go away, or end up in the bargain bin, only to be replaced by the next big DRTV hit.

As the industry matured and acquiring a customer became far more complicated, however, the product franchise, as opposed to one-off products, has evolved as a more reliable way to build a business by leveraging both product familiarity and brand goodwill.

For an example of how this has been done effectively, one needs to look no further than Pillow Pets. Cultivated over the course of a decade at county fairs and trade shows, the children’s plush toy that announced, “It’s a pillow! It’s a pet! It’s a Pillow Pet!” emerged in 2009 as a direct response juggernaut with reported annual sales peaking at more than $30 million in 2010–2011. And while some might think that the product’s lifespan may have run its natural course, the reality is that babies continue to be born and grow up to enter the primary demographic for Pillow Pets, kids aged 3 to 14.

The brainchild of CJ Products, Inc. CEO Jennifer Telfer, Pillow Pets began as rather generic-looking ladybugs, puppies, and unicorns, but now include a plethora of other product innovations and licensing deals that riffs off of the ever-changing pop-culture zeitgeist and taps into consumers’ desire for something new. So in addition to the original product iteration, which unfolds from a stuffed animal into a pillow, there are oversized Pillow Pets, Pillow Pets that light up, Pillow Pets that glow, and even Pillow Pets that are scented. In addition, licensing deals have been struck with the likes of Disney, Nickelodeon, the NHL, and the NCAA, to name a few.

Returning to the notion of the product adoption life cycle, each of these varieties—whether linked to Finding Dory or the Oregon Ducks—has a natural adoption cycle itself. So instead of having a single bell curve, there are a multitude of curves that overlap to create a robust and diversified product mix. However, this kind of cornucopia approach is not without its challenges.

Product marketers like Pillow Pets have to do a fair amount of crystal ball-gazing in order to predict what will be a hit—and to what extent. “From order to manufacturing to on-hand inventory requires about 60 days,” Telfer explains. “With a property familiar to the public such as the Finding Nemo sequel, we had a high degree of confidence that there would be enormous demand, but prior to its release, who might have predicted the unprecedented success of Frozen?” (The latter has grossed nearly $1.3 billion in worldwide box office, and is now the most successful animated feature in the history of cinema.)

(Left) Olaf, the popular character from Disney’s Frozen, is a Pillow Pets favorite.

A commitment to continuous innovation, however, does not always provide such healthy rewards. The elasticity of each brand—that is, the degree to which it can produce line extensions—is individual and relies on a commitment to trial-and-error that will inevitably lead to laying the proverbial rotten egg. In the case of Pillow Pets, for example, the company once launched a line of complementary toothbrushes. It makes sense, right? The child is getting ready for bed with his or her Pillow Pet clutched in one hand and a corresponding Pillow Pets-branded toothbrush in the other.

Except in this case, it didn’t work. “What we learned,” Telfer says, “is that sometimes you are better off sticking to what you do really well—in our case, that is unique and innovative plush—and not stray too far afield.”

CJ Products CEO Jennifer Telfer

(Right) CJ Products CEO Jennifer Telfer.

Colleen Ferrier, a direct marketing expert and consultant who has worked with Pillow Pets extensively over the years, adds, “One of the great things about the company is that they have a culture willing to take risks and learn both from successes and the occasional failure. It’s this kind of dogmatic determination, exemplified by Jennifer’s tireless passion, that has helped nurture the brand to such great success, and [it] is one of the key reasons why that success is enduring.”

Given the complexity of the product mix and the corresponding economics, being able to learn from the past in order to forecast and manage inventory for the future is also critical. “Each of the properties we are leveraging has a period where their star shines brightest, and it’s incumbent upon us to make sure that we can maximize each of those opportunities,” Telfer explains. “It’s our job to make sure that our consumer is happy and satisfied and gets what they want, so that, in turn, our retail partners enjoy the best possible outcomes, no matter the season or SKU.”

“By constantly remaining fresh and relevant, Pillow Pets has become a product staple and category leader capable of beating back the competition,” Ferrier adds. “They have accomplished this through an unerring commitment to continuously surprise and delight their consumers, who have rewarded the brand with their ongoing loyalty.”

What’s the best way to avoid a marketplace curveball? If you’re Pillow Pets—or any marketer wanting to build a brand out of a DR success—it’s to make sure that you’re throwing enough curves at the marketplace yourself.

Reprinted from ER Magazine with permission.

About the Author

Rick Petry.jpg

Rick Petry is a freelance writer who specializes in direct marketing and is a past chairman of ERA. He can be reached at at www.rickpetry.com and @thepetrydish on Twitter.

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