If there's a teeny-tiny remote-controlled race car under the tree a few days from now, you're at the tail end of a long chain of events that turned this toy from hot to white hot in just a matter of months.
How popular are the little remote-controlled cars, sold under various brand names? Well, RadioShack recently limited purchases to two per customer. KB Toys had only three left at its Pentagon City store earlier this week. And the Discovery Channel Store ran out of them even before Thanksgiving and rush-ordered more from various factories in Asia. Guess what: Discovery's about to sell out again.
"Our plan was that this would be the big toy for next year," said Ken Cutler, senior vice president of Illinois-based Hobbico Inc., which distributes one brand of the cars. "But this phenomenal craze kind of happened real fast."
And like so much else in the Internet age, it also happened globally and with an assist from e-mail. Like just about everything in the toy world, mini-racers are a source of claims and counterclaims by rival companies. But if one toy manufacturer gets its way, the frenzy may subside as quickly as it began.
They're called ZipZaps, Z-Car, MicroSizers, Micro Blast Racers, I-Racer -- or more generically, remote-controlled mini-cars. Most of them are made in China, and they cost $10 to $50.
The story begins more than two years ago in Japan, where innovative toymaker Tomy Co. produced a speedy remote-controlled car the size of a matchbox with a motor smaller than the end of a pinkie. Tomy called it the BitChar-g (pronounced bit-char-GEE). The car's claim to fame, besides its size: It recharged in 45 seconds, instead of the hours it took most earlier remote-controlled cars to recharge for only a few minutes of play time.
Soon the two-inch-long cars were being raced on makeshift obstacle courses at Japanese bars and atop desks in Tokyo's executive suites. They quickly became a pan-Asian phenomenon, with uniformed schoolchildren competing on playgrounds.
The buzz was too much for U.S. toy companies and distributors to resist. Mini-cars began arriving at mass retailers and hobby shops in this country as early as this past spring. RadioShack had its ZipZaps, KB its MicroSizers -- and many knockoff artists in Asia tried to catch the wave, creating an explosion: minis, minis everywhere.
Including in just about every American's You've Got Mail box.
And that's when something interesting happened. There's some argument about this, but the daily barrage of e-mail ads -- two, three, eight a day to the same recipient -- seems to have pumped up awareness of the cars. That's right: Rather than siphon sales from the shopping malls, all that spam seems to have driven consumers to the stores looking for "that cute little car I saw online."
This symbiosis doesn't surprise some retailers.
"It goes without saying that we are benefiting from some of the guerrilla marketing that's going on," said Pam Rucker, a spokeswoman for the Discovery Channel Store.
Nor is it news to mass e-mailers, the electronic equivalent of telemarketers, without the dinnertime interruption.
"Retailers get a free ride from guys like us," said John Nesbit, vice president of Chicago area Internet marketing firm Penn Media, whose business now includes buying the knockoff mini-cars from a Hong Kong factory and selling them on the Internet. Penn Media sends millions of mini-car e-mails a day. "We go out and promote the living daylights out of something and the retailers get some of that benefit."
To extend its reach further, Penn Media pays 25 contractors to send the ads to millions of e-mail addresses they have purchased from various Web sites.
One of those contractors, Steve Harper, said he has sent 5 million e-mails so far. Earlier this month, he claims he sold 330,000 cars after sending a million ads in one day.
Harper keeps a close eye on the numbers because he gets a cut from each sale his e-mail blitz initiates.
"That's a fairly good response rate because not everybody is going to open your e-mail, let alone purchase from it," said Harper, who works out of Dover, Del. (It's certainly doing better than the singing toilet paper he promoted recently.)
People who make their living this way relish receiving e-mail ads. That's how they spot big sellers, said Patrick Finn, executive vice president of marketing at Hi-Speed Media Inc., an e-mail marketing firm in Sherman Oaks, Calif.
"If you see a product more than a couple of times on e-mail, that means that product is selling," Finn said. "No one would be sending it repeatedly if was not selling."
Jaffer Ali, Penn Media's chief executive, feels his marketing effort has done more for mini-cars than a RadioShack campaign featuring Shaquille O'Neal, playing with the ZipZaps in some ads and in life-size cutouts in stores. Ali estimates that for every e-mail Penn Media sends out, his firm wins one sale and retail stores win 20. By the end of the holidays Ali expects to have sold about 150,000 mini-cars at $20 a pop. He expects retail stores to have sold at least 3 million.
The effect is similar to the one created by television infomercials, Ali said.
Sears, Roebuck and Co., for example, has been using 800-number infomercials since 1994 to sell products exclusive to the chain, a Sears spokeswoman said. While plenty of customers dial up, the TV commercials drive very strong traffic to the stores.
A New Phenomenon?
Marketing quirks are common in the retail world, said M. Eric Johnson, a professor at Dartmouth College and the author of "Learning From Toys: Lessons in Managing Supply Chain Risks."
For instance, when Office Depot hands out fliers promoting its discounts, Staples reaps some benefit. Apparently consumers get confused, go to the wrong office-supply chain and end up spending money, Johnson said, recounting his chat with one Staples executive. But Johnson is skeptical of the link between the popularity of the mini-cars in retail stores and the e-mail marketing blitz. No scientific studies exist on this relatively new phenomenon in the toy business, he said.
And even if the retailers' gut instincts tells them the e-mail campaign works in their favor, he's almost sure most manufacturers disagree. The toymakers go to great lengths to deter ripoffs of their products, often taking out ads in industry trade journals to publicly shame copycats.
"The toy business is rife with knockoffs," Johnson said. "It creates a lot of paranoia in the business."
There's reason for the paranoia, says Jennifer Maurus, vice president of sales at Atomic toys, which makes and distributes Z-Cars, sold at the Discovery Channel Store, Zany Brainy and other outlets.
Housewives, retirees, even a man eager to start a business for his 15-year-old son approached Maurus about selling the Z-Car.
"This item brought everyone out of the woodwork," Maurus said. "We had calls from all kinds of people looking for a way to sell it."
The San Diego firm was wary of offers from flea markets and businesses selling on eBay. Selling Z-Cars to those folks "would give the impression that it's a secondhand or closeout product," Maurus said.
So Atomic Toys deals only with mainstream retailers and a few mall-based kiosks -- not that its decision really matters, Maurus said. With the proliferation of knockoffs, it's easy to lose control of the product.
A year and a half ago, Atomic Toys went to China to look into developing its own line of mini-cars. It found a technology and a Chinese contractor to make the cars. In April, it began shipping Z-Cars. By summer, cheaper imitations flourished.
Making a knockoff is easy enough. A factory can buy a Z-Car, create a mold from the original, and a knockoff is born.
The practice is not necessarily illegal. For instance, factories can copy an original but change its remote-control mechanism, dodging some legal headaches.
In most cases, Maurus has no choice but to sit back and watch. On occasion, she'll even get a random call from a hapless salesman trying to get her company to sell, what else, a remote-controlled mini-car a lot like the Z-Car.
Even she concedes that the e-mails may be helping mini-car sales overall.
"The exposure has probably helped everybody," Maurus said. "It gets more attention for this product out in the marketplace. A lot of people don't remember the name of the brand, they just remember the item."
Patents in the Pipeline
Helping or not, Tomy doesn't want to be fighting these battles.
Around the time the company introduced the BitChar-g, it applied for various patents to protect its creation. More than two years later, the paperwork is still in the pipeline. Tomy continues to make the cars, and sold the BitChar-g's licensing rights to Hobbico, a toy distributor in Champaign, Ill.
Hobbico changed the brand name to MicroSizer. MicroSizers, about $35, are now sold at Toys R Us, Target, KB Toys and various other outlets.
Meantime, Hobbico is keeping a watchful eye on the patent process, awaiting approval from the U.S. Patent Office, said Cutler, the company's senior vice president.
If those patents get the nod, as Hobbico expects they will any time now, "the number of brands out there could fall from a dozen or so to about three or four," Cutler said.
Come January, the folks at Hobbico and Tomy plan to circulate toy publications to put copycats on alert. The message: Both companies will protect MicroSizer patents.
Once it gets its patents.