“Do you have a brother?” – asked the HELLO Barbie doll as I sat next to my cousin’s 5-year old daughter who was playing with her toys. Shocked to see this interactive version of Barbie, I couldn’t help but reflect on how toys have changed over time.
Mattel, a billion-dollar US toy manufacturing company, over the past several years, has invested heavily in machine learning to enhance their product development. In an era powered by digital innovation, Mattel has faced significant financial challenges with four consecutive years of revenue decline1. Developing innovative products that resonate with the digitally-forward parents of today’s generation is Mattel’s strategy to stay relevant in the future.
Interactive Products that use Machine Learning
In the short-term, Mattel has developed products which use artificial intelligence to simulate a live-conversation between kids and toys. For example, HELLO Barbie doll, launched in 2015 uses sophisticated algorithms and machine learning to have a 1-on-1 conversation with children as they play with the doll. The doll is programmed with 8,000 possible dialogues that can be used during the interaction with the child based on things the child says to the doll2. The doll remembers responses so that it can customize the interaction with the child through machine learning.
In the medium-term, Mattel is focusing on fueling digitization of products all the way from the top. In February 2017, Mattel hired Margo Georgiardis, an ex-Google executive to be its CEO, showing its commitment to digital innovation. While Georgiardis has recently been replaced by Ynon Kreiz3, who also has deep expertise in digital, Mattel continues to focus on gathering data to drive long-term future innovation. For example, HELLO Barbie collects and records data that the child says to the doll4. This data can then be used along with powerful artificial-intelligence capabilities to figure out preferences of children.
Caution for future product development
While Mattel has created this next-generation of toys, in the short-term they need to deeply understand how their products affect children’s behaviors and development. Particularly, it is critical to ensure biases are removed from their products so that children are not negatively influenced to believe a certain thing or pursue a certain career. For instance, Mattel created a book titled “Barbie: I Can Be An Engineer” to promote more girls to pursue STEM careers5. However, the storyline with Barbie relying on boys’ help for the more technical skills made the book an unpopular choice for parents to buy for their daughters. Similarly, with HELLO Barbie, I’m sure there are several instances where a conversation with the child might influence them negatively – whether its about notions of life, health, happiness etc. Even with the most-sophisticated machine learning algorithms, it is difficult to ensure neutrality on topics that might impact a child’s personal growth and development.
In the long-run, Mattel also needs to truly understand consumer’s needs and not invest capital in products that might be crossing ethical lines. In 2017, Mattel called off production of their newest product Aristotle, a baby monitor that used machine learning to respond to a baby and act as a virtual nanny6. The product was designed with latest technology partnering with Microsoft Cognitive Services and Bing Search Engine, such that it could do things such as turning on lights, changing color of lights or singing a lullaby based on the child’s voice. But since this data on children’s moods and behaviors was being tracked by Mattel centrally and could be shared with other organizations, it ran into privacy and data security issues and ultimately Mattel was persuaded by media backlash and consumer advocacy groups to call off the release of the product. Such instances prove that it is not sufficient to just invest in technology itself without fully comprehending how consumers will react to the product. Along with innovative technology, Mattel must conduct deep thorough research on parent’s and children’s preferences, reactions to new product ideas and partner with psychologists who can help determine impact of products on children’s behaviors. For example, there might be certain products that require less top-notch technology, but are liked more by consumers. As I remember my own experience of playing with toys, there are certain traditional aspects of toys that are still relevant and could provide joy to kids – such as the ability to do simple things with them like throwing a ball through the hoop without having to worry about internet connectivity, sync issues etc. Small changes in these products rather than quantum leaps in innovation could potentially make them very viable for the market.
Analyzing Mattel’s past product development and plans for future products, I can’t help but wonder, will digital technology and deep consumer research be sufficient to revive the company? Overall, what other levers can the toy industry pull to achieve sustained long-term financial results? (800 words)
1. Carol, M. (2018). The Long, Slow Decline of American Girl and Yoda. Bloomberg.com. https://www.bloomberg.com/news/articles/2018-03-29/the-long-slow-demise-of-my-little-pony-and-yoda Accessed 13 Nov. 2018.
2. Vlahos, James. “Barbie Wants To Get To Know Your Child”. Nytimes.Com, 2015, https://www.nytimes.com/2015/09/20/magazine/barbie-wants-to-get-to-know-your-child.html. Accessed 10 Nov 2018.
3. Whitten, Sarah. “Mattel’s CEO Georgiadis Heads To Ancestry. Toymaker Taps Ynon Kreiz To Replace Her”. CNBC, 2018, https://www.cnbc.com/2018/04/19/mattel-ceo-margo-georgiadis-reportedly-in-talks-to-leave-the-company.html. Accessed 10 Nov 2018.
4. Marr, Bernard. “Barbie Wants To Chat With Your Child — But Is Big Data Listening In?”. Forbes, 2015, http://www.forbes.com/sites/bernardmarr/2015/12/17/barbie-wants-to-chat-with-your-child-but-is-big-data-listening-in/#2f8661c2ec08. Accessed 10 Nov 2018.
5. Polgar, David Ryan. “How Mattel Continues To Move Barbie Into The Future – Dell Technologies”. Dell Technologies, 2018, https://www.delltechnologies.com/en-us/perspectives/how-mattel-continues-to-move-barbie-into-the-future/. Accessed 10 Nov 2018.
6. Schoonmaker, S. (2018). Free Software, the Internet, and Global Communities of Resistance: Hacking the Global. Routledge.