Google Alum Brings Digital Vision To Mattel

Margaret Georgiadis, a former Google executive, joined Mattel in February as its new CEO. Mattel is one of the world’s largest toy companies and the executive leadership change comes at a time of substantive growth for the global toys industry.

Georgiadis: Powering up Mattel’s digital fortunes

In 2015, global toy sales grew 4% year-on-year to $87.4 billion, according to the 2016 NPD/ICTI Global Toy Market Report. The global toy market was tipped to exceed $90 billion in sales in 2016—a record for the industry. However, in January this year, Mattel stock fell 17% after quarterly earnings fell short of analysts’ expectations.

Mattel, is a market leader in toy manufacturing, but it has had to revise its strong classical brands to account for the rising diversity of its customer base and growing interest in new creative technologies.

Recent developments include the introduction of the first-ever boy doll to the American Girl collection; a “Hello Barbie Hologram, a new artificial intelligence-powered version”; and Fisher-Price Rainbow Rangers that “take on missions as huge as saving the Amazon rainforest.”

Additionally, there is growing importance placed on using digital marketing and ecommerce strategies in the toy industry. These are some of the factors that influenced the choice of an external digital executive as the head of the organization. Georgiadis, who led Google’s US, Canadian and Latin American sales efforts, could introduce new digital strategies to Mattel’s traditional production, marketing and sales departments.

“Mattel has an opportunity to use digital marketing to communicate directly to consumers and, most importantly, to sell product directly to consumers,” notes Richard Kestenbaum, a partner with Triangle Capital, a boutique investment banking firm.

“By disintermediating their retailers, they will be able to improve their margins substantially and tell the story of their products in a way that requires no interpretation.”

The growing demand for toys among China’s consumer classes trigged this month’s announcement of Mattel’s partnership with Alibaba, the Chinese ecommerce giant. Mattel will use Alibaba’s electronic platforms to sell directly to Chinese parents, and could leverage its data analysis to develop retail-marketing strategies.