Gone are the days when playtime consisted of a bat and ball or doll and make believe. We've gone truly digital with children as young as two years old finding the interface on an iPhone easier to navigate then a flip-flap book. Indeed the thought of a world without touch screens, tablets and mobile games feels utterly bizarre to most children under 10 as they expect everything to tap, swipe, pinch and scale.

Gone are the days when playtime consisted of a bat and ball or doll and make believe. We’ve gone truly digital with children as young as two years old finding the interface on an iPhone easier to navigate then a flip-flap book. Indeed the thought of a world without touch screens, tablets and mobile games feels utterly bizarre to most children under 10 as they expect everything to tap, swipe, pinch and scale.

The smartphone has clearly turned so many industries on their heads (music, film, games, publishing, photography, dating) and created totally new ones (messaging, virtual stickers, even AR apps). The toy, licensing and retail industry have not been immune to this inexorable shift and have also been rocked by the general move to digital. The industry stalwarts of Disney, Marvel and Mattel now have to compete with the likes of Mindy Candy (Moshi Monsters), Rovio (Angry Birds) Outfit 7 (Talking Tom) and Mojang (Minecraft) to name only a few. These are now huge brands and licensing opportunities in their own right that didn’t exist a decade ago and are the children of the digital revolution. The Talking Tom booth at this year’s licensing show in Vegas was every bit as big and bold as the big studio rivals – extraordinary, but with 1.7bn downloads in 3 years who can blame them!

Smartphones and the app store have genuinely been a game-changer for the toy industry with so many ramifications across the board. Apps fundamentally change children’s free time, play patterns and pocket money spend. I’d even contend that they change their behavior from what I see at home but that’s for another blog altogether! Apps are carving up the available free time and media landscape for children in totally new ways as well as re-wiring the value proposition for time spent and feedback delivered from any interaction.

Devices also bring a plethora of additional commercial, licensing & IP and operational headaches to the traditional toy manufacturer. App development and support require a different set of skills, coordination, timelines, economic models and marketing strategy. If you’re in the puzzle or plush business where margins are paper-thin, royalties high, competition fierce, with traditional sales techniques and product cycles deeply ingrained a new digital kid on the block is a scary prospect.

It gets worse. The whole value chain is disrupted. We’ve all seen how online has changed the retail landscape and shopping habits. Between new ways to buy and new ways to play retailers are also struggling to attract people in-store and deliver product innovation.

But all is not lost. Change can be good and fortune can favour the brave forcing new ways of thinking and new opportunities. For the licensing business (as with publishing) it’s meant exploring new commercial opportunities in the app space. And there have been some notable successes – take the Smurfs as a case in point and the runaway success of their app. Disney too have created new successful properties like Where’s My Water. Proof that there’s life in the old dog yet.

Hasbro Littlest Pet Shop App

When it comes to toys both Hasbro and Mattel have explored bridging the gap between physical and digital with what’s been dubbed app-tivated products. Furby is perhaps the most successful exponent to date of this brave new world in crossing the line from physical to digital. And if you go the other way who can ignore the unbelievable success Activision have had with Skylanders in taking a digital format into retail and physical product as an ever-green merchandising behemoth.

There are a number of technologies available to create these interfaces between toys and tablets from QR codes to RFID and NFC, Bluetooth to audio triggers and augmented reality. The trick is to get the right technology at the right price point (not only at retail but critically in terms of manufacture) that delivers a genuine added value user experience to drive incremental sales and indeed revenue.

Importantly the physical product needs to retain a play pattern and reason for being that’s valuable on its own regardless of the digital interaction. Having a physical toy in the aisle that is dependent on a device is simply a barrier to purchase. Similarly, the digital experience should not be any less rewarding if you don’t have the physical toy otherwise the audience will feel cheated and cajoled into purchase. In the new digital age where consumers’ control of a brand’s reputation trumps what any marketing department can do to retain its image you want to tread carefully with these things. 

The trick is a solution where 1 + 1 really can = 3. Both physical and digital products should stand alone and be great in their own right. But together they should add another dimension triggering a desire to engage with both more often without the experience feeling forced.

This becomes even more important as for the most part it’s hard to raise the price point at retail for an interactive product. Retailers are averse to passing the cost onto the consumer and still skeptical that these interactive products will take off after some failed attempts with half-baked products rushed to market without proper thought to the rounded consumer experience. The solution is to keep the price-point but extend the touch points and potential for greater lifetime value and multiple purchase opportunities across offline and online channels.

So how do you go about connecting physical products with digital devices in a simple and cost effective way that can be easily integrated into the manufacturing process and product narrative in an engaging and unobtrusive way?

At Zappar we’ve developed a really clever bridge: Our patented zapcode solution. Here’s one below.

Zapcode

A zapcode is a really smart little device that can be printed straight onto a toy and trigger either an AR experience or simply a transition and unlock from a product in an app.

Unlike a QR code or barcode it can work with a brand’s logo and be printed as small as 8mm in diameter and still work on fixed focal length devices like an iPod touch (they will scan down to 4mm on most auto-focus capable devices). It doesn’t need a safe area around, can be printed on different ground colours, scanned from an angle and display multi-media experiences in the camera view (graphics, animation, video, sound, text or all the above).

Our standard zapcode configuration offers up 4 billion unique codes, allowing unique codes on individual products if desired. Alternatively configurations with fewer variations are sufficient to identify the product line with a unique code.

As it’s simply over-printed onto a figure the additional manufacturing cost is minimal. It’s easy to embed the entire Zappar platform into third-party apps, or to integrate just the zapcode scanning component with an existing game engine.

This system also offers invaluable new data that wasn’t available before around play and purchase patterns (all anonymized in order to comply with data protection regulations of course).

And this isn’t just theory. We’re super-excited to announce our fantastic collaboration with Hasbro that has put this ground-breaking technology into practice.

The all-new range of Littlest Pet Shop characters on sale around the world now feature tailor-made codes based around the iconic logo on the figures. Each SKU has its unique code printed on the product. When scanned through the LPS Your World app these figures are magically transported into the app and unlocked. Both app and products retain their own unique qualities but together they deliver an added reward for the user.

The connection is effortless and the pay-off simple, surprising and puts a smile on your face. This is technology as facilitator, putting the user at the heart of the experience and delivering a moment of magic and wonder. We call it the ‘Zappar Rush’. It’s a bit of bite-size entertainment as a connection point from the physical world of things to the digital world of devices. 

AR has in the past been criticized as a solution searching for a problem. The beauty here is that we’re solving a very real problem for the toy and merchandising industry with a clever AR solution. It’s got huge business application with a wonderful consumer payoff. Welcome to the brand new world of app-tivated play time.