Pictured is a display of Crazy Aaron’s Thinking Putty Thursday, April 7, 2016 at the Building Blocks Toy Store in Chicago, Ill. (Anthony Souffle/Chicago Tribune/Tribune News Service via Getty Images)
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Heading into March, the team at Crazy Aaron’s Thinking Putty was on track to exceed its financial projections for the year.
Then the coronavirus pandemic hit.
On Friday the 13th of March, the company, which specializes in soft, malleable putty, was shutdown, unable to ship or make its own product. And that was just the start of its troubles.
Crazy Aaron’s Thinking Putty has long been considered an impulse purchase, something consumers pick-up at the last minute before they cross through the checkout lane. It’s the type of toy that is often tested first, squished in kids’ fingers or stretched as wide as it can go between two hands, before it finds its way into parents’ carts.
With retail stores shuttered, play dates canceled and schools moving into homes, Crazy Aaron’s product sat on shelves, no word of mouth or last-second purchases to lift sales. It had to think fast about its future and make quick decisions about how it would adapt to the new reality.
“The second half of March, April and into the middle of May was severe,” founder and CEO Aaron Muderick said. “There were heavy double-digit declines for the revenue of our product.”
The company’s putty can be found in big-box retailers, mom and pop toy stores, specialty shops and even bookstores. While stores like Target and Walmart were able to remain open, Crazy Aaron’s other retail partners were shuttered.
Some of these retailers canceled orders or held back on shipments in order to manage their own cash flows, leaving Crazy Aaron’s to take the financial hit. (The company, which is private, declined to provide specific amounts.)
“Hundreds of accounts,” Muderick said. “It adds up.”
Adapting to survive
Within the first week of shutdown, Crazy Aaron’s was able to pivot to hand sanitizer production. This allowed the company to use its factory in Pennsylvania and help pad its bottom line. Demand in late March was high for the product, and Muderick said the company was able to make up some of its lost revenue. But once traditional hand sanitizer companies scaled up to meet demand, Crazy Aaron’s saw sales dropped.
Fortunately, putty sales have begun to lift. Although sales are not quite to pre-pandemic levels, they have improved since mid-May as more toy stores ramped up their online operations. But without those impulse purchases at the cash register, Crazy Aaron’s shifted its marketing strategy to cater to an older demographic.
Right before the coronavirus hit the U.S., the company launched an aromatherapy line of putties with more adult scents like rosemary, rose flower and mint. The idea was to create a product that was targeted toward a more grown-up consumer to help with focus and relaxation.
“We introduced it at New York Toy Fair,” Muderick said. “It’s one of our most popular lines so far this year.”
The other piece of its marketing strategy has been to rebrand its putty as something to help kids, who had their schools, activities and summer camps shuttered, with stress relief and focus.
An uncertain future
Even with the rise in sales, Crazy Aaron’s still faces a difficult road.
Retailers hit hard by the outbreak aren’t making the same commitments to purchase toys in bulk ahead of the holiday season. Typically, the summer is the time when toy manufacturers and toy sellers meet up at big conventions to hash out deals, check out new products and prepare for the lucrative month of December.
“No one knows what is going to happen in the next four weeks, let alone the next four months,” Muderick said.
In-person meetings are essential to Crazy Aaron’s, as putting putty in potential sellers hands is a key way of persuading them to purchase the product. Virtual toy gatherings like Toy Fair Everywhere, hosted by the Toy Association, have been a way for Muderick and his team to meet potential clients, but “it’s no substitute for an in-person show,” he said.
The benefit of the online convention was that it allowed Crazy Aaron’s to connect with some retailers that would not have been able to attend some of the bigger physical toy fairs. Muderick said he was able to make a connection with one retailer that has around 75 stores but operates in a part of the country that makes it difficult and costly for it to travel to bigger shows. Without Toy Fair Everywhere, he may never have met with the retailer.
Muderick declined to say which retailer he was speaking of, but said while a dialogue was opened between Crazy Aaron’s and the retailer, no sales deal had yet been struck between the two.
CEO of Crazy Aaron’s Thinking Putty, Aaron Muderick poses with Thinking Putty during the annual New York Toy Fair, at the Jacob K. Javits Convention Center on February 16, 2019 in New York City.
JOHANNES EISELE | AFP | Getty Images
For now, Crazy Aaron’s is relying heavily on the samples it sends out to potential buyers to lure them into making large purchases. Typically, these boxes of product would go to a buyer’s office, but because of the pandemic, the packages are being sent straight to their homes.
This has been a boon for Crazy Aaron’s because a lot of these samples arrive and get in the hands of the buyer’s children.
“We are getting a leg up over other products competing for shelf space,” Muderick said. “Rather than the seller asking ‘how is it different from slime?’ Their kids are getting into it.”
Muderick is optimistic that Crazy Aaron’s will be able to survive the pandemic by using a little ingenuity and new marketing tactics.
“Is this company going to be here in five years? Yes. Is the company going to be at the ultimate growth path? Yes. Is that going to look like a steady trend line? That’s unlikely,” he said. “But, we’ve planned for rainy days and sunny days.”