Retail

Help Me, Obi-Wan Kenobi: How Star Wars Blasted Merchandising To A New Level

It all started with an empty box under the Christmas tree back in 1977.

More precisely, it started with several hundred thousand empty boxes under several hundred thousand Christmas trees. They were the year’s must-have gift and the dawn of a whole new merchandising era, riding on the runaway success of George Lucas’s first Star Wars film.

Before Star Wars hit theaters, no one could have predicted what a hit it would become — let alone that its legacy would span 40 years with hardly a lag in popularity.

So, the first Christmas after the film’s release, merchandisers were woefully unprepared to meet the demand for toys and other Star Wars-branded products. Some of these products are so rare that they’re now selling for thousands of dollars on the secondary market.

Today, retailers are more prepared. The NPD Group says more than $760 million in Star Wars toys were sold last year, $60 million more than in the previous year.

2017 totals promise to be even bigger for Star Wars, as the franchise just celebrated its 40th anniversary — and with that came even more special, limited-edition items. Plus, there’s that whole Last Jedi film that hit theaters this weekend.

A Bloomberg analysis showed that film companies would be releasing 25 movies with toy tie-ins in 2017. That’s more than triple the usual seven or eight, an unprecedented chunk of the $20 billion toy industry. Here’s how Star Wars set that trend in motion, and how its merchandising empire has grown over the years.

A Long Time Ago, In An Industry Far, Far Away…

Entertainment was a different industry in 1977. Today, if a movie isn’t doing well on its own creative merits, just add toys to keep the revenue numbers in the black. Back then, if a movie couldn’t succeed on its own creative merits, then it couldn’t succeed at all.

Prior to the release of A New Hope, George Lucas and 20th Century Fox drummed up a merchandising campaign featuring t-shirts, posters, lunchboxes and toys. However, due to lukewarm enthusiasm for the upcoming film, neither believed much profit would come of it, so Fox was content to let Lucas take most of the revenue from sales.

So tepid was the early response to Star Wars that Mego Corporation, one of the most powerful toy makers of the era, didn’t even want to make a deal with Lucas. Other toy companies were similarly unenthused and took a pass on the license. (One company that did not take a pass was Burger King, which co-promoted the film through a set of collectible glasses — a different one became available each week.)

Toy production ultimately fell to a smaller company, Kenner, a subsidiary of General Mills, which bought the licensing for $100,000.

The 3.75-inch action figure was a new space at the time and Kenner president Bernie Loomis saw an opportunity to make a few Star Wars-related ones for a cheaper price than standard-sized action figures. Even Loomis did not expect Star Wars to be more than a flash in the pan.

When Kenner bought the Star Wars license in 1977, action figures could take around a year to produce, and by the time Kenner had cottoned on to the demand it would be facing in December, there was no way to get the toys ready in time — even after slashing production time to seven months.

The empty boxes under all those Christmas trees were essentially fancy IOUs for a set of action figures that Kenner had been unable to produce in time for the holiday season.

Kenner spun the empty box as an “Early Bird Certificate.” For $10 to $15, it contained a Star Wars Space Club membership card, a cardboard display stand featuring 12 of the film’s characters, and a set of stickers — plus a postcard kids could fill out and mail in to receive their set of action figures (featuring Luke Skywalker, R2-D2, Princess Leia and Chewbacca) by the spring of 1978.

Selling people an empty box was a ballsy move, and no one had ever done anything like it. Luckily for Kenner, it worked: The Early Bird Certificate box sold out across New York and Chicago, despite being savaged by the media.

A New Hope For A Toy Maker

It was largely thanks to that shortfall that movie merchandising has grown into the business it is today.

By the time Kenner made good on its IOUs, it had figured out what a golden opportunity had fallen into its lap and was not about to make the same mistake again. The action figures shipped with a form that kids could fill out and mail, along with $2, to receive a “Collector’s Action Stand” on which to place the other eight figures scheduled for release that spring.

Kenner sold more than 40 million action figures in 1978, including the original 12 as well as additional characters from the iconic Cantina scene. The collection netted more than $100 million that year.

Kenner never tried to pull another stunt like the Early Bird Certificate, for Star Wars or for any other film, either before or after being acquired by Hasbro in the 1990s. It did, however, re-issue the package in 2005 (with the classic Kenner label) to coincide with the release of Star Wars: Revenge of the Sith.

To fully satiate fans’ nostalgia, the same mail-in process was followed: Fans could buy the now sought-after empty box exclusively from Walmart and send in the enclosed certificate to receive their figures by mail between May and December of 2005.

The Merchandise Strikes Back

In 1980, The Empire Strikes Back hit theaters, and a whole new wave of action figures hit toy store shelves. This time, Kenner was ready. The toy maker promoted the action figures ahead of the release through direct mail marketing, inadvertently spawning the mega-movie marketing era as we know it.

After Return of the Jedi, which introduced Ewoks for the first time, there were two spinoff films about the cute, furry alien creatures. There was also a holiday special at one point, though it performed so dismally that it aired once and never again.

Much later, there would also be animated television series including Cartoon Network’s Clone Wars and the Lego Star Wars series, as well as comics, short films, video games and television miniseries.

These iterations have spawned characters of their own — and therefore, merchandise of their own to match. The partnership between Lucasfilm and Lego was the first time Lego had ever licensed any movie or TV show and arguably saved the faltering toy brand from ruin.

“Help me, Obi-Wan Kenobi. You’re my only hope,” indeed.

Almost two decades later, the Star Wars brand is still propelling Lego to record sales heights. There does not even have to be a new movie for Star Wars Legos and other Star Wars-branded products to remain top-sellers for any company with the license to make and sell them.

Today, however, it’s no longer just about creating toys and collectibles. The Star Wars logo and characters appear on packaging for everything from canned soup to eye makeup and have been used to sell theme park tickets, burgers and even cars.

These Products Are Far-Out

The release of Star Wars Episode XIII: The Last Jedi has once again unleashed a tidal wave of Star Wars products: Socks, home décor, kitchenware and linens, ice cream, nail polish, watches, cufflinks and even Star Wars-styled clothing designed not for cosplay — which is when fans dress up as their favorite characters in the most true-to-movie fashion possible — but for everyday wear.

Analysts are expecting The Last Jedi to gross around $200 million domestically on opening weekend, putting it behind Jurassic World, The Avengers and its predecessor, The Force Awakens, which holds the record for best opening weekend ever at $248 million domestically. Internationally, opening weekend predictions range between $424 million and $440 million.

However, if the past is any indicator, box office sales will only comprise a fraction of the profits drummed up by the latest installment in the Star Wars saga.

——————————–

LATEST INSIGHTS:

Our data and analytics team has developed a number of creative methodologies and frameworks that measure and benchmark the innovation that’s reshaping the payments and commerce ecosystem. Check out the latest PYMNTS Digital Drive Report 

TRENDING RIGHT NOW

To Top