ORB™ is a design and manufacturing company specializing in trendy toy items primarily for children between the ages of four and twelve. Chief Executive Officer Steve Kay began the business in the 1980s in Halifax, Nova Scotia. It was initially as a side venture “manufacturing everything on the couch after [working at his] day job,” until it began to burgeon in the 1990s and expanded its operation into the United States as a result.
At its height in Halifax, the company had over fifty production workers stationed in the city, with every toy manufactured there; however, Kay explains that the margins could not be attained for growth in Halifax, and something had to change for the company to survive. That step came in 2006 when ORB™ set out to find another area in the world for manufacturing and subsequently opened a location in Hong Kong to subcontract factories in mainland China.
China had developed an infrastructure for toy manufacturing, which meant that companies like ORB™ suddenly had access to less expensive plastic injection moulds, moulded tooling and resources which would lead to increased margins as well as allowing the company grow quicker. Today, ORB™ continues to operate its Halifax and Hong Kong locations and has a showroom in Los Angeles which is planned to become a permanent American location eventually.
ORB™ specializes in what the toy industry refers to as ‘trend items’. Kay describes these as a type of toy holding a strong interest to kids at the present point in time. Examples of recent trend items include slime and ‘squishie’ toys. Kay says that touch-based toys are trending right now because many children are reportedly complaining about stress, and with the amount of screen time today’s children have on tablets and phones, there is a push toward toys that can provide a hands-on, tactile experience that screen-based activities cannot. ORB™ has filled this gap in the market with its toys like ‘Soft n’ Slo Squishies™,’ ‘ORB Slimi Café™,’ ‘Bubbleezz™,’ and ‘ORB Odditeez™,’ which all have a tactile nature to them and are proving to be incredibly popular among children.
Beyond its unique toy products, what separates ORB™ from its competition is the company’s ability to move very quickly from concept to prototype for its toys. It has invested in three-dimensional printing technology, and it has found success in its rapid production ability.
“ORB™ can go from concept to store shelf in ninety days (if necessary),” says Kay. This is dramatically faster than competitors. This speed allows ORB™ to observe what children want in their toy products right now and get it to them quickly; with a longer development cycle like larger companies have, it can be difficult to predict what kids will be interested in so these companies have to spend a high percentage of their gross margin on marketing to create end consumer demand, eroding their profitability. This is not necessarily an unsuccessful approach, but ORB™ can identify what kids want and act on the demand to great success.
Being an internationally operating company, most of ORB™’s suppliers are in China – with some others in Europe and the United States – and are extremely important to the company’s continued success. “You’re only as good as your weakest link,” Kay says of being a successful company, which means that suppliers working with ORB™ must be willing to engage in the toy market with the company’s signature speed-to-market approach, or success will not happen.
ORB™’s chosen supplier companies are willing to make the necessary investment toward this approach but ORB™ itself also spends a great deal of time on assessing these factories to find companies with a compatible size, an ability to produce at the desired level, and even the right attitude to match what it looks to do in the marketplace.
Kay says that he is extremely proud of his team of “incredibly talented people,” and while hubs for toy design are generally found in bigger cities like Los Angeles, Toronto, or Melbourne, creating a world-class company in a more geographically isolated part of the world is something of which he finds very gratifying.
ORB™’s Halifax-based team is made up of 130 employees, most in their twenties and early thirties. In a province notoriously known for its outmigration of youth, Kay is proud to be an employer of young, local talent. Although experience in niche areas like toy design and consumer packaging is hard to come by, it doesn’t stop Kay from giving ambitious and driven individuals a chance. “Willingness to dig in and learn can go a long way, especially when no one is telling you there’s something you can’t do,” says Kay.
When it comes to the company’s challenges, there is a threat on the American side of things with the possibility of toy tariffs, which can come out of practically nowhere within six months and can cause a scramble for goods that come out of China. ORB™ initially looked for alternatives to Chinese manufacturing to combat this problem, but it partners in China engaged in joint ventures to seek out factory locations in other parts of the world to mitigate this. “A good partnership can help you rise up to a challenge if your partner goes the extra mile,” says Kay.
Another increasing challenge lies with inventory and how retailers are looking to move to shorter cycles. For example, Wal-Mart requires an increasing percentage of its business come through domestic fill to shorten lead times, and this has led to a much tighter shipping window and supply chain.
What is more, companies like ORB™ must always keep safety compliance a priority, which can be more challenging depending on what type of group is calling for it. Kay says that government-mandated compliance tends to be easier as governments understand massive company changes cannot be made to formulations overnight and need time and planning.
ORB™ has garnered a staggering number of awards and recognition for its efforts in the children’s toy market. In recent years, ORB™ has gained the The NPD Group award for the #1 Selling Toy in the U.S. in the supercategory: ‘All Other Toys’ at New York Toy Fair for its popular ‘Soft’n Slo Squishies’ toy, as well as netting a Parent Tested Parent Approved for the same toy.
“We have plans to make a much more significant penetration into the American mass market, with some exciting new programs to hit store shelves in the upcoming quarters of 2019,” shares Kay. The company will also continue to invest in the market of toys that sell for less than ten dollars, by focusing on toys that are tactile in nature and have a collectible element – a 2019 trend.
Kay believes there is much potential in the market, as major toy companies are currently shrinking in size, along with the industry at large, but ORB™’s growth continues to be very strong thanks to its approach. “What ORB™ brings to the table is what the market needs today,” says Kay, and as far as toys, the company will continue to “play in the same sandbox,” that has brought it to the success it has enjoyed thus far.