July 13, 2023

How Squishmallows became the top-selling toy of 2022

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What do Lady Gaga, Warren Buffett, and your eight-year-old nephew have in common? They all collect Squishmallows.

But if you’re not a collector, you might be scratching your head and thinking, “Why are these run-of-the-mill stuffed animals so popular?”

We’ll unpack how the viral stuffed animal brand was able to break $100M in sales with a marketing strategy fueled by great product design, network effects, and a case of the right place (TikTok) / right time (pandemic).

1. The pandemic got adults to play with toys again

Stuck at home during the pandemic, many adults turned to toys and games marketed toward children.Adults shopping for themselves made up 25% of US toy sales in 2022.

To jump on the trend, LEGO released  botanical sets that double as hobby and decor, and Build-a-Bear collaborated with fandoms like Lord of the Rings. It was the perfect time for Squishmallows to enter the space.

2. Squishmallows are functional

A lot of toys are cute or decorative – what sets Squishmallows apart from is their functionality. Their unique egg-shape is a distinct branding feature that also makes them easy to use as pillows: think Pillow Pets for the TikTok era.

3. Their uniqueness makes them extra collectible

Each Squishmallow has a name and short bio, making every one unique and encouraging people to build collections – one genre of Squishmallow TikTok shows collectors searching different stores until they find the one they’re looking for. That means that instead of buying just any old stuffed owl, you’re specifically looking for Winston, the teal owl who’s also an aspiring chef, according to his bio.

People love sharing their Squishmallows on TikTok as much as they do displaying them in their homes, leading to the most significant way Squishmallows saw such significant growth.

4. Squishmallows increase value through network effects

“Network effects” refers to products gaining value as they gain more customers. In the case of Squishmallows, this takes the form of the Squishmallow community.

On TikTok, #squishmallows has over 5.6 billion views, not counting millions of more views from related tags like #squishmallowhunt and #squishmallowhaul.

Fans can also attend in-person meetups to trade Squishmallows. The more people who join the community, the more value Squishmallows fans get from participating – and the more Squishmallow sales roll in, making it possible for the company to grow without running traditional ad campaigns.

“We don’t do traditional marketing. We are where our fans are.” - Laura Zebersky, President of Squishmallows owner Jazwares

Want to learn more about how to use network effects in your marketing strategy? Watch our free case study with Scott Galloway.

Greg Shove
Section Staff