Are We Entering A New Golden Age For The Toy Industry…?
There’s always something to gripe about in the toy business. In fact if you listened to the talk in the corridors at toy fairs around the world, you’d think the industry was about to plummet around our ankles, and you’d end up thinking that each and every year if you listened to closely to some of the lovable whingebags we all meet on the circuit!
However, there is genuinely a lot to be thankful for right now in the toy business. Yes manufacturing price inflation is an ever present challenge, retailers aren’t making things easier and strong competition is always there. But if you look at the sales trends for play related products, if you look at the kids movie slates coming out of Hollywood for at least the next 5 years, if you look at the plethora of digital brands we can tap into and if you look at the vast array of really exciting technology which keeps opening up opportunities for us there is much to be positively excited about!
The consolidation the industry has seen in the last 5 or so years has on the whole (in my view) been hugely beneficial to the toy business as a whole – for instance while for some the fact that Disney owns so many massive franchises now gives them a great degree (perhaps too much for some people) control, that actually works to the toy industry’s advantage in my opinion – because Disney really know what they are doing, and so they aren’t going to have massive franchises directly competing at the box office versus when they were competing with Marvel & Star Wars, which means shelf space can be more sensibly allocated based on staggered release dates, reducing cannibalisation & driving additional sales overall. And the more the overall category performs, the more retail shelf space we are likely to get, opening up more opportunities for other licensed and non licensed products.
I also really love the new toy companies who have entered the industry in the past few years, stuck around and are now definitely up and coming. What clears space for these up and comers is the consolidation among more established toy companies allowing for fresh approaches to sparkle up the toy aisles around the world.
The other hugely positive trend which is still in it’s infancy, but which is going to continue to revolutionise the industry is the removal of barriers to entry via crowd funding. The type of products that would usually not even make it to a retailer pitch meeting now arrive at the doors of sometimes snooty toy companies with a proven following, existing sales record and with a ready to order product versus just a concept needing fully designing and engineering. At last the toy industry has a path to being truly creative versus churning out the same old stuff – wow, we can really push the boundaries now because we can prove consumer demand before we have to secure retail support.
So yes, there are as ever many ongoing challenges and not a few threats in the toy biz, but actually there is an awful lot of positive stuff going on which makes me think we may be heading into a new golden age of the toy industry…!
by Steve Reece, CEO of Kids Brand Insight www.KidsBrandInsight.com, a leading Consultancy to toy, game and kids entertainment companies around the world, which helps companies find the right toy & game factories, consumer research test their products with kids and parents and secure export distribution/market entry around the world