Has The Pandemic Been Good For The Toy Business?
In writing this provocatively titled article, let’s first make one thing clear – things are very tough for some toy businesses right now, not everybody is winning. But overall, there is a viable argument to be made suggesting that the global toy business has benefited overall from the pandemic.
There are two primary ways in which the toy business has benefited from the pandemic (despite the stress, uncertainty and threat to health and wellness):
Firstly, in purely financial terms, in most major toy markets reports made by respected sources in the public domain suggest YTD sales growth. This is both seemingly miraculous but yet in some ways logical. The toy business growing during 2020 is miraculous because so many retail outlets were locked down at some point and because of the biggest disruption to human society and our way of life since World War 2. Some companies haven’t seen sales growth and in some categories things have been really tough. But overall, parents have bought more toys across the world because they want to gainfully occupy their children so they don’t feel so scared or depressed about their changed situation but also because lockdown means more home time which means more screen time, and toys are generally seen by parents as a potential antidote to screen time.
The second way though in which the toy business has benefited is in a shift in balance between sales of licensed and non-licensed toys. Historically we would occasionally see a year which was really light on blockbuster triple A movie releases, which would in turn see the toy market dip or at least fail to grow. In 2020 though, we’re seeing a lack of cinematic releases due to the pandemic lockdown closing movie theatres as well as reducing footfall, but yet we have still seen sales growth.
The great news for the toy business overall is that typically when movies aren’t driving toy sales the industry reverts to pushing evergreen brands and new products. The focus on selling more own brands generally leads to higher profits per unit sold, and if overall sales are still up that means someone somewhere in the toy industry is making more profit. The need for new product ranges without licenses should lead to more new toy product lines eventually turning into evergreen brands.
Above all though the toy business is enjoying a less damaging impact from the pandemic than many other industries, and for that we should be thankful. We can also be grateful in time for a rebalancing of the product mix towards our own non-licensed toys which should be to the long-term benefit of the industry.
We run a Consultancy business for toy companies. We work with major toy companies through to start ups and one person bands. For more information on how we help toy companies grow their distribution around the world: www.KidsBrandInsight.com/services
For more articles & insights on the toy and games business, sign up here for our free e-newsletter sent straight to your inbox: https://forms.aweber.com/form/54/1325077854.htm