Having arrived back this week from Hong Kong toy fair, it is clear that the global toy business is still managing the aftermath of the failure of Toys R Us in the USA & some other markets. While many of us are natural optimists, the mood in general was one of digging in and riding out uncertain times.
There is no reason for doom and gloom though. Uncertainty and consolididation often lead to bigger and better things. So by way of presenting an optimistic view of the toy business, here’s some reasons to be cheerful about the global toy industry as we head into 2019:
- Parents recognise the value of playing with toys more than ever – as the human race tries to come to terms with devices and screens that are more addictive than the strongest narcotic, toys are offering a genuine alternative to excessive screen time. When I first conducted consumer research interviews with parents about toys and what they thought of toys (going back 20 years or so), mums/moms often labelled toys as ‘plastic crap’. They generally just saw toys as something the kids wanted and which could keep them quiet for a bit! Fast forward to today, and parents will seize on anything which can leverage their offspring away from screens. This is a fundamental demand driver for toys that is not going away.
- Kids still want to purchase/play with toys – overall, kids play far less with the toys they own vs 30 years ago. I identified a trend towards ‘toy stockpiling’ 5 or 10 years back, whereby kids would end up with so many toys they were literally falling out of their bedrooms, and they were effectively collecting versus playing. Despite the low usage per toy, kids still want toys. They demand and get hundreds of toys throughout their childhood. They play with them to varying extents, dependent on product category/play pattern etc., but they still want and demand toys.
- Product development in toys has never been more vibrant – there will be those cynical old souls out there who think back to olden golden days with the rose tinted haze of nostalgia. But in terms of product output, we have never had more platforms for product launch before. We may have a less simple model than in the past, but for creators and originators, the ways to market are so much easier and more accessible. There are still some formulaic old style products out there, and kids often still love them, but niche and far out products are much more common in the market, which is healthy for our business.
- 2019 is a strong toyetic movie year – we have new instalments of several proven toy selling movie franchises in 2019 including Toy Story, Frozen, The Lion King, Avengers, Star Wars etc. Historically, whether the toy industry was up or down 3-7% would depend on the strength of the movie slate. By this old school measure, 2019 should be good. OK, the impact of movies is somewhat diluted by YouTube & other content distribution fragmentation, informal content etc., but movies at this point still remain a major driver of the toy business, and 2019 looks good from this perspective.
- Marketing no longer needs to cost $millions – once upon a time, the way to drive high sales volumes was to tell retail you were TV advertising the product. Nowadays, as we leave 2018 where the Number 1 product was not TV advertised things have changed. Going back a couple of years, Hasbro’s huge success with Pie Face came from social media trends (along with great distribution and marketing). While the change in marketing model makes things far less certain than when we could just TV advertise everything, the good news is that there is another, cheaper way which should further broaden the range of toys on offer and drive more vibrancy in the toy business.
- Retail diversification/consolidation can offer opportunity – the loss of Toys R Us (in some key markets) shoudln’t be under estimated in terms of impact on the toy business. But, change can also lead to opportunity – can you find alternative distribution channels/models? Some company’s will seize the opportunity to build new business, some will sit & moan about how hard things are without TRU. This is a time to refresh and renew, and we can be quite certain that a national scale toy retail specialist will return in the USA before too long.
So times have been easier, but there are considerable bright spots. Business growth is out there and waiting for those bold, fearless and relentless souls who will reach out and grab it.
We recently launched a new brand and product management service. This service has been very popular and is now full at the time of writing. Some of our brand and product management clients asked us to help them create YouTube content, so we recently launched a new strategic partnership creating content for toy companies. To find out more: http://www.kidsbrandinsight.com/toy-industry-veterans-launch-new-marketing-content-production-service-for-toy-companies/