Sales of toys around the world are on the move: The NPD Group found that toy industry sales topped $18.4 billion for the first half of the year, marking an increase of 4 percent from 2017. In terms of regions, Mexico saw the most toy industry growth at 15 percent for the first half of the year. Brazil and the United States closely followed, with 11 percent and 7 percent growth respectively. And brands have helped to fuel that strong growth.
“More than entertainment, brands have been an important trend to move the needle for the industry so far this year,” The NPD Group Global Toys Industry Analyst Frédérique Tutt said in a press release. “Some key themes have also emerged or have been increasing in popularity, such as dinosaurs and unicorns on the one hand, and slime or toilet humor on the other.”
In terms of segments, collectibles were on a tear: Global sales rose by a little more than a quarter – 26 percent – and they now comprise 11 percent of dollar sales in all of the toy industry. Amid toys in the collectibles market, L.O.L. Surprise! led global sales, topping the charts as the #1 toy property in all of the 13 countries NPD Group studied put together. And, beyond collectibles, sales of youth electronics rose 29 percent and were driven by Fingerlings. Sales of miscellaneous toys, on the other hand, grew a little slower at a rate of 12 percent.
The recent report highlights the latest growth in the toy industry: NPD found that the global toy industry has seen steady gains starting in 2012, along with an increase in the global spend per child. In terms of regions, North America – driven by the United States – is the largest part of the world for toy sales. But, in terms of growth prospects, the toy market in Asia has grown by 21 percent over a five-year period. In all, NPD predicts that the market overall will top $99 billion in 2022.
Growth in the United States
In the United States, sales in the U.S. toy industry rose by 7 percent to $7.9 billion in the first half of 2018. The increase occurred during the liquidation of Toys R Us, which, in fact, might have contributed to the growth of the industry. In an analysis published earlier in August, Juli Lennett, senior vice president and toys industry advisor for NPD, said that “it is likely that the Toys R Us news has kept toys top-of-mind for parents and grandparents when shopping for kids in general, benefiting both consumers and the industry.”
Toys that were moderately priced led growth in the market, and when it came to categories, youth electronics increased by 43 percent and dolls rose by 17 percent. In addition, box office action figures and accessories grew sales by 16 percent, helped by the release of several movies such as “Avengers: Infinity War” and “Jurassic World: Fallen Kingdom.” In all, Lennett believes that the toy market has “has been bustling with activity” – and growth will continue through year’s end.
“Existing toy retailers have announced they will be dedicating more space and will carry more toys this holiday season both in-store and online,” Lennett said in a press release. “We’re also seeing new store formats emerge that are more experiential, and we will have new toy retailers entering the space. The industry has shown to be proactive in compensating for the dollars Toys R Us has left on the table, and more.”
New Toy Concepts
Party City, for example, has decided that it is going into the toy business this Christmas. Getting out a few days ahead of Toys R Us signing off for good, Party City announced it will be opening about 50 pop-up stores this year to be called, inventively enough, Toy City. More details on the shops haven’t been released, but Party City has said that the shops will be launched in “optimal” markets with “attractive leasing opportunities.”
“The creation of a Toy City concept to complement our temporary seasonal retail strategy is a logical extension of our brand, one that will allow us to leverage our existing pop-up store capabilities and capitalize on the category whitespace that has recently been created,” Party City CEO James Harrison said in a statement.
Beyond Party City’s pop-up shop concept, FAO Schwarz is making a return to brick-and-mortar retail. David Conn, CEO of FAO Schwarz owner ThreeSixty Group, told Karen Webster in a recent conversation that FAO Schwarz will be back for holiday 2018 with a brand-new store in New York City.
Toys are far from dead: ThreeSixty Group also owns Sharper Image, and Conn noted that toys are consistently among its biggest sellers. But consumers are looking for products that go beyond the core function in an unexpected and surprising way, delivering the “wow factor.” Will this quality help grow the toy market? Time will tell.