How traditional toys are driving toy industry growth

How Traditional Toys are Driving Toy Industry Growth

Many industry experts have theorized that the rise of technology would spell doom for traditional toys. If anything, the opposite has been true. Today’’s kids, tech savvy almost from birth, have found traditional toys engaging because of the integration of technology, which has given rise to a whole new category of playthings. Digitized toys are creating emotive, connective play experiences for children.

Additionally, toy brands in general have become entertainment properties, leveraging multiple media platforms which allow access 24/7 for their young fans. Brand owners are increasingly understanding the power of media convergence: movies, digitally-created short content, gaming, TV programming, mobile device access, smartphone downloads, and YouTube unboxing videos are powerful marketing tools which have benefitted the toy industry enormously. Let’s not forget packaging since it brings brands to life on retail shelves –– the final piece of the puzzle in building relationships with consumers.

According to NPD, a respected New York-based marketing research company, the U.S. toy industry grew by 6.7% in 2015, translating to $19.4 billion in sales that year. The consultancy also reported that U.S. toy sales increased by 6.5% in 2016. A report filed by The Toy Industry Association referenced NPD sales volume in 2016 for the 80% of the toy industry which it represents, at $20.36 billion in sales. Extrapolating that to 100% of the market, total sales of toys were put at $26 billion.

What’’s terrific is that there is strength in virtually every toy category. Besides well-designed hybrids that merge technology with traditional toys, collectible brands like Shopkins, outdoor/sports toys, STEM toys and the resurgence of puzzles and family games have all contributed to significant industry growth. Speaking of resurgence: hot retro properties have been repositioned in a relevant manner leading to successful toy launches; Teenage Mutant Ninja Turtles, Powerpuff Girls and Thunderbirds Are Go among others; childhood favorites of parents and now their kids. Licensed toys related to blockbuster movies (Star Wars and Minions among others) and evergreen properties from Disney and LEGO to Hasbro and Mattel have contributed to the substantial increase in industry volume. High ticket technology-based toys were heavily purchased during recent holiday seasons to cap off two extraordinarily strong years.

The toy/entertainment industry is on a high that we haven’’t seen since the 1990’s. Will this momentum keep on building? Given the glimpses we’re seeing of the future, I think it will.

What’’s driving the toy industry’s momentum?

Strong digital content drives demand for physical toys. Brands with which we’ve worked and are intimately familiar, such as Paw Patrol, Sonic Boom, Thunderbirds Are Go and Teenage Mutant Ninja Turtles, attest to that. Next, the smart integration of well-developed technology into traditional toys by numerous manufacturers appeals to today’’s kids in a meaningful manner. Spin Master’’s Hatchimals brand is a great example. The more kids interact with their toy “eggs”, the more responsive their Hatchimals become in a similar manner to a family pet. The level of emotive attachment created by these kinds of toys is significant and deeply personal. Because of the constant, deeper level of engagement with toy brands, it could be argued that kids are more emotionally invested, hence the nature of their relationships with these properties are stronger than ever before.

Classic brands like Star Trek and Rugrats have been offering new digital fare and licensed consumer products in a well-conceived manner. They’’re new to younger demographics while endearing to adults who loved these brands when they were young. Recent toyetic movies like Jurassic World, Minions, and The Avengers: Age of Ultron have been smashing successes, naturally lending themselves to licensed consumer products in many categories. Whether classic or new, these properties have broad appeal to adults as well as children leading to purchases of toys, collectibles, apparel and home décor by both groups.

Having said all of this, today’’s kids are similar to adult consumers in that they want and expect constant evolution from their favorite brands; otherwise, they will lose relevance. The elements of enjoyment, surprise and delight cannot be overstated when it comes to today’’s consumers of toys and a marketplace in which there are limitless brand choices.

The female factor.

Because parents are interested in providing toys that allow for creativity while helping their children to learn and acquire skills, STEM (science, technology, engineering and math) toys are doing very well. There is a definite tilt of STEM toys toward young girls now, who are responding to brands like MGA Entertainment’s Project Mc2 brand which touts that: “Smart is the new cool”. Using experimental dolls and employing science and technology, tween girls are able to catch the bad guys.

Girls are also responding enthusiastically to classic and emerging media action figure properties like Powerpuff Girls, Mysticons and DC’s Super Hero Girls. Mattel’’s licensed DC Super Hero Girls action figure dolls and playsets expertly extend the digital experience with physical toys. Licensed consumer products are hitting the market at a dizzying pace due to the tremendous growth potential of superhero role models for girls.

Likewise, a great deal of Hasbro’’s business growth has recently come from brands aimed at girls. According to Bloomberg: “The girl-focused, archery-themed Nerf Rebelle products that debuted in 2013 led the brand to its best sales year and made it the third-largest U.S. toy property, trailing only Walt Disney Co.’’s “Frozen” and Mattel Inc.’’s Barbie. Nerf shipments rose more than 30 percent, helping total sales rise 4.8 percent last year (2014).”

Hasbro’’s recent debut of another hit in the making, Hanazuki, features a young heroine on YouTube whose name means “moonflower” in Japanese; marking the first digital animated series for the toy/entertainment company. A recent article in Forbes states: “”It’’s clear that with Hanazuki, Hasbro is hoping to excite My Little Pony: Friendship is Magic fans and initiate similar success.” It can’’t be stressed enough how lucrative My Little Pony was for the company. The first quarter after the show’’s debut, sales of toys aimed at girls (mostly from the My Little Pony line) grew 21 percent, while toys for boys rose just 2 percent.” A Hanazuki interactive app is planned, and really, can toys and licensed consumer products be far behind?

Are we detoxing from our digital devices?

Given the panoply of sophisticated toys for every age group, and entertainment platforms replete with branded content, it might be surprising to learn that evergreen brands like Hasbro’’s Play-Doh saw substantial growth last year. Likewise, outdoor/sports toys enjoyed a 9% rate of growth in 2016. Kids’’ need for physical, hands-on play and a parental and cultural push for sports-related physical activity likely play a key role in this surge. Interestingly, craft and hobby toys are enjoying resurgence as well.

Most striking of all is the 16% increase in the puzzles/games category over the past year. NPD: “Every type of game is fueling growth, from family strategy and board games, to brainteasers and adult games, as well as preschool games.” Hasbro’’s Pie Face Game and Mattel’’s UNO Card Game were both among the year’s top 10 selling items. This perhaps points to the most significant trend of all.

Families are obviously putting their mobile devices down and playing games again in what some experts refer to as “digital detoxification”; the need to engage in real-life, hands-on activities together. Ironically, pads and smartphones might have played a role in this phenomenon because of consumers’’ ability to join in online gaming communities. Regardless, evergreen puzzles and games as well as creative new entries in this category should continue to fuel interest and growth.

Great toy packaging can seal the deal

Nothing is more exciting to kids than being in the toy aisles of retail stores. And nothing can make great toys come alive like brand-centric package design. The design of toy and licensed toy packaging must create instant recognition and connection with young fans in a scant few seconds and that isn’’t easily done. In aisles where kids are easily overstimulated due to a plethora of color-saturated choices, it’’s hard to hone in on the specific brands with which they’’re most engaged. That’’s why the design of a unique visual brand language is so crucial.

Package design that encompasses color, structure, typography, imagery and selective verbal brand communication should create visual separation from everything else on the shelf. It should also deliver the unique assets of the brand; those that are most emotive to kids. It isn’’t an accident that top-selling toys and licensed properties are so strong in the marketplace. The manner in which they are packaged seals the deal.

Great examples abound. Little Live Pets’’ “”Snuggles, My Dream Puppy”” has a sweet canine face with an expression that begs to be adopted by a child. His package structure suggests a pet tote, making it easy to carry him home. Every aspect of the visual and verbal communication makes the point that he wants to be cared for “”Just like a real puppy”.” What child can resist even though there are legions of plush brands? Num Noms’ Lipgloss Truck looks like an ice cream truck filled with luscious colors and flavors. Kids are exhorted to mix their own lipgloss combos and serve them up. Soft pastel packaging in a sea of bold primary colors, as well as visuals that are irresistible to a child, drove the brand the top of the sales charts over the past year. Hasbro’’s Pie Face Showdown depicts two kids playing the game –– one who is quicker on the button than her friend who has whipped cream all over his face along with the exhortation: “”cream your opponent!”” are irresistible invitations to kids.

Packaging like this promises enjoyment merely in the act of unboxing, which more parents and kids are filming and putting on platforms like YouTube and Facebook. It does more than make a sale; it markets toy and entertainment brands in a powerful manner, creating and driving more fans to these properties. Hence the power of well-designed packaging. Boom!

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