Are Apps Warping the Price / Value Proposition for Toys?



I have been pondering the reason for the drop in toy sales this year.  By all reports, sales have trended down for the first three quarters by around 6% and some are predicting that the toy industry will be off by over 3% for the year.  So what is the cause?

I have speculated in past articles that there is a surplus of play products on the market.  Between toys, video games, apps and mobile devices, there is simply more supply than demand.

I think there may be another reason:  I am wondering if we are witnessing a warping of thePrice / Value Proposition for toys.  Let me explain:

Rack toys and similar items have for many years been at the low price end of the toy department.   If you wanted to get your child an inexpensive toy for under $5.00, they were the way to go.  What happens, however, when apps can be purchased for $1.00, $2.00 or are even free?  I

mean, let’s be honest, many apps provide an enormous amount of immersive play value for a minimal amount of money.  Is it possible those consumers, particularly parents on a budget, are changing their view of the price value proposition?

There may be another consequence to all of this.  Tablets are now ubiquitous.  What if consumers are laying them away with the intention of making that the child’s major Christmas gift.  What if they intent to give apps as stocking stuffers rather than traditional toys?

Bottom line, I think we may be seeing a change in the Price / Value Proposition that will impact the perceived value of traditional toys all the way up the line.  What do you think; am I on to something?

One thought

  1. That is a very interesting thought, indeed. We do have an iPad at home that we use for “emergencies”, that is when we need to occupy the little ones (6yr / 1.5 yr) for a short amount of time while we do something around the house. Personally, we’ve tried to avoid the app-syndrome, though even this little playing time is enough to make them scream for it on occasion. The point of this is that even if the entertainment is cheaper, we aim for more physical and interactive play. I do think we are the exception more than the norm, as I see kids noses buried in iPads, iPhones, Gameboys, etc in restaurants, stores and even at the park. Regardless, even if not a huge impact, I do believe you are onto something Richard, as we are only seeing the beginning of the app influence!

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