The toy industry has, as you all know too well, been buffeted this year by the loss of Toys R Us and the overhanging threat of tariffs. So, how are we, as an industry, coping? Are we optimistic or pessimistic? In order to help determine the industry's current outlook, we decided to do a survey.
We kept the survey open for only 2 days and received a surprising 126 responses in that short amount of time. The survey asked five questions with four of them offering a choice of 1-10 with ten being the most optimistic and 1 being the most pessimistic. Here are the five questions and the results:
1. How optimistic are you about this year's 4th quarter? (1 = Least Optimistic 10 = Very Optimistic)
The 4th quarter is the big one for the toy industry so we wanted to find out how optimistic the industry was about how the year was going to finish out. Here are the responses.
What strikes me in looking at these numbers is that 43% of responders answered with the most optimistic responses, an 8,9 or 10 while only 8% responded with the most pessimistic. Over all, despite a challenging toy environment, the industry seems reasonably optimistic about the 4th quarter.
2. How optimistic are you about 2019? (1 = Least Optimistic 10 = Very Optimistic)
It appears from these numbers that the industry is more optimistic about next year than it is about this year's 4th quarter. 11% answered with a 10 (extremely optimistic) while 2% responded with a 1 (extremely pessimistic). 46% of respondent answered with an 8.9 or 10 so almost half were feeling good about next year.
3. How confident are you that you understand what is happening in the U.S. toy market? (1 = Least Confident 10 = Very Confident)
With all of the changes taking place, particularly regarding tariffs, we wondered how confident industry members were that they understood it all.
Despite all that is going on, it appears that the industry is quite confident that it understands the issues and dynamics in the U.S. 44% answered with 8,9 or 10. Only 8% responded with a 1,2 or 3.
4. How confident are you that you understand what is happening in the Global toy market? (1 = Least Confident 10 = Very Confident)
Although respondents were confident that they understood the US market they were not so confident when it came to the rest of the world.
While 44% responded with an 8,9 or 10 when it came to the US, only 28% responded with those numbers when it came to the rest of the world.
5. In what year do you think the toy industry will recover from the loss of Toys R Us? (2018, 2019, 2020, Will Not Recover.)
So, when does the industry expect things to get back to "normal"?
20% Will not recover
Most respondents did not think it would come this year with only 8% choosing 2018. 32% said it would be next year, 2019 and 40% chose 2020. How many thought we would not recover? A surprising 20%, indicating a level of pessimism that did not show up in the other responses.
So, how is the industry doing? Despite some bad and troubling news, the industry seems realistically confident. Still, that 20% of respondents that anticipates no recovery is a troubling number.
Bottom line: The toy people are resilient people…even without Toys R Us.