Utku Tansel is Head of Global Industry Reports for Kids Insights, a global leader in kid’s market intelligence. Utku has 15 years of success in driving global thought leadership, project and content management, delivering strategic business intelligence and insight to major international companies. Throughout his career, he has led many global research programs across a wide range of diverse and dynamic industries including Toys & Games, Licensed Consumer Products, Consumer Electronics, Apparel & Footwear, Homewares & Home Furnishings, and Personal Accessories & Eyewear, and he has always been a firm believer of “knowledge is power”.
Kids Insights, the global leader in kids market intelligence, issued the 1st in a series – Kids Insights Global Report: Toys & Games 2020. The study reveals a comprehensive overview of key challenges, opportunities, and trends which we are seeing from the results of surveying more than 105,000 children a year across the UK, US, France, Germany, Italy, Spain, and India.
As discussed in the Kids Insights Global Report: Toys & Games 2020, while the industry braced difficult trading conditions across a number of markets in 2019, there are still bright spots. In an ever fast-moving and evolving toy landscape, top trends and what influences purchase decision making can shift at a remarkably fast pace.
As such, I have been working in this industry for 12 years and in my career, I have not witnessed such speed of change. Our study – the 1st in a series – takes readers to an exciting journey shaped by key developments and opportunities showcased in a new world order.
The industry is increasingly embracing sustainability and inclusivity while AR & AI push limits on innovation-driven largely by ever-rising smartphone/tablet penetration among children. The intensified streaming wars will increasingly shape content while the potential and growth from YouTube and Gaming licensed merchandise are high. The research shows that the kid-spending economy on toys & games in the UK is worth £969m ($1.26bn), and in the US – $5.95bn.
Some of the key findings from the report include:
AR & AI push limits on innovation
Augmented Reality takes interactive play to the next level enabling to create products that blend both physical and digital play in innovative ways. The ever-rising smartphone/tablet penetration among children is one of the main catalysts. In the US, a substantial 63.5% of 3-9s own a tablet and 65.1% of 10-14-year olds own a mobile. In order to fulfill its full potential, AR needs to integrate real play patterns. Pioneered largely by robotic toys, AI is slowly filtering into other categories. Monopoly voice-controlled AI banker is a good example of this which also addresses “gen speak”. After all, over 15% of 10-12-year olds prefer to control their device by their voice in the US and UK.
Kids’ rising financial empowerment drive pocket money toys
There is an intense battle over kids’ allowance. In the UK, 3-18-year olds receive £248m (US$321.95m) per month (£2.9bn, US$3.76bn a year) to spend as they wish. Debit cards are increasingly being used by more British children aided by new financial products such as pre-paid cards like GoHenry. 21.9% of kids in Spain buy stickers with their pocket money, by far the most popular choice, also 2nd highest globally. In Italy, puzzles accounted for almost one-fifth of all pocket money toy purchases in 2019, the highest in the world. 8.3% of Indian and 10.3% of American kids opt for craft kits with their allowance, higher than any other country. In the US, the number of kids purchasing sensory toys i.e. slime and squishies with their own allowance decreased in 2019.
Licensing forecast to drive growth in 2020
Potential and growth from YouTube and Gaming licensed merchandise is high. Globally, licensed toys were worth US$35bn in 2018 while character/entertainment remains the largest property type accounting for 43.8% of retail licensed product sales*. 2020 will see the release of many long-awaited franchises including Universal Pictures’ Trolls World Tour and Minions: The Rise of Gru. Moreover, the entertainment company is investing heavily in content targeting the post-movie period with the release of new series of “Jurassic World” and “Spirit Riding Free” on Netflix to achieve longevity through multi-platform presence which is a smart move.
Streaming wars to shape content
There is a huge behavioral shift towards streaming with the likes of Netflix, Amazon, Disney, Apple, HBO, WarnerMedia, and NBCUniversal are investing tens of billions of dollars into content and platforms in an intense battle for families’ limited money and time. Netflix’s vast array of content is what appeals to kids the most; 32% of kids who favor Netflix say its variety is the reason why they watch it in the US. Despite YouTube purchases being relatively low across almost all countries, the potential in this area is huge. Ryan’s World is a good example of a YouTuber transcending the platform. Businesses would need to adapt to the new world order so as to succeed and are recommended to take into account not only film and TV content but also streaming platforms’ popular titles when developing their strategies.
Our methodology enables us to track the entire, inter-connected kid’s ecosystem from the toys and games they play with, to their favorite brands and devices. We specialize in helping clients identify new products before the masses do, understand the true performance of a product and how to maximize their investment from a sales and marketing perspective.
To purchase a full copy of Kids Insights Global Toys & Games report 2020, please visit https://kidsinsights.com/global-toy-report/.
*Source: World Bank
**Source: Licensing International Annual Global Licensing Survey 2019 Report
Prepared by Utku Tansel, Head of Global Insights Reports