The size of the kid market continues to grow, and according to the latest Kids Insights data, US children are receiving $3.76 billion a year to spend as they wish. With a growing number of children using Debit cards, they have more financial means, empowerment, and freedom than any previous generation.
We wanted to know more so we spoke with Nick Richardson, CEO of The Insights People, the company behind the award-winning Kids Insights annual Global Toy & Games Report 2020. This year’s just released report provides insights on the evolution of the children’s ecosystem & how it impacts the toy industry. We offer the Global toy & Games Report as well as other reports from The Insight People on the Global Toy Experts website.
Richard: $3.76 bllion is a staggering amount of money, do you have data on how children are spending this money and how their spend is changing?
Nick: Absolutely – we have a full breakdown for over 24 categories, which include Apps, Books, Cinema, Sports, Toys, and Tech – which can all be further analyzed by age, gender, region, and even ethnicity. And we have a significant amount of data on not only what children are buying, but also how. One of the key trends that we are seeing is that children’s rising financial empowerment is driving the sale of pocket money toys all over the world.
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.
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 allowance, decreased in 2019.
Richard: Does the kid’s ecosystem change as much as you lead us to believe?
Nick: Absolutely it’s staggering the rate of change and is mainly being driven by technological advancements, and like so many children now have access to devices enabling new trends and crazes to spread very quickly.
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 the UK, 64.2% of kids own a tablet, while 47.6% have a mobile phone. Considering Apple is by far the most popular mobile phone with 30.6% among this group in the UK, it could be concluded that smartphones account for the majority of the category. Across all European territories, over 40% of preschoolers have access to a tablet.
Richard: Based on your report, what are some of the most significant trends affecting the toy industry today?
Nick: There is no doubt the toys and games industry is going through the most significant transformation within its history, which is providing some exciting opportunities for some, and significant challenges for others – we exist to provide our clients with access to the most comprehensive and dynamic independent market intelligence on all things kids, tweens and teens, providing them with clarity and confidence to make informed decisions across their business.
We can see how 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.
Richard: What is the current situation with licensing toys?
Nick: 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.
Richard: What do you think will be the most significant challenges and opportunities?
Nick: Great question, and I believe we prepared some compelling answers to it in our Global Toy & Games Report 2020 that is now available for purchase via https://www.globaltoyexperts.com/kidsinsightsreports.