It is remarkable how well the toy industry has performed in 2020. Consider this headline from The Hollywood Reporter: “2020 Box Office: Domestic Revenue Falls to 40-Year Low.” As the article puts it:
There were no new wide releases at the North American box office over the Dec. 11-13 weekend. Universal and DreamWorks Animation’s The Croods: A New Age topped the chart for the third consecutive weekend with a mere $3.2 million — a veritable fortune during the pandemic — for a domestic total of $24.5 million.
Presently, domestic revenue for 2020 stands at around $2.2 billion, according to Comscore. That’s down roughly 80 percent from 2019, which ended up at $11.4 billion.
“The Croods” is number one at the box office…my God!
And it’s not just the movies. Here is a headline form Chain Store Age: “It’s a record! 11,000 closed stores and 40 retailer bankruptcies in 2020.”
Movie theaters stores are still closed and we lost 11,000 stores on top of Toys R Us’s bankruptcy three years ago. Yet, the toy industry is up.
Why is the industry doing so well? Three reason
- My research shows that the toy industry has historically weathered bankruptcies and recessions with relative aplomb. If it’s a bankruptcy, consumers will go to where the toys are and keep buying. If it’s a recession, children come first, and parents make sure that once family essentials are out of the way, children are at the head of the line for gift giving.
- It is also clear that many bricks and mortar retailers took advantage of e-commerce platforms to sell via the Internet, and through online ordering with store pick up.
- Families are not taking vacations nor spending on movies. That means that they are moving their entertainment dollars to toys and other consumer products.
The Coronavirus vaccine is arriving and 2021 is just over the horizon. Let’s all fervently hope that 2021 will be a year with a strong tail wind.