Will 2021 be another big year for the toy industry? I did some research and I found a positive sentiment regarding the U.S. economy as a whole. I, however, have some caveats about the toy industry.
The Wall Street Journal conducted a survey of economic forecasters to find out what kind of consensus there was on the prognosis for economic growth in 2021. The article, “Forecasters Lift Expectations for 2021 Economic Growth,” reported that they surveyed “62 business and academic forecasters.” Here is what they found:
Economists on average expected gross domestic product to expand nearly 4.9% this year, measured from the fourth quarter of the prior year, according to the business and academic economists surveyed in February, an improvement from their 4.3% forecast in January. They cited the distribution of Covid-19 vaccinations and the prospect of additional fiscal relief from Washington for the brightening outlook.
A retail consulting and research company, Customer Growth Partners released a report on retail activity in 2021. They are predicting that “retail sales will increase 8.1 percent.”
That’s good news, on a macro level, for the economy and retail sales, but what about the toy sector? It appears that 2021 is off to a good start for the toy industry, yet one has to wonder whether some of the big-ticket toy consumption in 2020 will be repeated in 2021.
Playthings that retail for over $100 are the closest thing the to industry has to “durable goods”. For example, the Barbie Dream House was a big triple-digit retail seller in 2020, but how many Barbie Dream Houses does a family need? Similarly, 2020 was a big year for swing sets and outdoor play. Again, many of these products retail for three figures. However, does a family need more than one swing set or trampoline?
If the vaccine does secure the kind of rapid distribution, we all hope it does, will the resulting return to a level of normality cause stir crazy adults want to get out of the house and back to Disney World and the movie theater. A desire to travel and get out of the house in the latter half of the year may mean that dollars diverted from entertainment and travel to toys in 2020 could flow back the other way in 2021
I sense that we should bet on a good 2021 but not get carried away. There are just too many unknowns at this point.