I have in the past written that the average American shopper has ceased to be. That shopper was a comfort to the toy industry because we knew them so well. We knew what they were willing to pay ($19.99), what drove them to purchase (the lowest price), where they lived (everywhere), and what they wanted (disposable plastic)?
Starting in 2018, I began writing about the split between young, low-income parents and wealthy, older parents (see: “The Toy Industry and the Rising Wealth Gap Between Older and Younger Parents.”) Here is a quote from that article:
According to research, younger parents reside in rural areas, particularly in the American midwest and south. Older parents tend to live on either coast and particularly in major cities. As the authors put it: “In New York and San Francisco, their average age is 31 and 32. In Todd County, S.D., and Zapata County, Tex., it’s half a generation earlier, at 20 and 21.”Italicized quote from “The Age That Women Have Babies: How a Gap Divides America”.
Two parental economic groups mean that a hot price point for a young low-income family is not the same as one for mature high-earners. It also means that they two groups may be looking for very different qualities in a product.
In his article “The Jobs the Pandemic May Devastate,” New York Times reporter Ted Kolko tells us that the gap between the affluent and low-income shopper is expected to grow over the next decade. The number of more affluent shoppers will grow while those with less disposable income will decline. Some of that is due to the general direction of the economy and some of it we can blame on Covid-19.
Mr. Kolko’s article tells us that will be an excellent time to be a doctor, a scientist, or a web developer. It will be a bad time to be a bartender, a receptionist, a cashier, or a flight attendant.
As the New York Times article authors point out, “The pandemic makes forecasting a risky business.” Still, it is important that the toy industry take a hard look at the appetite for higher retails, evidenced by the number of $100 plus toys purchased in 2020. Was it because parents felt badly for their kids stuck at home or because a growing population of affluent parents were willing to pay more for toys.
Here are some questions we should be asking ourselves about these more affluent parents and some possible answers:
What are these affluent parents willing to pay for a toy. $99.99 and up?
What drives them to purchase. Quality and durability?
Where do they live. Big, coastal cities?
What do they want. Toys that educate and entertain?
How would you answer these questions.