The End of $19.99

For several decades, yes decades, we have been telling each other that the hot retail price point for toys is $19.99. We have based this figure on the assumption that the average parent is young with low wages and little in the way of disposable income.

The 21st century is not the 20th, and that assumption is out of date. The only age group with an increasing birth rate is first-time parents in their 30s. Consider this graph from March of Dimes Peristat:

The birth rate is now skewed towards older parents. In fact, those aged 30 to 39 now produce 4 1/2 times more babies than those 20 and under. They produce almost as many children as those 20 to 29.

This shift from younger parents to older parents becomes significant when considering the average household income for each age group. Here is a Statista graph showing the average income of the person owning a home:

The older the parent, the more they have to spend on toys. Parents who are in their 30s can afford more than $19.99 for a toy. It is therefore time for the industry to seriously reconsider who the average shopper is what they are willing to pay.

Or maybe there is no longer an average shopper. Perhaps there are two large groups, one younger and with limited means and one older with money to spend. What is that older parents’ hot price point? Is it $29.99, $49.99, $69.99? We won’t know unless we do the analysis and test the waters.

To begin the process of reconsidering what parents are willing to pay for toys, we have to start by accepting that the young parent we knew and loved as our consumer ten or twenty years ago is no longer the parent buying our toys today. He and she are older, wealthier, and ready to invest in better quality toys at higher prices.

4 thoughts

  1. Excellent point. Will this also be the end of Hot Wheels for $1? That’s a hard price point Mattel has been struggling with for decades. Designers are forced to agonize over every paint & deco op, and whether the precious die-cast metal goes on the upper body (collectors prefer, but the high CG makes for bad track handling) or on the bottom chassis (low CG=better track car but collectors hate plastic bodies).

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