Consumer Homogenisation Continues to Shape the Toy Industry
Over the past decade the toys and games market has been drastically changed by the onset of a series of mega trends: age compression and growing pressure on young children to succeed; declining focus on gender-specific toys; growing popularity of STEM and STEAM toys for children as well as board games and colouring books for adults; globalisation; and increasing usage of video games across all ages. All of these trends break down boundaries between different consumer segments within the toys and games market, resulting in an increasingly homogenous consumer base interested in a shrinking variety of products and brands.
The ageless consumer
Age compression and growing pressure on young children to succeed has been a topic of much discussion over the past decade. The main concern is that children are missing out on childhood, replaced by busy schedules packed with structured activities. At the same time, more adults are playing games. Video gaming among adults has become mainstream, and adult-orientated board games, puzzles, drones and colouring books are gaining popularity every year. The end result is that young children are growing up faster, but remain interested in toys and games well into adulthood.
In late 2015 Target Corp made headlines by announcing that it would no longer position toys in aisles segregated by gender and let children decide what they want to play with. The move is in response to changing attitudes towards gender roles and perceptions thereof among millennial parents. The breaking down of gender stereotypes in toys is opening categories like dolls and accessories to boys, but it also puts dolls and other girls toys in direct competition with more gender-neutral and boys’ products.
Franchises without borders
While gender neutrality has not yet affected emerging markets, the proliferation of communication technology, especially internet connectivity, has broadened the reach of entertainment media globally, driving interest in licensed toys and apparel across the globe. While the US remains the biggest market for licensed toys, dynamic growth in developing markets has content owners paying ever more attention to a global audience. Casting popular Korean, Chinese and Indian actors as well as tailoring content to be more appealing to a global audience has become common practice for Hollywood blockbusters, especially those with significant licensing potential. This is making entertainment properties like Star Wars and Transformers increasingly popular around the world, diminishing many of the cultural differences between different countries, which are increasingly dominated by global entertainment franchises instead of local or regional ones.
Impact on toy makers
As boundaries between different consumer groups erode, so will the differences between the products they buy. Therefore products aimed at narrow, clearly defined demographics will continue to lose share to ones aimed at a broader audience. Early childhood products with a narrow age span will see intensifying pressure from STEM toys, especially with electronic components that allow them to adapt to a wider age group. At the same time, we can expect popular entertainment brands to see longer life cycles due to nostalgia-driven demand from adults.
Fading gender-based divisions within toys pose a serious threat to girls’ toys. While efforts are being made to make categories like dolls more socially acceptable for boys, the move to get girls to play with boys’ and gender-neutral toys has been on a far greater in scale.
However, these trends will be developing over the next five to 10 years, and even more slowly in emerging markets, making the continued growth in influence of global entertainment franchises at the expense of smaller properties the biggest short-term megatrend. Consequently, we can expect to see growing sales of licensed toys based on multi-generational, gender-neutral franchises with global appeal.