Latest Trends from the American International Toy Fair

Euromonitor International analyst Ty Law attended the American International Toy Fair held in New York City from 12-15 February 2012. With 35,000 attendees and 1,100 exhibitors, the Toy Fair is easily the largest toy show held in the Western Hemisphere. Key trends noted at the show include finding ways to extend playtime, the impact of smartphone and tablet game applications, the growing tween (ages 9-12) market, price polarisation, and major licensing agreements involving 2012 movies and television shows.

Battling age compression with App-enhanced toys

Age compression – the effect of younger kids playing with toys and games targeted at older kids -was thought to have slowed down in the US. The impact was felt historically when younger kids started to switch from playing with traditional toys to video games at an increasingly younger age. Over the review period, the penetration of video games among American children was thought to have reached its peak. The biggest takeaway from the 2012 Toy Fair is that there is fear that age compression is back but in a new form. This time around it is due to children playing with smartphone and tablet game applications at a much younger age that could cause the future decline in sales of traditional toys.

American parents are turning to these game applications as a surrogate babysitter because of how cheap and easy it is for children to use. They can keep the attention of children for a long time as there are hundreds of game applications that are free or relatively cheap (around US$1) to download. Euromonitor estimates there were 21.5 million iPhones and over 20 million iPads sold in the US during 2011. Both iPhone and iPad sales are expected to grow in 2012 as new iterations of both products are released this year. Traditional toy manufacturers fear that this will lead to a sales decline in their type of toys as children move towards video games and apps at a much earlier age. As such, one of the biggest trends this year is incorporating the play of physical toys with smartphone and tablet applications.

Mattel will be launching their new Apptivity line in May 2012 that uses a patented “Active Touch” technology in which their physical toys are recognized and can interface directly on the iPad. Their Hot Wheels model car brand will be in the first wave of launches. The Hot Wheels cars can be used and played with traditionally but also incorporates the “Active Touch” technology. When played on the iPad Hot Wheels game app, kids can race their car on the iPad screen that responds to the direction and motion of the car! Mattel has also acquired the rights to develop Apptivity toys/apps for popular apps such as, Angry Birds and Fruit Ninja.

Hasbro also found ways to incorporate the use of the apps to streamline their board game play to make it easily accessible. For example, apps can be downloaded that operates as the spinner or dice for Monopoly and LIFE, limiting the pieces required setup and cleanup. The apps also add a “video-game” element to board game, requiring a completion of some task on the device when triggered during game play. Another interesting release from Hasbro will be the Lazer Tag guns that use an augmented reality app. The iPhone/iPod is docked horizontally onto the laser gun and streams a view through the camera. Through various apps the view augments reality by adding aliens or monster characters in the screen as targets for you to shoot.

Creativity for tween girls

Tweens are a prized market in toys and games. Euromonitor estimates that there are over 16 million tweens in the US and they represent one of the largest portions of the buying power for toys and games. In particular, toy manufacturers have particularly begun to target tween girls with products that involve the development of creativity. LEGO, in a traditionally boy-oriented construction category, launched their LEGO Friends to much success in late 2011. LEGO Friends are compatible with regular LEGO blocks but are softer in colours to be more attractive towards for girls. The figurines altered being more doll-shaped and the sets build locations/jobs in a city that push for cooperative play.

Mattel is approaching creativity by leveraging the Barbie brand with their Design and Dress studio. The dress packs come with various stencils, stickers, and markers to allow girls to customize their doll’s dress before slipping it on. Additionally, there are a variety of supplemental dress packs that can be bought to increase design options and extend play.

Price polarisation

During the weakened US economy, cheaper pocket money toys benefitted as parents looked for a way to provide a toy for their children while still saving some money. This is likely to continue as consumers retain old habits and these toys (like LEGO miniatures) are nicely positioned for an impulse purchase. As the economy slowly recovers so has the willingness for consumers to open their wallets and spend on high-priced toys. These toys justify their price tag through promoting their high play value in showcasing the different ways to play. For example, some of the more expensive LEGO sets give instructions to build several different things with the same content in the box, thereby extending play. Alternatively, the higher price can be positioned against something similar which costs much more. For instance, Leapfrog LeapPad Explorer – one of the hottest toy of 2011 – was thought to be priced too high (US$99.99) to compete against other toys in the market. However, consumers were comparing the LeapPad Explorer against the Apple iPad (US$499.99 –599.99) making it look like a relative bargain. Future high-priced toys should take a cue from proper positioning as the LeapPad Explorer completely sold out during the 2011
holiday season.