Last week we hosted our final Generation Academy session of 2020, where we were joined by a panel of industry experts to discuss 2020 in toy retail and the long-term impacts of the pandemic.
On Thursday 17th December we hosted our final Generation Academy session of 2020, focusing on toy retail in the lead up to Christmas 2020, and beyond. To help us make sense of what has been a tumultuous year, we were delighted to be joined by Phil Geary (The Entertainer), Paul Reader (Toymaster), Melissa Symonds (NPD) and John Baulch (ToyWorld).
2020 has been a year like no other for all businesses in all sectors. For some, it has been of benefit (here’s looking at you Netflix, Disney+, et al). However for the overwhelming majority of industries 2020 has posed significant challenges. So what were the key takeaways:
It was no surprise to learn from the panel that adaptability has been critical to the success of toy retail in 2020, with establishing and expanding Online capabilities at the forefront. Even for those without an established e-commerce operations, Social Media has played a big part for local, independent retailers to connect with the local community and create new sales opportunities.
- Online is here to stay but physical retail will bounce back in 2021
Due to lockdown measures, Online has outperformed Bricks and Mortar by some margin in 2020. This is not a new phenomenon however. Over the past 5 years, Online as a % of total sales in the UK has been far greater than other markets across Europe, yet more toy stores have continued to open. According to the latest Little Voices study from Giraffe Insights (November 2020), 46% of children aged 4-9 cite “In shops” as an influencing factor when answering the question “Where do they get their inspiration for products they want”. That’s 6% ahead of the next best performing factor, TV (40%). Therefore with physical retail set to be open for longer periods in 2021, expect the balance in sales percentage to be realigned somewhat.
- Lower price points to outperform the market in 2021
According to NPD, total toy sales (by value) were up +8% vs. 2019 to the end of November. However, the total volume of units sold remains down on 2019 as higher price point items have outperformed the market. This is to be expected of course, with lower priced items, particularly collectables, more reliant on physical retail and impulse purchases. Expect this category to see a renaissance in 2021 should physical retail be more accessible.
- Connecting with parents an important part of marketing success
With opportunities to interact with children in store limited, and their inability to purchase for themselves Online (in most cases!), speaking to parents has been an important factor in toy marketing in 2020. Social Media offers an incredibly cost-effective paid for opportunity to do this and drive traffic to retail. However investment in Organic content designed to appeal to parents (which can then be boosted via Paid for support) should now be a key consideration for toy brands, especially as a full-scale “re-opening” of physical retail in the UK looks some way off at the time of writing.
- Confidence in TV advertising to deliver sales remains high
There are more cost-effective opportunities to advertise to children than ever before, with YouTube and TikTok set to battle it out in 2021 for children’s attention (and for ad spend – although TikTok still has some way to go to match the efficacy of YouTube whilst still in its comparative infancy as an advertising platform). Whilst there remains no magic bullet to guarantee sales, one thing remains clear. Retailers still trust TV to deliver the best chance of sales success. Campaigns maximising on the reach offered by well-planned and executed TV campaigns have shown demonstrable spikes in Online search interest and ultimately sales, and that is set to continue into 2021.
Above all, 2020 has once again demonstrated how resilient the toy market is, and we look forward to overcoming the new challenges that will be presented to us and helping our clients to thrive in 2021.
For a copy of the recording of the session, please drop us a direct message or contact a member of your Generation Media account team.
Source: Giraffe Insights, Little Voices