Generation Media’s European Christmas Retail Round Up
As a tumultuous 2021 draws to a close, Generation Media were joined by a panel of toy retail experts from across Europe to assess the trials of tribulations of the past year.
Last week we hosted our final Generation Academy session of 2021 where we were joined by a panel of Toy experts from across Europe to discuss the impacts of the pandemic and how it has affected business versus initial predictions.
To help us make sense of the differing landscapes from the many European territories, Frederique Tutt from NPD opened the session to walk us through the latest data from across the globe, highlighting European performance versus last year, as well as versus a “normal” year in 2019.
We were then joined by panellists Geoff Sheffield from the Entertainer, Adam Yates from Criteo and Anja Schuh to provide some further insights into their territories and the challenges they have faced this year. So, what were the key takeaways?
Europe has bought early, with the UK Market tailing behind.
With longer lockdown period across Central Europe than there was in the UK, several markets have come out of lockdown to positive sales results in Toys & Games. At the end of November, most major markets were in a healthy position versus 2020, with France (+7%), Spain (+20%), Germany (+5%), and Italy (+9%) all reporting positive increases in sales value. However, the UK consumer has been waiting longer this year, as sales were in a negative position by the end of November, being -5% in value versus 2020.
High Street retail has bounced back.
Despite traditional Bricks and Mortar stores had been outperformed by digital platforms in 2020, it was great to hear from the panel that whilst the year set off to a disappointing start due to stores being closed, the confidence in the high street came leaps and bounds throughout the summer months all the way through to September. With pent up pocket money, children were back in store and categories such as Puzzles, Board Games and Building Sets all seen increases YoY versus 2020.
But Q4 has continued to hold a strong digital presence for purchase.
The pandemic has only accelerated the uptake of consumers preferring to spend online, and with Germany and the UK leading the way, retailers have developed and delivered on their ecommerce capabilities to ensure the simplest path to purchase. However, what we have seen is that despite the path to purchase has been made much simpler for consumers, the overall lead time is much longer. This is especially true in the run up to pre-Christmas discounts, where consumers have been seen to research product availability and pricing across different retail platforms for as long as 4x weeks before they transaction.
Lower priced items have been hit the hardest in the UK, but not elsewhere in Europe.
Despite the predictions that lower priced items would make a resurgence in 2021 due to stores reopening, the UK market has seen a somewhat negative effect of its progress in digital purchasing in that items priced around £20 or less have suffered. Online buyers are focussed on finding specific higher priced items and heading straight to the checkout, without browsing for further items which would typically happen when the consumer is in store. However, in the likes of Germany and France, we are not seeing this trend as High St retail remains strong.
What did our panellist predict for the state of play in 2022?
All panellists agreed that the obstacles from 2020 and 2021 are likely to continue into 2022. However, with those challenges thrown our way, only new innovations can be born! A common theme across our panellists was that the predicted inflation for next year is going to create a more varied mix of products available to the consumer, as some products supply chain costs may be too much to sustain. In particular, both Frederique and Geoff highlighted that they thought Llamas and unicorns were things of the past, 2022 is set to be the year of the Dino.
Another common though from both Anja and Frederique was that 2022 presents a huge opportunity for retailers to create a new consumer experience. With content being predicted to lead the way in 2022 as more family focussed blockbusters are released, the High St. can capitalise on bringing this into store and encouraging the footfall to return.
Above all, 2021 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 2022.
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.