Disney’s Star Wars merchandise stuffed toy depicts the character Grogu, commonly known as Baby Yoda.
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There are two things that make the toy industry thrive today: inflation and the consumer group known as “kids.”
According to data from the NPD Group, these kids are responsible for a quarter of all annual toy sales, which are worth around $9 billion and are the biggest growth driver in the industry as a whole.
This cohort, which the NPD identified as 12 years of age or older, has been contributing steadily to the industry for many years, but spending has increased rapidly after the pandemic, resulting in year-over-year gains despite tough comparisons. .
It’s also an important time for the toy industry as the holiday season approaches. While sales for board games, puzzles, and plays increased sharply during the pandemic, in the first nine months of 2022, sales were down 3%. Higher toy prices helped offset these losses, as sales for the period increased 3%, NPD reported.
Children, who tend to spend more on toys, love cartoons, superheroes and collectibles that are reminiscent of their childhood. They buy goods such as action figures, Lego sets and dolls that are generally considered “for kids”. However, in recent years, toy manufacturers have created product lines specifically for these consumers, realizing that demand is high among this generation of adults who still want to have fun.
“The definition of adulthood has certainly evolved,” said Jeremy Padawer, brand director for toy company Jazwares. “What it used to mean, being an adult, being a very decent, serious member of society. And to do that, you have to express it intellectually, emotionally, according to every other way.”
“We feel a lot more free now to express our fandom as part of coming of age,” he said.
During the 70’s and 80’s, the toy business began to shift away from an industry focused solely on the next inventive item and accept the creation of more products based on entertainment franchises. Sure, before this time there were toys based on movies and TV shows, but this is where the trend started to take off.
“In 1977, ‘Star Wars’ came out and you started seeing more licensed products at the retail, where we celebrated our fandom with toys and toys. collectibles,” said Padawer.
This includes non-toy goods such as bed sheets, crockery and clothing.
“At the time, most of the intended recipients were children,” he explains. “But the kids born in the ’70s and ’80s were really the first generation to have multiple licenses and multiple products available for them to stick with explicitly. And it’s no surprise that those kids are. is in their 30s and 40s, that they continue to prove it.”
This kids trend started to emerge about a decade ago, when superhero movies and explosive comic book culture went mainstream. It’s become more important to toy companies’ profits over the past five years, said James Zahn, editor-in-chief of “The Toy Book” and senior editor of “The Toy Insider.”
Toy manufacturers like Lego have embraced these consumers and created product lines, often associated with nostalgic entertainment properties, just for this group. HasbroThe Black series for action figures is a prime example of this, tapping into the desire for high-quality Star Wars and Marvel collectibles. Even blur There are lines from Barbie and Hot Wheels designed specifically for this group of buyers.
Toy companies have even started creating their own TV and movie content to support the toy lines. Mattel has set up his own in-house film company and is set to release “Barbie” in July 2023, and Hasbro has purchased eOne and will bring “Dungeons & Dragons: Honor Among Thieves” to theaters in March.
These movies are not designed for young children, instead cater to this toy-loving group of older consumers.
Other brands, such as funalways caters to mature collectors who are in tune with their inner child.
But nostalgia is not necessarily tied to intellectual property.
“We know this generation takes their jobs very seriously, but ultimately they want to have fun,” says Josh Shave, senior marketing manager at Razor.
Razor started selling its classic scooter in 2000. Within six months, the company had sold more than 5 million units.
“Twenty years later, all those kids are adults,” Shave said, noting that Razor has made versions of scooters and electric motorcycles just for these people.
“The Razor Icon is literally the adult version of the scooter, but it runs on electricity,” he said. “I just finished an event and everyone was saying the same thing, ‘Oh man, I’m so glad they came up with all these adults. I’m so glad they came up with this that reminds me. ..’ and they’ll tell me a story.”
The Razor logo, which can reach speeds of 18 mph, retails for $600 and is part of the company’s broader collection of children’s items. There’s also the Rambler, a vintage minibike that looks like an acrobatic bike from the ’60s and can reach speeds of 15.5 mph. It retails for $660.
Lego Star Wars toys on display inside Toys store “R” Us Inc. in Paramus, New Jersey, USA, on Tuesday, November 26, 2019.
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Zahn also points to Basic Fun as another example of a company turning traditional kid-centric toys into unique pieces for adults. The toy maker has partnered with Netflix to create a larger version of its “Stranger Things”-based Lite-Brite set that can be hung as artwork. It costs 100 dollars.
“And a lot of what we’ve seen expanded during the pandemic because people went home and they rediscovered the game,” said Zahn.
That connection to that imagination doesn’t end with the lockdown.
In the past 12 months ending in September, the kids group represented 60% of dollar growth in the industry, despite accounting for only a quarter of revenue, according to NPD Checkout data.
“So that’s a big hit,” said Juli Lennett, NPD’s vice president and toy industry advisor in the United States.
However, risks remain high for the toy industry as it enters the final weeks of the year.
Inventory is a big challenge for retailers across the board. Supply chains threatened to empty shelves for holiday shoppers last year, prompting many big-box stores to bet on stock to order and receive earlier than usual. As supply chains loosen, more people have excess inventory, leading to steeper price drops as demand weakens.
Some companies, such as MGA Entertainment, the maker of LOL Surprise dolls, have decided to offer more items that sell for less than $15 to cater to more cost-conscious parents.
CEO Isaac Larian told CNBC that the company had about 20 products that sold for $5 to $15 last year. This year, there are more than 200.
Children, on the other hand, are coveted consumers because they are often willing to spend more money than others to buy things for themselves.
“Right now, adult toy buyers are the reason for the growth in the toy business,” says Larian.