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Back-to-School: Friend or Foe to the Toy Industry?

Jul 11, 2017
Juli Lennett, Senior Vice President, Industry Analyst ;
Toys

It’s hard to think about the topic of back-to-school when my kids just wrapped up school only two weeks ago here in New York. But, alas, we at NPD have already started to talk about it as retailers are preparing for the next big shopping season for many industries, from apparel to school supplies.

But, what about toys?

For the toy industry, August in particular is a bit of drag. Though this is a period when many new toys are being introduced to the market, sales reach a low point. In terms of absolute dollar sales for the toy industry, August tends to be among the bottom two or three performing months of the year, right there with January. While the product changeover on store shelves may factor into this, I think the primary reason is quite obvious: back-to-school expenses. For many families, back-to-school can suck up every ounce of a family’s disposable income, and then some. For that moment in time, a pair of shoes, a new outfit, and school supplies become the more important decisions.

Does this mean the toy industry should walk away? Absolutely not. There is a place for the toy industry during this period, and it can support the back-to-school initiative.

Educational toys—particularly flashcards—sell more than usual during the back-to-school season. Digging a little deeper, these educational toys are slightly overdeveloped for preschool children and lower income households (<$50K/year) on a bi-annualized basis. My theory is that lower income families of preschoolers are looking for ways to educate their children through inexpensive toys, perhaps because their communities don’t offer free preschool as an option.

Can the toy industry do more, particularly during back-to-school, by creating more fun and educational preschool toys? Can retailers, particularly those in lower income neighborhoods, carry more inexpensive, high quality preschool education toys? There are back-to-school related opportunities for the toy industry that just might benefit everyone.

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