If you have kids, there’s likely a closet in your home full of discarded toys. Children change rapidly. As do their playthings. So too does the market that feeds that change. Once upon a time, toys were something a child held. Then they were something a child played on a screen. Then they were things as likely to be collected by adults as loved by a child. Now they are often all these things all at once.
To monitor what’s happening in this dynamic market, we collect point-of-sale information from all major toy retailers. This information, combined with our analysts’ industry perspectives, delivers a comprehensive view of what’s selling and where. We also field more than 12 million consumer surveys a year to help industry leaders understand why consumers shop, where they shop and why they buy what they buy.
NPD's Retail Tracking delivers weekly point-of-sale (POS) tracking information. It’s the only source for competitive, item-level product detail and insight on toy sales trends. This industry resource can help you understand market dynamics, identify opportunities for growth, and partner more closely with retailers. Our POS footprint covers all the major toy retailers to ensure you are working with information that gives a complete view of the marketplace.
Our Consumer Tracking provides in-depth detail straight from consumers, so you can analyze retailer share, measure category and channel performance, explore consumer demographics, and understand purchase dynamics. Over 12 million surveys annually tell us where consumers shop, what they buy, and how much they pay. The service delivers a comprehensive picture of consumer activity across all retail channels. Its information is aligned with our Retail Tracking hierarchy, allowing for high-level market alignment of our toys consumer data. Toy industry leaders use this robust information to uncover opportunities and create products, messaging, and promotions that appeal to their target consumers.
Store-Level Enabled Retail Tracking
Store-Level Enabled Retail Tracking complements our national Retail Tracking Service– it can help you determine whether sales are distribution-driven or whether certain parts of the country are contributing more to national share or driving growth. The velocity measure that is part of Store-Level Enabled Retail Tracking takes into consideration sales volume (Annualized Industry Volume or AIV) rather than considering store count alone, for a more meaningful read on where products are selling and how they are performing.
You have opportunities. You face threats. What you need are smart, quantifiable methods of distinguishing one from the other and maximizing your chances of success. NPD’s Analytic Solutions Group includes a team of senior leaders with extensive experience developing and delivering analytic solutions that address strategic marketing, sales, and planning issues.
We combine NPD POS and consumer information, industry expertise, and custom survey research – then add state-of-the-discipline research techniques and methodologies to explain the "why behind the buy.” Through advanced modeling and analytic services, we offer insight into what will happen in the future, not just what has happened in the past, answering your most pressing business questions:
- What consumer segments should we target and why? How do we know if we’re successful over time?
- Which products are hot? How should we respond?
- What’s the sales potential and ROI for my new / revamped product idea?
- What is the optimal feature combination for my product?
- How do I monitor my performance in my sales territories, distribution areas, etc.?
- Is your promotion strategy attracting new buyers or just moving forward sales you would have gotten anyway?
- How will a competitor’s price drop impact your sales next quarter, and how should you respond?
- Will my product category grow or decline? Why? What does this mean for my market share?
- What’s the competitive landscape and where are my best opportunities (Food)?
- What levers should we pull to increase sales and market share?
- Why are some of our stores performing better than others?
- Why do consumers choose our brand? Our competitors’ brands?
- How effective is our advertising? How can we improve it?
- What products should we develop?
- What products should we sell?
- How can we optimize assortment based on local market dynamics?
- Which people should we target? Why?
- How do we know if we are successful over time?
See how clients have used our analytic solutions to solve their business challenges in our Analytic Solutions Case Study Library.
Toys is excited to be the first practice to combine multiple countries in a single DecisionKey database to allow for multi-country reporting. The additional frequency will allow for single-source multi-country data to maximize the value of our data for our toy clients who mostly operate in a global capacity. Clients can now have a view into 10 countries, ranging from Canada to Australia to France to U.S, in a single database with common currency view for all countries converted into U.S. Dollars and/or Euros. This capability strengthens the NPD position of being the Toy industry currency, allows global investor/public statements to be sourced from a single dataset, allows consistency of views between local countries and global departments, and offers immediate time savings thereby allowing more time to be spent on value-add global analyses.
Toys Tied to Experiences, Family Time, and Healthy Living Propel Industry Growth through the Holiday SeasonU.S. toy sales grew by 6 percent from January through September 2016, according to retail sales data from global information company The NPD Group. NPD expects several trends to drive the toy industry to continued growth through the remainder of 2016, including consumer movement towards experiential purchasing, the popularity of collectibles, the drive toward healthier living, and higher price-points during this holiday season. For the year, NPD estimates toy sales to be up approximately 6.5 percent.
U.S. Toy Industry Mid-Year Sales Grow Over 7 Percent, Tracking Ahead of 2015 Growth Rates, The NPD Group ReportsThe U.S. toy industry grew 7.5 percent in the first half of 2016, outpacing last year’s mid-year and annual growth rates*, according to global information company The NPD Group. NPD estimates that the industry will grow approximately 7 percent, or $1.4 billion, for full-year 2016.
In mid-August Target made headlines after announcing a phase-out of gender-based signage in certain children’s sections of its store. The move came after an Ohio mom called out the retailer on Twitter for gender designation in its toy aisle, noting signage for “Girls’ Building Sets” next to regular “Building Sets”. Target took action after other consumers joined in the dialogue:
“Over the past year, guests have raised important questions about a handful of signs in our stores that offer product suggestions based on gender. In some cases, like apparel, where there are fit and sizing differences, it makes sense. In others, it may not. Historically, guests have told us that sometimes—for example, when shopping for someone they don’t know well—signs that sort by brand, age or gender help them get ideas and find things faster. But we know that shopping preferences and needs change and, as guests have pointed out, in some departments like Toys, Home or Entertainment, suggesting products by gender is unnecessary. We heard you, and we agree. Right now, our teams are working across the store to identify areas where we can phase out gender-based signage to help strike a better balance.”
Target announced it will begin by removing reference to gender in the Bedding and Toys aisles, including the use of pink, blue, yellow or green paper on the back walls of its shelves.
Recently we’ve written about the concept of gender neutrality as it relates to fashion, apparel, and accessories. In response to an emerging segment of consumers in support of gender fluidity, many brands and retailers are blurring the lines and offering apparel that can be worn by anyone, irrespective of gender.
When we consider gender in the context of toys and children’s products, it brings into question that age-old “nature versus nurture” debate. Do girls like dolls in pink dresses because that’s what stores market and sell to them? Do boys like blue trucks because that’s what they’re encouraged to like when they receive them as gifts from Grandpa? Or is there something innate in humans that accounts for the 96 percent of doll purchases gifted to girls and 90 percent of action figure purchases gifted to boys?
Consider the fact that boys once wore pink. In the mid-19th century, pastel pink and blue were added to the formerly all-white baby palette. Around 1918, a department store proclaimed that pink was for boys, and blue for girls—as pink was considered a stronger color, and blue more delicate. In the 1940s, this color assignment was swapped in response to manufacturer and retailer color interpretations. So this blue/boy pink/girl association was happenstance.
We decided to look at how parents feel about this debate today. In an online poll of U.S. adults conducted through The NPD Group's partner CivicScience, we asked respondents to what degree they agreed with the statement “The toy industry perpetuates gender stereotyping and should be marketing every toy to both boys and girls”.
We found 31 percent of respondents strongly disagreed, 28 percent didn’t have an opinion on the issue, and the rest were divided pretty evenly between strongly agree (14 percent), somewhat agree (14 percent), and somewhat disagree (13 percent). So among the general population, most respondents (44 percent) disagreed with the statement, in favor of marketing toys differently to boys and girls.
However, responses to this question differed drastically for particular segments. For example, 36 percent of females either agreed or strongly agreed with the statement, compared to only 18 percent of men. Millennials were even more supportive of gender-neutral toy marketing, with 40 percent in agreement with this statement.
Responses to Question by Segment
There were some other notable correlations in the data. People who think toy companies should practice genderless marketing to kids are 166 percent more likely to be Democrats than Republicans. They’re more likely to support same-sex marriage, be concerned about climate change, and worry about income inequality.
They’re also 136 percent more likely to consume most of their TV content via streaming service, 34 percent more likely to rate price over brand in making a purchase decision, 45 percent more likely to use Facebook daily, and twice as likely to use Instagram daily.
So what does this mean for big box retailers like Target? The proof is in the data. While today most adults may take no issue with gender stereotyping within the toy industry, as Millennials begin to have children of their own and purchase items with kids in mind, retailers would be wise to start adapting their marketing strategies to this segment’s set of evolving wants and needs.
Insights and Opinions from our Analysts and Experts
I had to do a double-take when I saw the data for U.S. toy sales during Thanksgiving week. While I predicted last month that higher-priced items would be a growth driver for the industry this holiday season, I don’t think any of us expected that 85 percent of the industry’s growth during this week would come from price-points over $20. Digging deeper into this price phenomenon, the story – believe it or not – only gets more interesting.
To put these figures into perspective, comparing Thanksgiving week this year to last, we see the gap that existed in higher price-points is now starting to be filled. The $30-39.99 range was underserved last holiday season, while this year it grew at the highest rate over this important week. The strongest dollar growth came from toys priced over $70.
The top two categories driving growth in these higher price-points during Thanksgiving week both fall under the Outdoor & Sports Toys supercategory: Blasters/Foam Shooters & Accessories filled in the hole we saw in the $30-39.99 range last year, and Skates, Skateboards & Scooters drove most of the growth for the over $70 pricing. Looking back to last year, we may recall that the “hoverboard” types of skateboards were very popular until they were banned due to fire issues. With the issue now resolved, we’re seeing explosive growth once again with these items.
What’s driving this trend in higher-priced toys? It begins with the fact that the toy industry experienced growth over the last couple of years. With this growth, I believe both manufacturers and retailers are more open to investing in new ideas and taking risks. Success breeds innovation, which breeds more success and innovation, and the snowball effect continues to roll.
I also believe that retailers this holiday have become more bullish to higher price-points and accept that parents are willing to pay more for the climactic moment on Christmas morning, when their child opens that big gift under the tree.
There’s also a bigger picture trend at play that we’re seeing around the country and across industries. Consumers are building their personal brand on social media, whether through selfies on Instagram, videos on Facebook, and so on. They want to be part of a broader, social community in an individual way. We’re seeing that toys has a role in this development as well; parents and family members seek that big reaction on Christmas morning, to film and photograph and to share on social media for their family and friends to see. They seek that special reaction, and they are willing to pay a high price for it.
Each week throughout the holiday season, NPD publishes its Holiday Shopping Bag 2016 Weekly Report, sharing weekly point-of-sale results for key general merchandise categories including toys, apparel, technology, athletic footwear, and prestige fragrances. Week after week, the story has been positive for the toy industry, and I expect this optimism will continue in the time to come.
This year’s Electronic Entertainment Expo in Los Angeles, the gaming industry’s largest conference, had a new flavor with the massive presence of VR (Virtual Reality) hardware. There were many players demonstrating this exciting new way to experience gaming, with a big presence from Sony Playstation VR which will be available in October for $399. Oculus also had a large presence with gamers lining up for more than an hour to experience the variety of games being demonstrated. The Oculus Rift although extremely fun, will not be affordable to everyone at the $599 price point. Other VR options include the Razer HDKR at $399 and the Nyko VR Guardian at $99. After trying out several different VR experiences at the show, I can say I am a big fan and can’t wait to play more.
Speaking of hardware, Microsoft announced the Xbox One S, available in August, which is a slimmer version of the Xbox One but with double the hard drive at 2T, 4k support for Blu-ray/compatible media and can upscale games to a 4K output. So if you have a 4K TV, want more space to store your games or DLC, or simply like the new look of the console and new gamepad, this is the console for you for $399. Microsoft also announced their next gen Xbox console, Project Scorpio, set to launch for Holiday 2017, which will play VR games as well as play games in 4K resolution. On the Microsoft games side, one of the standouts for me was Gears of War 4 and Forza Horizon 3, I myself a long-time fan of racing games.
Sony, who did not speak about their next gen console at E3, focused on Playstation VR and new 1st Party and 3rd Party games such a God of War, Days Gone and an exciting new Spiderman game from Insomniac Games. My favourites for the Playstation VR included a spine-tingling demo of Resident Evil 7, survival game Far Point set in an alien world and Star Wars Battlefront X-Wing which is exclusive to VR and puts you right in an X-Wing cockpit.
Nintendo focused much of their entire E3 presence on one of their long standing key franchises, Legend of Zelda: Breath of the Wild, which is the first new Zelda game in two years. The breath-taking open world game was brought to life at Nintendo’s booth with 140 demo stations where gamers waited sometimes up to two hours in line to try for themselves. Like Sony, Nintendo did not talk about their new console, Nintendo NX which is said to be launching in March 2017, instead the focus was on new games and fan favourites on the Nintendo 3DS such as Pokemon for its 20th anniversary and Yokai Watch, which also has a tie-in with toy company Hasbro.
For the big game publishers, EA and Activision did not have their traditional large booth presence on the floor this year, so the West Hall felt a bit more lackluster than the usual hustle and bustle I have seen in year’s past. However, the games that were on the show floor were impressive. Ubisoft, for example, revealed a new game franchise called Steep. For anyone who enjoys extreme winter sports such as base jumping and paraskiing, this is the game for you. Ubisoft also showed off an impressive demo for Watch Dogs 2 and For Honor, the Viking 3rd person brawler and for VR, an exciting new game Star Trek Bridge Crew where you can play with friends and take command of the bridge. One other noteable takeaway from Ubisoft was the announcement to take Assassin’s Creed to the big screen, coming to theatres this December featuring the popular Michael Fassbender.
Take 2 featured a beautifully created New Orleans style mansion including theatre to show off the intense new Mafia III as well as the new games from 2K Sports NBA 2K17 and WWE 2K17. Let’s also not forget about Warner Bros who had an action packed showing featuring new Lego Dimensions expansion packs, Lego Worlds (think Minecraft meets Lego) and on the superhero side, the much anticipated Lego Star Wars: The Force Awakens, the new Injustice 2 and for the VR experience Batman: Arkham VR.
And although Activision was not on the floor, they did hold a press conference to highlight the new Call of Duty Infinite Warfare (think Call of Duty in space) and Skylanders Imaginators where you can create and customize your own characters. EA also hosted a separate conference to reveal new games for Star Wars, Titanfall 2 and FIFA 17 which features for the first time in the franchise a single person story mode.
Overall, even though this year’s E3 had a different feel to year’s past, it is clear that the industry is continuing to innovate and push forward into new frontiers. The potential of the VR category is absolutely massive and only getting started, with a new round of next generation consoles approaching in 2017, and the sheer volume of triple A games being developed for this generation and the new generation to come, I continue to be amazed and predict nothing but positive growth for the category in 2016 and beyond.
Last month The NPD Group issued a press release focusing on the overall growth of the Canadian toy market in the first quarter of 2016. The release stated that the Canadian toy industry was relatively flat in Q1, posting an increase of just 1 per cent. However, the release also went out to suggest that the so-called “Target Effect” highly skewed growth metrics for Q1. For those of you who are not as familiar with the Canadian market, in 2015 Target announced that it would be closing all of its 133 Canadian stores and exiting the market. After the announcement the company swiftly implemented a number of markdown sales to reduce inventory and curb losses. The clearance sales led to a spike in toy sales, which thereby highly inflated growth in the Canadian toy industry. In fact, as a result of Target’s strategy, toy sales skyrocketed 23 per cent in Q1 of 2015 – hence the “Target Effect”.
Why does this matter?
Because when the inflated growth from Q1 of 2015 is removed the data suggests that the Canadian toy industry was in fact not flat, but actually grew by approximately 7 per cent in Q1 of 2016. This is quite the substantial difference. And while the “Target Effect” is a rare occurrence, it goes to show how easily data can be manipulated and misunderstood. For those of you who take great care in designing programs and strategies based on analytical data, it is also a good reminder to ensure you thoroughly understand the numbers that form the base of your decision making. At NPD, we work diligently to fully understand the story “behind” the numbers; to fully appreciate not only what ostensibly seems to be the case on the surface, but to understand the often overlooked nuances that can mean the difference between success and failure to your business.
The good news is that you are NOT alone. NPD has a number of industry experts who are able to guide you through the data the matters most to your business. So if you are unsure of how your data analysis is stacking up, simply reach out – we’re here to help!
After the record-setting success of Furby, the robotic pet that communicated and ate with the help of an app, sales of connected toys in Europe have slumped, down 18% year-on-year in 2015.
Obviously, a phenomenal success like Furby, which topped European toy markets in 2013 and 2014, sets up difficult year-on-year comparisons. But Furby was also successful in the U.S. and Canada, and in those markets, connected toys were up 82% in 2015.
So why isn’t Europe buying connected toys?
Price is possibly part of the answer as connected toys tend to be more expensive. On the other hand, high-end toys (€100 or higher) are a growth segment, so price doesn’t entirely explain it.
Another reason may be that connected toys are not widely stocked at mainstream toy stores in Europe. This might be linked to retailers being cautious in reaction to concerns from some consumer groups about data privacy and from we parents worried about too much screen-time for our kids. However, since internet sales of toys continue to soar in Europe, determined buyers can find what they want online. Perhaps, there simply hasn’t been an overarching popular concept post-Furby, and European consumers haven’t been wowed by a connected toy since.
But they will be; and most likely soon.
Whether we like it or not, toy trends often spread from the U.S. to Europe, and in the U.S., the connected toy segment is booming, thanks in part to toys such as Meccanoids from Spin Master, Sphero’s BB8, and Anki Overdrive. And in looking at the aisles of the New York toy fair in February, there are many more to come.
In other words, the important question isn’t if there will be other connected hits in Europe, but rather what they will be, when they will erupt, and – of course – which retailers will be smart enough to stock them first.
For Canadian families, March Break is one of the most anticipated times of the year. As the frigid winter days slowly come to an end and the clocks “spring forward”, students and parents alike begin to look forward to a week of rest, relaxation, and play.
That said, perhaps it is somewhat unsurprising that – aside from the holiday season – March break is one of the most lucrative times of year for the Canadian toy industry. In 2015, there was an 18 per cent lift in sales the week of March Break compared to the week prior. With this year’s March Break in full swing, we can once again expect a similar surge in toy sales as parents make the annual pilgrimage to toy stores in an attempt to pick up items that will help make the week more enjoyable for kids of all ages.
The top selling toy categories during March Break in 2015 were Building Sets, Sport Toys, Preschool Toys, Games and Arts/Crafts. Furthermore, the most popular brands and licenses were Disney Frozen, Star Wars, Barbie, Minecraft and Nerf. The most popular price points were $20 and under, suggesting that parents do not invest as heavily in toys during March Break as they do for Birthdays, Christmas or other occasions.
This year the unseasonably warm weather is also expected to lead to an increase in sales of Outdoor Toys, such as Little Tikes outdoor playgrounds, Scooters/bikes, and Sports Toys. That said, new toys are often the most purchased during March Break. Some of the newest toys to hit the shelves this year are:
- Building Sets: Lego Ninjago, Lego Nexo Knights, new Star Wars building sets: Rey’s Speeder, Kylo Ren’s Command Shuttle
- Dolls: Ever After High Dragon Games Dolls, Monster High Great Scarrier Reef, new Disney Descendents, Shopkins Series 4
- Games: Minecraft Card Game, Spot It Shopkins Card Game, Star Wars Perplexus, Star Wars Bop It R2D2 Game, Pie Face Game, NHL 2015-16 Series Tin
- Action Figures: Star Wars The Force Awakens, DC Comics Superman vs Batman
- Crafts: Qixels, Bunchems, PlayDoh
- Outdoor: Laugh & Learn Smart Stages Scooter, Razor E100 Electric Scooter, Nerf Rival, Little Tikes Jr Jump N’ Slide
For parents looking to keep their kids occupied during the March Break holiday, there are also quite a few events going on at key toy retailers. Interested parents can check out the following links for more details:
Chapters Indigo: https://www.chapters.indigo.ca/en-ca/march-break-2015/events/
No matter what your family ends up doing this March Break, be sure to enjoy the time spent together. As is often the case with long anticipated holidays, they tend to go-by far too quickly!
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