One industry that proved itself immune to the COVID-19 virus is the toy sector, which saw a staggering 16 per cent increase in revenue in 2020.
According to a report by The NPD Group, US toy sales generated $25.1 billion in 2020, an increase of $3.5 billion. One interesting data point is that the number of unit sales for the year were flat while the average selling price increased by 16%. In other words, people didn’t buy more toys, but they bought more expensive toys.
NPD analysts say much of the growth in 2020 was directly correlated to the COVID-19 pandemic and the way consumers reacted widespread lockdowns, social distancing and school closures. As well, because most consumers were spending much less money on other types of entertainment or products, they had more disposable income that could be diverted to toys. NPD says another factor was the distribution of federal stimulus checks, without which a sizable percentage of the American population would not have purchased many non-essential products.
NPD says the data shows very clearly the impact of COVID-19 lockdowns, because while toy sales through mid-March 2020 were flat versus 2019, the introduction of widespread lockdown measures in April led to an abrupt and sizable increase in sales. “This was further amplified by the distribution of stimulus checks beginning in April, resulting in the strongest month of growth for the year in May (+38%),” the report stats.
The growth in toy sales peaked again in October with an increase of 33% when the holiday season kicked off with Amazon Prime Day along with other retailer deals the same week.
The toy industry in the UK similarly followed global trends, which generally have seen a significant boost in sales and revenue despite—or perhaps because of—the COVID-19 pandemic. Sales were particularly hot during the first lockdown during the spring in Britain, which saw an astounding 22 per cent boost in spending for the sector. Sales in the UK fell off from that early high, but remained strong overall with total sales revenue ringing in at $4.5 billion (3.3 billion pounds), which allowed the country to maintain its position as the largest market for toys in Europe, and the fourth largest in the world.
This revenue boost for the toy sector occurred even as retailers wrestled with an extremely difficult environment for sales, due to rotating lockdowns throughout the year, and manufacturers dealt with significant supply chain issues in the early months of the year. However, the main driver of revenue appeared to be the powerful need to keep children and adults alike entertained in a year when other types of diversions, such as movie theaters, concerts, restaurants, sporting events, and travel were off the table for much of the population.
“2020 was an extremely challenging year for retail as a whole, and toy retailers of all sizes had to adapt and innovate in this difficult environment in order to ensure consumers could still obtain the products they require,” said Roland Earl, Director General at the British Toy & Hobby Association. “The end of year statistics reflect the role that toys and games played in bringing enjoyment and assisting families and individuals to navigate the difficulties of repeated closures and lockdowns. Despite varying functions, objectives and age suitability, all toys are ultimately designed with one overarching goal—to bring fun, enjoyment and play value to the recipient and never has this been more important.”
One major theme in 2020 was the growth of online shopping, the NPD says, and this was true in Europe and North America. Rotating closures or restrictions of retail outlets caused some shoppers to be hesitant about shopping in brick and mortar stores, while others felt uncertain that they’d be able to reliably access certain products. This led to a surge in online toy sales, and online shopping in general. In the first three quarters of 2020, the online channel gained 10 share points from the 23% share in 2019, leading to 75% growth in overall online toy sales year over year, according to the NPD’s Consumer Tracking Service.
While purely online retailers saw a huge gain, brick-and-mortar retailers who adopted online shopping, in-store pickup and curbside pickup also outperformed stores that did not adapt.
Also reflecting the effect of the pandemic was the growth in sales that either provided outdoor entertainment or exercise, or those with high replay value. The NPD says the top dollar growth subsegments in 2020 were sports toys, which includes skates, skateboards and scooters (+31%), fashion dolls and accessories (+56%), building sets (+26%), games (+29%), and summer seasonal toys (+24%). The top properties of 2020 included L.O.L. Surprise!, Barbie, Star Wars, Pokémon, and Marvel Universe. The top five properties combined accounted for 13% of all toy sales on the year.
While units declined in seven of the 11 supercategories, average selling price increased in every supercategory. The increase in average price was a key driver of the growth in dollar sales and was driven by a shift in product mix to higher-priced categories.
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