NPD Group data shows toy makers enjoy strong business from traditional ‘analogue’ play patterns of building and collecting

Less than 1% of toy sales currently belong to the web-connected toys category

London, September 27th 2016 – Figures for the British toy market released by global information company The NPD Group show that time-honoured play patterns of building and collecting are enjoying strong growth.  Since 2010, the building sets category has put in an extraordinary performance, recording value growth of over 121%. This means it is growing nearly six times faster than the rest of the market.  Collecting is still big business in the toy market too. In the 12 months to August 2016, value sales of collectable cards, stickers, figurines and beanies have increased by 34%.  The business performance of these ‘analogue’ toys contrast with products exploiting digital capabilities. Less than 1% of British toy sales currently belong to the web-connected toys category where they interact with an app.

Here are key insights into the British toy market using figures released today by The NPD Group.

Britain: A nation of young builders
The popularity of building sets has been driven by innovation from manufacturers like LEGO.  The company has built strong ‘stories’ for kids around key brands. It is developing animated cartoons featuring characters from these brands and regularly uploads short movies onto YouTube.  These initiatives and the LEGO partnership with Disney and Lucasfilm have prompted smaller manufacturers to develop building concepts too.

That British eccentricity – collecting
Young British consumers have an unquenchable appetite for collecting.  As an illustration of how big the collecting trend is, this translates into each child in Britain aged between five and 10 having received 11 collectable toys in some shape or form in the 12 months to August 2016, a big increase from the eight toys they would have received in the previous year.

App toys account for less than 1% of toy sales
NPD Group data shows that apps have not yet made the impact on toys many expected.  While more and more web-connected products are coming to the British toy market, this is still not a mainstream trend. The top toy item currently that works via an app is the Star Wars BB-8™ app-enabled droid™ from Sphero.

Frederique Tutt, Global Toy Industry Analyst The NPD Group, said: “Everywhere we look, anyone above the age of 10 is glued to a screen.  Depending on their age, they could be playing Pokémon Go or Candy Crush, updating Facebook, looking for directions on Google Maps or booking a meal with friends on a restaurant app. So in an era when the appeal of anything digital is racing ahead, the strength in the toy world of traditional building sets as well as collectable cards, stickers, figurines and soft toys is a welcome surprise. Just as some adults still enjoy the analogue habits of reading printed newspapers and books – and some are even rediscovering vinyl – there is a strong analogue flavour to the toys that children enjoy most.”

Will 2016 be a record year for British toy sales?
The British toy market is growing strongly. Toy sales in Great Britain increased by over 26% between YE June 2008 and YE June 2016. Toy sales in Great Britain – the largest European toy market – could reach a record £3.3 billion mark by the end of 2016, 5% ahead of 2015, if the rate of growth recorded since the beginning of the year is sustained. 

Click and play
Digital of course plays a huge role when it comes to buying. As is the case in many other consumer categories, online shopping is transforming the way consumers buy toys. For YE December 2010, online sales represented just over one-fifth of toy sales in £ sterling but as of the year to date (YTD) June 2016, online shopping accounts for one-third of toy sales in Britain. This is the highest percentage in the top five European markets (France, Germany, Italy, Spain and UK).

Who pays? Mum or dad?
Mums are traditionally in charge when it comes to buying toys and account for 23% of total spend. But dads have become much more involved and, according to data for the first six months of 2016, are now the source of 17% of total toy spend, more than grandfathers and grandmothers combined (15%). NPD notes also that the older the child the more the dads get involved. In fact, for kids aged 10+, dads spent more than mums on toys in the first six months of 2016.

Children know what toys they want – and ‘top of mind’ toys become top sellers
Requests account for almost half the money spent on toys in the UK for the first half of 2016 – the highest ever. As gift-givers, parents are most in touch with their kids and almost 60% of what they spent in the first half of 2016 was the result of direct requests; this compares to only 45% just five years ago. In contrast, grandparents buy toys ‘blind’ with just over a quarter of what they spend resulting from a child’s specific request. The fact is that ‘requests’ represent some 82% of British toy market growth since 2010, so there’s a clear lesson for manufacturers and retailers here with the current data clearly suggesting that exposure for a toy product will make a difference. If a toy is top of mind, it is more likely to become a top seller.

Brands have mastered the art of storytelling
Toy brands represented 31% of the value of sales in 2010 but now account for 43% of spend. Some brands might be more expensive than private label or generic products but consumers recognize their appeal, associating them with quality and longevity. Manufacturers have worked hard to achieve this strong position for their brands by creating rich storylines, often using social media channels such as YouTube to build awareness and appeal.

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