By Pete Andrews
*This piece has been adapted from an article written for the fall 2018 issue of the Toy Book.
This coming holiday season will be the first without Toys R Us. Though Walmart and Target are each holding their own in the toy department, there’s little debate that Amazon will capture most of the shuttered retailer’s market share. In 2017, Amazon was responsible for 1 out of every 6 dollars spent on toys in the US and they’ve made no secret of their ambition to target the void now left by the former “world’s biggest toy store”, even going so far as to announce the release of a print catalog in the spirit of the annual Big Book from Toys R Us.
So when we’re looking ahead to the 2018 holiday season, we can be confident that Amazon will be at the heart of it. Based on last year’s sales and current YTD trends, here is what we expect to see the most of over the holidays:
The toy market is unique in that it’s driven by novelty and by that unquantifiable feature known as fun. There is no way to accurately measure a toy’s raw “fun-ness” (though there are many theories) until it’s out in the world. And designers are constantly competing against the inevitability of boredom, as novelty is a key ingredient in entertainment. While many other industries such as electronics and appliances have the luxury of moving forward in a linear fashion – product capabilities steadily advance and grow more affordable over time – toymakers constantly have to find new directions in which to innovate.
This makes it impossible to know for sure what the next big hit will be – nobody expected L.O.L. Surprise! Dolls to be so huge last year – but we can at least follow search and sales trends to their logical conclusions. And this has led us to a few trends that we’d be willing to bet on.
We predict that the 2018 holiday season on Amazon.com will be all about Games. In the Toy product group, the Games category is made up of mostly “analog” games such as board and card games, puzzles, and other group games like Jenga. The growth in popularity of this category in recent years is a reaction to our increasingly digitized lifestyles: consumer demand for offline social activities is on the rise.
Responding to this demand, there has been a glut of unique and creative games that have grown drastically in popularity, such as last year’s Exploding Kittens card game. In the 2017 holiday season, Games was the largest category in sales and the second highest growing category after Dolls/Girls Toys (driven by the trendy L.O.L. Surprise!). Because board and card games are group activities, their popularity soars especially high during the holidays, a time for families and friends to get together and celebrate.
The board games subcategory witnessed the highest growth, in part due to its ability to appeal to all age groups. Connect 4, a relatively simple and low-cost board game, is easy for anyone to set up and play. Candyland is similarly fun for the whole family, but is more complex and may require an adult to set up. The more strategic Catan (and its expansions) is very popular among more serious board games players, while still being accessible enough for most people to participate (marketed to ages 10+).
The card games subcategory grew nearly as rapidly as board games during the 2017 holidays. This growth was driven primarily by new, digitally-native card game brands like Cards Against Humanity and Exploding Kittens. The former, a comedic card game for adults, has managed to sustain very strong popularity since its release in 2011. The latter, which is family friendly, was released last year to great success and is likely to carry that success into the 2018 holiday season with the help of new expansions (Imploding Kittens and Streaking Kittens).
Not Just for Kids
Both board and card games illustrate one of the biggest trends of today: toys are not just for kids anymore. Not only are adults buying all the toys (which has always been the case), but now they’re buying them as often for themselves as for their kids. Both of the leading Toy categories, Games and Construction, have become so successful in part by appealing across demographics. This holiday season, toymakers who are able to entertain the parents as much as the kids will carry the day.
Take for instance the Construction category, which reached a plateau in 2017 after several years of accelerated growth. Much of this growth was sustained by the entrants of more technologically-inclined robotic toys, one of the top contender categories for where the next runaway hit may come from. LEGO is still the big success in this space: after decades in the business, LEGO is as relevant as ever with their Boost line of robotic toys. The brand’s wide range of products are geared to every possible age group, and their complexity and flexible make them a great parent-child activity.
In both the Games and Construction categories, the popularity of new, innovative toys has in turn driven a resurgence of interest in classic, child-friendly games – many enthusiasts are now parents themselves and want to share their passion for games with their kids. Catan and other adult-oriented board games has inspired sales of classics like Candyland and Connect 4; Cards Against Humanity has driven interest in UNO; and LEGO’s increasingly complex innovations feed back into sales of their classic block sets.
Still, there is something to be said for the classics – LEGO and Hasbro aren’t alone in being reliable toy brands we can count on year after year. In the Dolls/Girls Toys category, which was the biggest grower in 2017 thanks to the runaway hit, L.O.L. Surprise!, Barbie continues to be a major player. The trendy L.O.L. Surprise! is likely to maintain some momentum in 2018 – mystery packs and collectibles are still going strong – but Barbie has more proven staying power and is benefiting from the popularity of the new Dreamtopia TV series. Similarlly, Play Doh continues to be a reliable seller in Arts & Crafts, an otherwise stagnant category.
It may come at the end of the calendar year, but the holiday season is the start of a new year for toymakers. More than just a culmination of trends that grew and evolved during the previous 11 months, the holidays make or break the industry trends that will go on to shape the coming year. This means that toymakers need to be very thoughtful when strategizing for the holidays. With Amazon poised to fill the Toys R Us void, it’s going to play the biggest role this holiday season. So, while we can’t know for sure where the next hit toy will come from, we can be confident that Amazon will have the biggest part to play.
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