Toy brands have a good reason to be optimistic – the industry is booming. A recent report from The NPD Group found that U.S. toy sales increased by 16% in 2020 to reach $25.1 billion. Much of this growth was fueled by changing consumer behavior associated with widespread lockdowns and school closures, but it doesn’t appear to be slowing down. Total U.S. toy sales grew by 27% in the first four months of 2021, a $1.5 billion increase from the same period last year.
Even more revealing is how customers are shopping for toys. In the first three quarters of 2020, e-commerce gained 10 share points, leading to a 75% year-over-year growth in overall online toy sales. This is good news for toy brands that have embraced e-commerce, but it also underscores the growing competition on marketplaces like Amazon. With toy sales expected to reach $357 billion by 2023, brands need to pay close attention to how the industry is evolving.
Understanding New Challenges for Toy Brands
- Greater Variety of Options – Over two-thirds of toy shoppers now make their purchases online, according to a Kantar custom toy shopper study. E-commerce offers customers more selection than brick-and-mortar stores, which means product discoverability is more important than ever.
- Adapting to Shifting Customer Behaviors – As toy shoppers increasingly move to online marketplaces, adults are less likely to make impulse buys driven by child requests. Brands need to find new ways to engage shoppers, such as driving purchase intent through telling your brand and product story.
- Thinking Beyond the Holiday Season – Customers purchase toys throughout the entire year, not just during the holidays. Brands need to keep their products top of mind when year-round gift-giving opportunities arise.
Insights for Marketing and Advertising Toys and Games
- 44% of toy shoppers say they research their purchase on Amazon, regardless of where they make their purchase (Kantar).
- A toy purchase on Amazon is three times more likely to be a gift than the average Amazon purchase (Kantar).
- 97% of global e-commerce sessions end without a purchase. It’s essential to treat each touchpoint as an opportunity to build a relationship rather than drive an immediate sale (Statista).
- A recent Amazon Advertising analysis found that brands who combined display advertising with sponsored ads for their toy advertising achieved a 33% uplift in conversion, compared to toy brands that only ran sponsored ads.
Three Reasons Why Toy Brands Need to Promote Their Brand Year-Round
As mentioned, the holiday shopping season is critical to your toy brand’s success. Almost 40% of holiday shoppers said they planned to give toys as gifts in 2020, with 32% purchasing at least one toy during Black Friday and Cyber Monday. By all forecasts, this trend will continue in 2021. However, your marketing strategy should not be limited to the holiday shopping season. Here are three reasons why it’s also important to communicate with toy shoppers throughout the year:
- Toy Shoppers Need Time to Learn About Your Brand
According to The Toy Association, today’s toy shoppers often consider more than just cost and “cool factor” when deciding what to buy. Many want to understand what the brand stands for, its commitment to sustainability, and whether its toys are eco-friendly. Considering these additional factors, toy shoppers need time to learn about your brand if you want to be top of mind when it’s time to buy holiday gifts.
- Toys Are a Favorite Gift for Many Occasions
While the holiday season is a key time for toy shopping, it’s not the only time people buy toys. Gift-giving happens year-round. A recent survey of Amazon toy shoppers found that 72% of toy purchases were for birthday gifts or everyday treats. Toy shoppers also said that they like to commemorate certain life events with a new toy, such as moving to a new home or starting a new school year.
- Toys Aren’t Just for Kids
Adults are buying toys for themselves, and toy brands are noticing. Movie franchise fans are purchasing the latest licensed toys to add to their collections. Friends are buying board games for virtual game nights. Adults are turning to jigsaw puzzles and building sets for stress relief. Almost 20% of frequent toy shoppers on Amazon say they buy toys for themselves. Those purchases are happening throughout the year.
Take Your Toy Brand to the Next Level of Success
As the most popular e-commerce marketplace in the world, Amazon is a powerful sales channel for toy brands. Unfortunately, many never realize their true sales potential on the platform. After launching their storefront, toy brands often find themselves stuck in a sales plateau. Channel Key’s free Growth & Opportunity Report is designed to identify your brand’s quickest route to greater sales and profitability on Amazon. This customized, in-depth analysis provides an expert second opinion to help you understand the following actionable insights:
- Share of Voice
Discover how your current share of voice on Amazon compares to your competitors, along with specific opportunities to increase your brand awareness.
- Category Market Share
Learn your brand’s market share by product and category, and your competitors’ market share to identify realistic growth targets.
- Growth Opportunity
Identify specific opportunities to help your brand grow its customer base, increase profitability, and ultimately generate more revenue.
- Margin Analysis
Examine your current profitability in relevant categories to discover opportunities for improvement.
- Advertising Spend Forecast
Receive a detailed advertising spend forecast to help you understand what it will take to compete in your categories.
- Account Audit
Identify risks or vulnerabilities in your account health and ensure overall compliance with Amazon’s terms, policies, and applicable laws.
- Content Audit
Review your product listings to find opportunities for improvement that can have an immediate impact on organic traffic and conversions.
CHANNEL KEY TAKEAWAY
As an Acknowledged Amazon Partner and Global Advertising Partner Development (GAPD) Member, Channel Key currently manages more than $60 million in GMV each year. Many of our clients have grown from a four-figure Amazon business to nine figures. On a platform with more than 200 million monthly shoppers, your brand has the same growth opportunity. By understanding important marketplace insights, your brand will have a clear, defined, and actionable path to the next level of Amazon sales. Click below to get started with your free Growth & Opportunity Report.
ABOUT CHANNEL KEY
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