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Kids, toys and money: the spending power reshaping the toy market
The toy industry's problem was never that kids stopped wanting things. It was that the number of things competing for a child's own money grew faster than the toy aisle did.
A note on this data. The figures below come from the Kids Insights Global Toys & Games Report 2020, based on surveys of more than 105,000 children a year across the UK, US, France, Germany, Italy, Spain and India. The category has moved on considerably since. For current figures, talk to us.
Kids control real money
In the UK, 3 to 18 year olds received £248 million a month to spend as they wished, roughly £2.9 billion a year. That is not pocket change in aggregate, and it was increasingly held in a form kids could actually deploy: pre-paid debit products such as GoHenry put spending power directly in their hands rather than requiring a parent at the till.
£2.9billionA year, controlled directly by UK 3 to 18 year oldsKids Insights, UK, 2020. Equivalent to £248m a month.
Financial empowerment at that age changes who the customer is. A child with a card is a shopper, not just an influencer on someone else's purchase.
Toys are not the only option
The more consequential number is what that money competed for. UK kids spent £581 million on in-experience purchases, apps and in-game content, against £969 million on toys and games.
£581millionSpent on in-app and in-game purchases, against £969 million on toys and gamesKids Insights, UK, 2020.
Put another way, for every pound going into the toy category, a further sixty pence went to something a child could buy instantly, on a device already in their hand, with no trip and no packaging. That is the competitive set, and it is why a toy proposition has to earn its place rather than assume it.
Board games hold their ground
Against that backdrop, the resilience of the oldest format in the category is worth noting. In the UK, over a third of 6 to 9s played classic board games such as Monopoly, Guess Who and Jenga at least monthly. Tweens who named board games as a hobby reported feeling frequently happy 51% more often than average.
The lesson is not nostalgia. It is that shared, offline, face-to-face play does something a screen does not, and that this is measurable.
Licensing follows the screen
Demand for licensed properties kept growing, but the source of those properties shifted. Gaming and YouTube supplied the strongest performers of the period: Minecraft, Fortnite, Sonic, Ryan's World and JoJo Siwa.
Advertising spend followed the same logic. Annual spend on marketing to children was forecast to reach $4.6 billion by 2021, with the largest gains going to kidtech-compliant content, YouTube, and video on demand.
Many of us will remember the tried and trusted formula for this industry: a number of TVRs, key retail stockists on board, and on occasion a licensed property. But this generation of children are like no other, constantly connected, with very different attitudes, behaviours and consumption traits than previous generations.Nick Richardson, Founder, The Insights Family
Where the categories stand
Action figures were carried by film, television and Fortnite, but faced sharper competition as boys moved spend towards video gaming. Dolls were the first category to respond seriously to demands for inclusivity and diversity, and did so ahead of the rest of the market.
Arts and crafts remained one of the least licensed categories in the toy aisle, which made LEGO's DOTS launch worth watching as a test of whether licensing could work there at all. In pocket-money toys, the driver was simply that kids had more of their own money to spend.
I have not witnessed such speed of change in twelve years in this industry. It is increasingly embracing sustainability and inclusivity, while AR and AI push the limits on innovation, driven largely by ever-rising smartphone and tablet penetration among children.Utku Tansel, Head of Global Industry Reports, The Insights Family
The takeaway
The pattern underneath all of this is that a toy no longer competes only with other toys. It competes with an in-app purchase, a game skin and a subscription, all available instantly from money the child controls directly. The categories that held their position were the ones offering something the screen could not: shared play, physical making, or a property the child was already invested in elsewhere.
Figures from the Kids Insights Global Toys & Games Report 2020, based on surveys of more than 105,000 children a year across the UK, US, France, Germany, Italy, Spain and India.
