Where Consumers Shop for Toys and Games

January 2023

While e-commerce has continued to gain share in recent years, helped by lockdowns and enforced closures of store-based retail outlets during the pandemic, traditional toys and games stores do still have a role to play, particularly for traditional toys and games, given they can offer children an experience that is still difficult to replicate online, although, in video games, physical stores are increasingly fighting a losing battle, particularly with the immense popularity of mobile gaming.

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This report comes in PPT.

Key Findings

Toys go green

With sustainability increasingly close to many consumers’ hearts, plastic reduction will be an important step for toy companies in making the world a “greener” place, in both the toys themselves as well as their packaging. In video games, it could be argued that buyers of digital games, over physical games, are already doing their bit for the environment in terms of reducing usage of raw materials as well as doing away with the need for any transportation.

Specialist retailers still have a role to play

Specialist traditional toys and games stores remain an important distribution channel for the toys and games industry. While struggling in video games, these store-based specialist outlets can offer children, and even kidults, a special place to shop as well as experience products, both new and old, as toy stores can offer an experience that cannot easily be replicated online.

Toys to screen

Toy companies are digitalising their assets onto the big screen, as more consumers become more digitally entrenched. The popularity of these films can have a potentially huge impact on generating stronger sales of physical toys.

AR/VR headsets most dynamic

The metaverse and virtual gaming offer potential for AR/VR headsets, which were, by some way, the most dynamic category, with further strong growth expected over the forecast period. However, companies might be well advised to view the metaverse as another platform to engage with customers and build brand awareness and loyalty, rather than just seeing it purely as a money-making opportunity.

E-commerce will continue gaining share

E-commerce is now the dominant distribution channel for toys and games globally, helped by the major share it holds in the bigger video games category. The pandemic and its various restrictions, including lockdowns and non-essential retail store closures, helped further drive the move towards online sales, with even store-based retailers recognising they would need to pursue an omnichannel approach in their business operations in the future.

Scope
Key findings
Global growth rate remains elevated
Traditional toys and games returns to positive growth in real value terms
US remains ahead of South Korea with the highest per capita spend on toys and games
Pandemic boosts demand in construction, the most popular toy category
New-generation game consoles help drive demand
Supply chain constraints and inflation impacting the toy industry
Non-store retailing now accounts for almost two thirds of retail value sales
Store-based retailing still dominates sales in Middle East and Africa
E-commerce expected to continue eating into physical stores’ sales globally
Ongoing switch from physical to digital gaming
Modern grocery retailers generate the most store-based sales in toys and games
Specialist retailers losing share, but still have a role to play
Traditional toys and games stores channel records strong sales growth in 2021
Tru Kids ensures that Toys “R” Us remains at the head of the rankings
Toy stores offer an experience for children that cannot necessarily be replicated online
Reliance Retail putting its faith in its Hamleys and Rowan store network
Private label only really operates in traditional toys and games
Western Europe and Asia Pacific account for the bulk of private label sales
E-commerce dominates video games sales
E-commerce continues gaining share in toys and games
E-commerce growth slows in 2021 for traditional products after 2020’s demand spike
Livestreaming and virtual reality will help drive digitalisation of toys and games
Latin America and Eastern Europe record the strongest CAGRs
Amazon continues to dominate global online sales
Dolls and accessories sales to more than double in China over 2021-2026
Sustainability will be increasingly to the fore in the coming years
AR/VR headsets sales rise as interest in the metaverse intensifies
No kidding – adults buying toys and games represent a growing consumer segment
Key takeaways

Toys and Games

This is the aggregation of traditional toys and games and video games.

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