Where Consumers Shop for Toys and Games

January 2022

While the rapid growth in e-commerce encouraged by the pandemic is expected to slow down, shopping and brand engagement on digital platforms will continue to gain traction in toys and games. To remain competitive and regain lost footing, traditional toys and games specialist retailers are tapping more into experiential retail, particularly in China. The report discusses channel shifts in toys and games, highlighting the dynamic between store and non-store retail growth and strategies.

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Key findings

Pandemic-driven spike in online sales of toys and games, although signs of deceleration in pace of growth post-2020

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In 2020, consumers trapped at home due to the COVID-19 pandemic increasingly turned to online platforms for their shopping and entertainment needs, resulting in a significant spike in global toys and games e-commerce sales for both traditional toys and games, and videogames. While the share of e-commerce within toys and games sales continues to grow post-2020, the overall pace of growth shows signs of deceleration, as many consumers return to physical stores.

The going is tough for traditional toys and games stores

The traditional toys and games stores channel, which was already facing an increasingly hostile competitive environment prior to the pandemic, recorded a sales decline, especially small independents with a weak digital presence and logistics, as the pandemic accelerated sales migration to both e-commerce and store-based retailing generalists.

Traditional toys and games stores embrace experiential retail to drive foot traffic and sales

To boost foot traffic and stem sales erosion, traditional toys and games stores are embracing experiential retail, offering unique experiences to consumers, while also linking physical and digital worlds. This trend is particularly evident in China – a focus of expansion plans for a number of leading global specialist retailers.

Embracing omnichannel leads to gains in online sales for many legacy retailers

The COVID-19 pandemic forced legacy retailers to get serious about their omnichannel strategies. The resulting expansion of click-and-collect and delivery services over the course of 2020 and 2021 has resulted in many legacy retailers recording substantial increases in their digital sales of toys and games. Future developments in omnichannel strategies and retail innovation are also expected to see the use of technologies like AR and VR, which are already used by many young consumers for entertainment and shopping.

Introduction

Scope
Key findings

Industry Snapshot

Pandemic-driven surge in toys and games expected to decelerate
Video games continue to account for the lion’s share of growth

Channel Shifts

The pandemic precipitates a shift towards e-commerce
Channel dynamics of traditional toys and video games still differ
Growth in non-store retailing sales most pronounced in Western Europe

Store-Based Channels

Retail generalists find success as traditional toys and games stores slide
Tru Kids Inc remains the global leader in traditional toys and games stores
Tru Kids plots a comeback in the US… again
Embracing experiences bolsters traditional toys and games stores in China
Shopping in stores: product feel and experience matters to consumers
LEGO Group bets big on “retailtainment”

Non-Store Channels

E-commerce remains the final word in toys and games non-store retailing
Video games command the majority of e-commerce sales
Online sales growth is supported by improving infrastructure
Asia Pacific remains the leading market for online toys and games sales
Amazon, Alibaba and JD.com maintain their lead in global e-commerce
Case study: Target profits by expanding click-and-collect service
E-commerce growth to decelerate post-2020 but to maintain healthy pace

Future Developments

E-commerce’s grip on toys and games balanced by omnichannel strategies
Understanding emerging technologies to drive experience and sales
Key takeaways
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