NPD expects several trends to drive the toy industry to continued growth through the remainder of 2016, including consumer movement toward experiential purchasing, the popularity of collectibles, the drive toward healthier living, and higher price points during this holiday season. For the year, NPD estimates toy sales to be up approximately 6.5%.
Seven of 11 toy super-categories have posted year-over-year growth through September. Of the seven, the fastest growing is Games and Puzzles, up 16%, followed by Dolls and Action Figures, and Accessories, both up 12%. Within Games and Puzzles category, every type of game is fueling growth, from family strategy and board games to brainteasers and adult games, as well as preschool games.
“The trend in games is definitely one to watch, and it will continue to flourish as families look for more together time,” says Juli Lennett, SVP, U.S. toys industry analyst, The NPD Group.
Collectibles likely to be big
The collectibles craze has built significant momentum heading into the fourth quarter, according to NPD. Sales of collectibles, which fall under play-set dolls and action figures, were up 64%, or more than $220 million, through September. Approximately one-quarter of the $220 million is tied to blind bags, which are estimated to have grown about 80% so far this year.
“Within collectibles, there are a lot of new choices, and blind bags especially will make great stocking stuffers this Christmas,” Lennett says. “Looking at all the new collectibles and blind bags launched this fall, I expect continued strong growth of this segment.”
Healthy living likely to drive growth
The healthy-living trend is a likely growth driver in many of the non-toy categories NPD tracks, from athletic footwear and active wear to digital fitness and fresh-food consumption. It is also tied to 9% year-to-date growth in Outdoor and Sports toys, the largest toy super-category with dollar sales representing about a quarter of all toy industry sales. On a dollar-basis only, Outdoor and Sports is the industry’s strongest growing segment thus far in 2016.
“I believe some of this explosion in Outdoor and Sports is a result of millennials seeking a healthier, outdoor lifestyle for their kids,” Lennett says. “I expect that the healthy-living trend will continue, and it will be important for toy companies to engage with this trend and look for ways to do so even in the fall and winter months.”
Higher-priced items expected to grow
While collectibles such as blind bags may be popular gifts, higher-priced toys are likely to be the presents wrapped during the holiday season.
“The categories that I expect will provide the most growth in November and December will be connected toys, including drones, cars, and robotics; and wheels, such as battery-operated ride-ons, scooters, and hoverboards,” Lennett said.
“In prior years, there were one or two hot toys for holiday, but today there is not any one item. While this may create competition for manufacturers, it also presents many opportunities to grow the toy industry in the fourth quarter.”
What’s ahead for this holiday season
In terms of how holiday shopping will play out this season, Lennett adds, “I believe we will see a stronger December this year because there are two extra shopping days between Thanksgiving and Christmas 2016 over 2015, and one of those extra shopping days is a Saturday.
“As we saw from toy purchases last year, consumers were out in full force the week before and the week of Christmas. I expect to see this last-minute shopping behavior for toys again this year.”