Dive Brief:
-
The toy industry reported a 8% decline in sales in 2023, according to a report by Circana shared with Retail Dive.
-
A number of factors contributed to the downturn last year, including inflation, depleted customer savings and rising consumer credit card debt.
- However, the industry experienced a $5.7B increase in sales since 2019, driven by average selling price growth, per the report.
Dive Insight:
Even though customers pulled back on discretionary spending in 2023, they were still enthusiastic about Lego.
Within 11 toy supercategories tracked by Circana, three experienced growth in 2023. Building sets were up $220 million and experienced the fastest growth, with Lego Icons, Lego Disney Classic and Lego Speed Champions dominating the category. Plush toys had the second largest dollar gain, up $31 million, with Pokémon, Furby and Harry Potter leading the way.
Last year may have been difficult for the U.S. toy industry, but its four-year compound annual growth rate is still positive.
“Economic challenges have impacted overall consumer behavior, but let’s not overlook the fact that we have seen an influx of new consumers over the past few years,” Juli Lennett, vice president and toy industry advisor at Circana, said in a statement. “Keeping these consumers interested with new and exciting products is important for driving future growth.”
Top toy IP for 2023 included Barbie, Star Wars and Marvel, among others. Movies and streaming releases often put franchises in the spotlight, with built-in fan bases for toy sales, according to experts.
Barbie in particular was in the spotlight, with the blockbuster movie grossing over $1.4 billion in global sales. Mattel, in turn, launched a wide range of Barbie movie-related toys and products.
“The movie has broadened Barbie’s fan base, which will be an important contributor for the brand as part of our long-term franchise management strategy,” Mattel CEO Ynon Kriez said on a Q3 earnings call.
While toys have been primarily known as a category for kids, fan bases have picked up and captivated adult shoppers. Adult consumers have even become a primary target for many companies, including Build-A-Bear, which stated teens and adults now generate around 40% of the company’s total sales.
