The Toy Industry: from a ‘game over’ fate, to the challenge of winning the game.
08 de January de 2021
08 de January de 2021
“All grown-ups were once children... but only few of them remember it”, The Little Prince once said. And he was right. When we grow up, we think we know everything — although that is never the case. That is why EAE has published the study “Rules of the Game 2020”, to learn from its author –teacher at EAE, Eduardo Irastorza– how the toy industry is doing.
This 2020 has been a difficult year — we can all agree. But it has also taught us to enjoy the time we spend at home with our family. Hours and hours of non-stop playing… and yet, we used the same old toys we have always had, for the crisis that the pandemic brought about, made it difficult for us to shop for new things that were not staple products.
Innocence is the best tool that children have to discover the world around them — and imagination is their best game partner. That is why, when asked what they prefer to do for fun, children’s top choices are dolls, action figures and outdoor sports — all of which have something in common: imagination is what brings them to life. Children still give voice, feelings and movement to dolls, still use their mouths to imitate the sound of the engines in their cars and still fill their castles with adventures that are as unique as their characters.
However, even when the toy industry has been one of the leaders for decades, the sales figures have significantly decreased due to the pandemic and the crisis it brought about, but also due to the spectacular rise of videogames — an industry that is a threat to the profitability of the toy industry in Spain and forces it to reinvent itself, just like they are doing in other countries like the UK and Germany.
Also, we must take into account that in Europe, more than anywhere else on Earth, a more traditional mentality towards games coexist with another that has more progressive values, like inclusion and gender equality. Thus, the challenge that the toy industry is going to face will be meeting the needs of all of them, adapting the same old toys to the state of constant change that we live in.
Four walls can offer infinite possibilities if you know how to make the most of them. Although outside we must stay two meters apart from one another and respect social distance, once we walk through the door, we have the chance to be closer to the people we live with, to enjoy the time together and get to know each other better.
During this pandemic, we got the boardgames out of the closet, rediscovering the value of educational games. Construction games and puzzles have gathered families around the living room table.
The value that these games have, according to educators, also lies in the fact that they help prevent kids from spending too much time in front of the screen and doing nothing else. In this way, playing games with the family develops the relational skills of all the members — adults and children. Without a doubt, the best thing we got after going through such a difficult experience.
Thus, toy companies must make the most of this hard training course, focusing their production on more educational and participative games, like other countries are already doing.
The “Toys & Games” category is still the crown’s jewel. Toys stand out bright on the shelves with their striking colours for everyone to see. They are used to being the prefered choice for important dates, the first thought on everyone’s mind when we hear the word “fun”.
However, the striking sales figures must not be misinterpreted. The category includes another powerful player: video games — an industry that has taken the lead to compete with traditional toys and does it with greater success with each passing day.
In a world that becomes more digital with each passing day, anyone would assume that this battle of “atoms vs bits” would mean a clear game over for traditional toys. But that is not the case. It is hard to think of a future for this industry without a mix of both. The key is not to fight, but rather complement each other. Users demand a comprehensive brand experience both online and offline, and big toy companies have started to get it and act accordingly.
In fact, it is becoming more and more usual for video games characters to come to life as real life toys as well as toys having their virtual replica created. Without a doubt, in the not too distant future, the alliances between companies from “both sides of the line” will be much more frequent and solid. After all, it is essential for both of them, and cooperation –rather than competition– will bring more benefits.
This year alone, the effects of the pandemic have caused the sales and profits of the toy industry to decrease by 4% and it would be difficult to say what the figures will be in the coming years. In this scenario where uncertainty reigns, where solving the coronavirus situation is still a distant possibility, we have only two certainties:
The sum of these two factors will have a negative impact on the figures of this sensitive industry — an industry that will be forced to reinvent itself in order to endure and grow. Such is the case, that its recovery is not expected until the year 2023. However, this information is quite hypothetical, since the impact that these factors will have and the duration of the sanitary crisis are hard to predict.
In any case, and setting aside the figures, many things will change in this industry — especially as a consequence of a new mentality and new values that find their ground on rediscovering natural goods, responsible consumption and the social dimension of our lives.
Going to the toy shop and walking down the aisles, gazing in awe at the shelves filled with boxes of all colours and size, has always been the dream of every child. We know how important it is to pay special attention to the shop itself and come up with creative and innovative ideas to empathise with the customer. That is why our Master’s Degree in Customer Experience & Innovation deals specifically with that topic.
This tradition has been altered by the rise of e-commerce. However, traditional shops still withstand and only 11% of the customers prefer shopping for toys online. Nevertheless, it is a number that entails a great leap for the industry, since once the fear of buying online disappears, the habit sets in and it is carried out more intensely and more often.
That is why, toy manufacturers must be very aware of this “new reality” when developing their marketing strategies so as to reinvent their business model by improving the shopping experience and providing added value for the people who visit the shop. And the shop must be a place where customers discover, learn and receive friendly and personal service, feeling rewarded for their loyalty.
In this situation, where it comes down to “adapt or perish”, the toy industry will have to take on the challenge of progressively reducing the number of toys that run on batteries. A fact that is also linked to video games and how hard it is to compete with the mobility experience they offer. Add to that factors like people’s rising awareness and concern about sustainability and you will start to see the picture — toys with batteries will not have it easy in the future.
In conclusion, 2020 has completely changed our usual day to day: going to the office, meeting with friends to have a drink afterwards, arranging a big family dinner on the weekends or going out on the streets for some exercise. But we have also learned to live each moment in hundreds of different and unique ways, appreciating that time that we often fail to take advantage of and enjoying the people we love the most like never before.
It is like when you play a game: the important part is having fun.
Because we cannot lose, we only learn.
And the best price we get is enjoying the time we spend close to the people we love.