The Pandemic and the Holidays

Through a year of uncertainty, the holiday season’s traditions are a reminder that though many things have changed this year, some traditions carry on, such as Christmas songs and gift-giving. Children (and some adults) look forward to this time of year, all year long. This holiday might look slightly different, but Santa has been working overtime this year with some help from toy and game manufacturers.  

Through COVID-19 changes, the toy industry has experienced record growth, and experts predict this will continue through the holiday season. 

Toys for every girl and boy

Toys sales have increased this year because parents bought an abundance of toys for their children in the pandemic. As many parents balance working and caring for their kids, including their education, toys help parents keep their children occupied. Year over year sales of toys in the U.S. has doubled since March, topping 37% in May. This is record growth for the toy market, which is typically pretty stable. The category’s sales for May were largely driven by outdoor play equipment and water slides.

Toy manufacturers Mattel and Hasbro reported third-quarter sales that exceed expectations. Mattel specifically called out Barbie’s sales increased by 29%, the largest quarterly sales increase for the brand since 2003.

Brands can leverage the toy market’s success by focusing on entertainment and activities for children, marketing it as a way to help parents during this difficult time. For example, brands such as Troili Candy and Unilever have been using AI to create interactive games and activities for kids and promote their brands. Brands that don’t necessarily sell toys or games can develop ways to gamifiy their products and services or simply use them as a marketing tool. 

Movie delays cause challenges

Many licensed toys tied to new movie releases reached the shelves but the films were delayed due to COVID-19 theater and film production shutdowns. The film industry had to pivot to drive-in theater and digital releases to help support related merchandise sales. 

Retailers with toys on their hands had to decide whether to put them on the shelves or wait until the movies came out. If retailers put the toys on the shelf, sales struggled due to less foot traffic in stores. As you can imagine, toys, mostly movie or character related, are strongly influenced by kids discovering them in the aisle. Action figure sales were a category that suffered significantly because of movie delays.

The film industry’s challenges have caused marketing for film-related licensed products to switch to other channels, like YouTube and dedicated outlets such as Nickelodeon.   

Marketer’s aiming to reach children as a target market should focus their advertising on YouTube and other mediums vs. traditional TV channels because that’s where kids are streaming content these days. Pew Research states, 81% of parents with children age 11 and under let their children watch videos on YouTube. 

Alternative channel marketing and linking to characters or film can help brands capitalize on the trends within toys. 

Holiday outlook

According to CNN business and a report from e-marketer, last year’s holiday toy sales were up by nearly 4% compared to 2018. Despite unemployment being higher this year due to COVID-19 related lay-offs, experts predict holiday sales growth at the same rate or higher as 2019. 

Parents want to keep the holidays the same for their kids, to provide some sense of normal. And higher-income families have more money to spend on toys and gifts this year because they didn’t spend as much on vacations and other activities.

In this tough year, significant discounts and a longer shopping season driven by big retailers and Amazon should help lower-income families or families affected by lay-offs buy presents for their children this holiday.

Top toy trends 

Whether you’re shopping for a little one in your life or in a child or toy-related business, it’s helpful to know what toys are flying off the shelves. 

Toys are not just toys anymore. Toys with educational value, encouraging children in the STEM (science, technology, engineering, and math) fields, are very popular with parents. Companies such as The Little Medical School technically sell toys, but their primary mission is to sell kids on the sciences. 

Water toys are also making a splash. Educational water toys teach children about the ocean and life under the water. Water also brings a fun surprise element for kids, as some water toys transform when they touch water or reveal a secret message. The attention on inclusivity and diversity is making it’s way to dolls. Mattel believes their growth this year is strongly tied to their effort to make Barbie more inclusive with different skin tones and body types. 

Last year, Mattel announced they were launching a gender-neutral doll line. The toy manufacturer stated they found “kids don’t want their toys dictated by gender norms,” according to Kim Culmone, Senior Vice President of Mattel Fashion Doll Design. 

Gaming is also growing. The popularity of Fortnite and World of Warcraft is spurring the growth of Esports games and advancing technology. Cloud gaming is an up and coming trend, where games can go beyond the current counsel, offering greater accessibility to users. With many schools online for most of the year, education in other formats such as toys and games can help supplement online learning and help parents who are trying to home school while working.

It’s time to play

Although this year has been challenging for everyone, parents have clung to toys as a lifesaver, and children have enjoyed new things to play with all year long. It’s been a good year for toy manufacturers with hopes of a successful holiday season, driven by deeper discounts and parents that want to keep the holidays as normal as possible for their children. 

Toy manufacturers and brands that want to reach children should advertise through YouTube and alternative channels. AI can also help brands develop creative ways to market through play and education, which parents and kids will love. 

Now is the time to play after such a trying year. It’s time to lean into holiday traditions even more, and that includes giving gifts and seeing the season through the eyes of a child. 

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