Circana - Insight

Shiny and new

This month, Emilie looks ahead to toy sales in 2024, and at the effect that new launches can have on the overall toy market.

At the London and Nuremberg toy fairs, it has been exciting to see all the new launches for this year. While the total UK toy market was in decline -5% for 2023, new launches can help both manufacturers and retailers to attract consumer spend in 2024. Five of the top ten bestselling items based on value sales last year were new, and new items have been a contributing factor of growth for the top gaining subclasses. But what makes a new launch successful?

Targeting the right consumers is, of course key. Kidults (recipients ages 12 years or older) has been a growing trend in the UK and across Europe. Spend on toys for Kidults was up +6% in value in 12 months to September 2023 in the UK, accounting for 29% of the market sales. The UK toy market over-indexed on Kidults - spend in the UK grew twice as fast as in EU5, and this demographic will surely continue to be a growth opportunity for new launches in 2024. Building Sets and Games and Puzzles are the two largest supercategories for Kidults. Both Card Games and Adults Games increased +1% in value sales in 2023 vs. 2022. Standard Building sets was the eighth gaining subclass this year, adding an additional £1.5m to the UK market, with gain coming mostly from licences such as Star Wars, but also the Lego Icons range.

While marketing, social and media investment are important to build new product awareness and raise its profile, store presence is of course also key. New launches which can quickly build their distribution are often the most successful. In Q4 2023, Circana ran a sentiment survey asking UK consumers how they usually get informed about a toy to purchase for Christmas. The largest response was in-store visit, with 26% consumers saying this was a key factor in their decision-making process. This percentage jumped to 43% for consumers with kids aged 2-11 years in the household. TV ads and browsing online came in just behind, at 25% and 24% respectively.

Finally, setting up the right price for a new launch is important. The cost-of-living crisis has reduced consumer discretionary spend and inflation - while not growing as fast as last year - is still impacting consumers budgets. Overall, the average selling price for toys in 2023 was £10.79, up +2% versus 2022. The £10-£19.99 price point is the most popular in the UK, representing 33% of annual sales, and also one of the slowest declining price categories last year. The Under £10 price point accounts for 27% of value sales but is actually the largest in volume, accounting for 63% of unit sales. The top selling item in the UK last year was Squishmallows 8” Plush Assortment, which has an average selling price under £10.

The higher price points saw some decline last year, with the Over £100 price point down by -3%. At lower price points, Collectibles continue to be a growing trend that should continue in 2024, especially with all the new launches. One in every four toy units sold in 2023 was a collectible item, generating 14.5% of the total toys market value. Collectibles value sales were up +3% vs. 2022 and the average selling price was £7.46. In fact, none of the top 50 Collectibles properties have an average selling price above £13.50. Pokémon and Squishmallows were the top selling Collectible Properties in 2023, and their affordability is a key part of their success, as well as frequent new series that target both Kids and Kidults.

In addition to completely new launches, existing licences and brands can partner together to bring newness to already successful properties. This is an especially prevalent trend as there are lots of anniversaries to celebrate this year. Licences continued to gain share within the UK toy market, accounting for 32% of total sales. Seven of the top ten best-selling licences showed growth in 2023, and the top 10 gaining licences added +£51m to the total market compared to the prior year. Among others, it will be Peppa Pig’s 20-year anniversary and Hello Kitty’s 50th anniversary, whilst Transformers and TMNT will celebrate 40 years each; each of these brands is expected to capitalise on their 2023 performance. Other properties celebrating a milestone this year, such as Playmobil or Barbie, will provide another opportunity for new launches, media and instore activations, as well social media campaigns and awareness building.

New launches and expansions to beloved ranges bring excitement and innovation to the toy market – a market which thrives on newness, especially when targeting the right consumers, in the right places, at the right price point.

Licence Progression:

The Transformers licence jumped 71 ranks between November and December, primarily driven by a significant sales uplift from Lego Icons Transformers Optimus Prime, with the line reaching the top 50 items in value sales in Total Toys for the month of December. Transformers property sales were up +68% in total toys in 2023 vs. 2022, supported by the movie release, and the brand enjoyed a strong performance in Action Figures & Accessories, growing by +125%.

Top 10 Fastest Growing Subclasses - UK Toys Ranked by value gained

In 2023, among the 28 growing subclasses, eight grew for the third year in a row, thanks to a mix of leading brands’ success and new launches.

Following a couple of successful years, the subclass that added the most added value in the UK toy market in 2023 was Traditional Plush. Squishmallows generated around a quarter of this gain and was the No.1 gaining property across Total Toys in 2023 vs. 2022. Another 15% of this subclass gain came from new properties launched in 2023, such as Snackles from Zuru and Aphmau distributed by Character Option, which both ended up in the Top 10 new properties in Total UK Toys for 2023.

Strategic Trading Card Games also continued to rise in 2023 on the back of several years of growth, supported by Pokémon cards success, but also boosted by the new Disney Lorcana range from Ravensburger, as well as new licences for Magic the Gathering. Pre-school Talking and Sound also continued to grow thanks to Tonies, which is continually adding new characters and stories. Standard Building Sets sales also increased via new launches; three of the top ten items in Total Toys for the year were new Lego sets launched in 2023. Other long-term winners were Non-Strategic Trading Cards and Collectibles Stickers, Mini-Vehicles and Miscellaneous Toys, all supported by new launches.

Finally, Robotic/Interactive Playmates had the fifth largest sales increase for Full Year 2023 but was the second gaining in Q4 2023 vs. 2022. Over 90% of this subclass growth was driven by new launches. New Bitzee from Spin Master and Character Options’ Fingerlings reached the top 5 properties in this subclass and were also part of the top 10 new properties in Total Toy for the year.