NPD Insight

Characters and themes drive sales

This month, Rory highlights the areas of the UK toy market that are enjoying a successful 2022, identifying the strongest IPs and themes in the market.

2022 is proving to be another challenging year for the UK toy market, the latest YTD May data shows the value trend at -8% for the year, while the month of May was -7%. There are several external factors influencing the market, including rising costs across a number of areas, impacting consumer spending. Thankfully, there are still some success stories within the data, including some very positive trends in licensing and encouraging growth in several categories. Digging a little deeper into the data helps us understand what is driving these trends.

The first area to highlight is licensing. YTD May data reveals that licensing is accounting for nearly a third of all toy value, up two percentage points from the same period in 2021. One factor behind this performance is the fact that sales are coming from a wide variety of genres and properties. The list of top 10 growth licences includes movie related properties such as Spider-Man, Batman and Jurassic Park, all showing double digit growth. There are also IPs from TV and streaming services, with Bluey, CoComelon and Miraculous all featuring in the top growth licences. The other area featuring prominently in the list of top growth licences is Video Games; Among Us is in the No.8 spot for growth and Sonic the Hedgehog at No.10. Looking at subclasses reinforces the current strength of licensing: Traditional Plush is the top growth subclass in toys, having gained over £9m so far this year, with just under £2m of this increase coming from licensed product. Action Figure Collectibles is the second best performing subclass, having gained nearly £2m this year. Licensing accounts for 85% of the subclass and has added £3.6m.

As mentioned already, the Plush supercategory is enjoying ongoing success, driven by strong growth in Traditional Plush, with a +38% trend so far this year. One particular property that seems to have captured the interest of kids this year is Squishmallows; the property has been the top growth property in the entire market so far in 2022, adding nearly £5m already. With all of that value in the Traditional Plush subclass, it represents around half of the growth here. The key area of success for Squishmallows is primarily at the under £20 price point, which accounts for just under 80% of all value. However, the brand’s growth has been helped by moving into higher price points too. In 2021, only around 2% of overall value was over £20, but that has now moved to over 20% of value, adding £1.5m to the brand. It’s not all about Squishmallows in Plush though as Ty, Peppa Pig and CoComelon also make up some of the top growth properties.

As well as licences, the growth in different types of themes is an area of the UK toy market that possibly doesn’t get the exposure it should. This can be anything from Superheroes through to Fairies and Princesses. It can be useful to look at the data in this way to understand trends in the market and to assess whether growth is coming from any unexpected areas. The top growth theme currently is Superheroes, which isn’t a huge surprise given the strong performance from both Marvel and DC in recent months. The next best placed theme is dogs, with both Bluey and Hey Duggee figuring prominently. Dogs as a theme is three times higher in value as Cats and has added ten times as much vs. 2021. Other themes that are growing in 2022 include Dinosaurs, driven by Jurassic World, whilst Fairies and Ponies are adding value too.

There are clearly more challenges to come in 2022, but it is also important to celebrate the successes. Considering the number of different areas that have been highlighted in this article, I believe there is genuine cause for optimism for the rest of the year, particularly in licensing. With a strong summer movie schedule still to come, we could see licensed merchandise’s 30% share of the toy market climb even higher by the end of the year.

Item Progression:

The Muppets licence has been the highest climber in May compared to its position in April, rising 147 places to be 15th top licence for the month. This rise is due to the release of the Muppets Minifigures line from the Lego Group. The Muppets Minifigures Asst was the No.2 item in the total UK toy market for the month of May, at an average price of £3.40. The line includes favourite characters such as Kermit the Frog, Miss Piggy and Fozzie Bear.

The top 10 growth subclasses in toys for YTD May give an indicator of the current hot product trends in 2022. The top growth subclass is Traditional Plush, which has gained nearly four times as much value in 2022 as the second-best performing subclass. Squishmallows continues to be one of the standout properties in 2022 and is the top contributor to this strong Traditional Plush growth.

Action Figure Collectibles is the 2nd top performer with Funko, Marvel, Star Wars and DC being the top four properties in the subclass, all showing double digit growth vs. 2021. Miscellaneous Toys is the 3rd best performer, with 5 Surprise the top property in value and also in value growth. This performance has been helped by both the Mystery Pack and Disney Store Mystery Pack being inside the top 10 items for most of May.

Joining Traditional Plush in the top performing subclasses is Special Feature/Interactive Plush, which was the 4th top performing subclass for YTD May 2022. CoComelon is the top property here, growing by +48% compared to last year. Pets Alive is the No.2 property, followed by Star Wars, where the growth is driven by the Mandalorian licence.