Special Feature Frédérique Tutt
Melissa Symonds
NPD
Global Q4 report The coronavirus pandemic has led to some fascinating shifts in consumer behaviour, and with attention now turning to Christmas all eyes are on how Q4 may pan out for the toy industry – not just in the UK, but across the world. In this exclusive article, Frédérique Tutt, global toys industry analyst at The NPD Group, and Melissa Symonds, director UK Toys, EuroToys, tell Toy World how Covid-19 has impacted toy shopping behaviours globally, and predict how the festive season could pan out in this very unusual year.
UK Online Toys Trend by Quarter
58% of toy sales were online in the first half of 2020, up from 34% in 2019 80% 70% 60% 50%
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As we already know, Toys has performed extraordinarily well in the UK this year considering everything that’s happened,” enthuses Mel. “When stores were closed, UK value sales on toys grew by +18%, and although that trend hasn’t continued quite so strongly since stores re-opened, we’re still seeing growth. Post-lockdown, the UK toy market is up 4%, which means YTD we’re up 6% (Week 4 of September). Some of the weeks in September were also showing double digit growth, which shows that things have started to pick up since the kids went back to school. Collectibles and other lowerpriced toys have been recovery since mid-June, whereas we were quite reliant on higher-pricepoint sales during lockdown.” To the end of August, adds Fred, the 13 countries where POS is tracked by NPD show an overall increase of +11%. The group is confident in saying that the lack of entertainment options and foreign holidays this year has meant that the toy market has increased its share of the leisure and entertainment budget. On the face of it, you’d be forgiven for thinking that the global toy market has fared unbelievably well since Covid-19 made itself known, but it’s not quite that simple. A large percentage of these international gains - 80% - is coming from the US market. If you take the bigger European countries – UK, France, Germany, Italy and Spain – growth is corrected to 2%. What this does mean, however, is that the UK toy industry is significantly outperforming the rest of Europe. “Southern Europe was more heavily impacted by the coronavirus,” explains Fred. “Italy, Spain
40% 30% 20% 10% 0%
Q1 2019
Q2 2019
Q3 2019
Q4 2019
Q1 2020
Q2 2020
Source: NPD Consumer Panel | UK | Value Share % | Q1’19-Q2’20 DocumentThe classification: Client/Third Party Confidential NPD Group, Inc. | Proprietary and confidential
and France are currently trending negatively because the online sector isn’t as developed. These countries, weren’t able to switch a physical purchase for an online one like-for-like so easily. However, even in the countries that saw major declines during lockdown, there are signs of recovery. More than 80% of lost sales in France have now been recovered, and, since stores were reopened, May to September has been strong. Consumers in these regions are shopping in stores more than they are online.” Fred adds: “There’s also a cultural element at play. The Spanish in particular remember the financial crisis of 2009, when unemployment soared to record levels - around 20% in 2010 and 2011 - so some Southern countries are bracing themselves for a time when they may see unemployment rise again. The French, meanwhile, have confidence in the social system, but have also been saving a huge amount since lockdown, more than €80m so far. This is the complete opposite of what’s happening in America; when households received their stimulus cheques, they all went out and spent
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them. Generally speaking, Americans don’t save like those in other countries do.” In the UK, online sales are ahead of most other countries; for the first half of the year, 58% of total toy sales took place online, and for Q2 that figure rises to three quarters. Online sales have never been that high during a quarter before, says Mel, and likely never will be again (unless there is another national lockdown in the future). Online sales during Q4, which usually comprise 40-45% of total sales, are likely to be higher this year, but it’s unlikely they’ll reach the lofty 73% heights they did in Q2. The shift to online shopping didn’t mark a massive change to consumer shopping habits in the UK because the online sector was already there, and many retailers already had some sort of digital presence. This preparedness (albeit not planned intentionally in the event of a pandemic) was what really helped the UK through the worst of the pandemic disruption. The UK also reflected other parts of Europe in its sales of kidult toys, which Mel says went through the roof as locked-down grownups sought ways to keep themselves entertained