Toy Marketing Trends From Toy Fair London

2023 was a challenging year for the toy industry. Brought on by a combination of high inflation, high interest rates and continued global unrest, the underlying economic trend for 2023 was an increased cost of living. The Toy Industry wasn’t immune from this and it led to the value of toy sales to decrease by 5% year on year, while total volume was down 7%. 

It’s with this in mind that we traveled to the London Toy Fair, one of the industry’s major events, to see what will be big in 2024. Over the past three days we spoke with people at stands, hosted a dinner, and met with marketing leaders from some of the biggest brands. These are the toy industry’s top marketing trends for this year that we heard: 

This is the year to get digital right 

Speaking to people across 50 different stands there was one thing that stood out: this is the year toy brands double down on their digital strategies. Several brands talked of upcoming film shoots for content intended specifically for digital as they look to ‘crack’ social media. It is now evident the mass reach provided by TV advertising that the industry used to rely on is no longer working. Linear TV viewership continues to decline, as audiences spend more time online. They are not only spending more time online but also in more places: YouTube, Netflix, Disney+, Roblox, gaming apps, Discord, to name just a few. The list of digital channels is endless. 

Toy marketers are thinking about where their audience is most prominent, and focusing their attention on that platform. One expert reminded us that marketers shouldn’t shoehorn a brand into a platform if it doesn’t make sense. It’s better to have focus rather than to be spread thin across lots of platforms. 

But it’s not just where an audience is but also how a brand engages with an audience. 

One person advised on the importance of creative that was fit for the platform it is intended for. For example, a video intended to reach people on YouTube might look quite different to one that is meant for an audience on TikTok. Marketers need to think carefully about where their audience is and how to communicate with them in a way that is authentic to that platform. 

Greater Media Efficiency

With toy sales down last year, there is increased scrutiny on marketing departments. There is pressure to effectively measure marketing ROI and for waste to be minimized. With media spend making up a large proportion of marketing budgets, this is the year of media efficiency. In order to achieve this, marketers need to have greater transparency into where their money is being spent, and the effectiveness of each channel at reaching target audiences. For example, does the YouTube media spend for a specific product reach the 4 to 6 year old girls that the product is aimed at? One marketer we spoke to talked of “going back to basics”; while testing new channels can be a useful learning exercise, there needs to be greater focus on the channel that is working best, and making that channel as efficient as possible. On YouTube specifically, an advertiser should be thinking even more granular: what are the specific videos that are working for my brand. Ultimately it comes down to the bottom line; which channels or videos are driving the best ROI and how can you grow them

Consumer spending habits have changed

As highlighted earlier in the article, toy sales were down 5% but volumes were down even more at 7%. This means consumers are buying a lower number of toys but the average price of those toys has actually gone up. What the industry calls “considered purchases” are increasing, while lower cost impulse purchases are down. One expert called this a paradigm shift in the way consumers are thinking about spending their money. This impacts the time it takes for a consumer to move down the marketing funnel as they spend longer making a purchase decision. Marketers need to consider this when building their media plans. For example, should they start awareness campaigns earlier in the year, giving consumers more time to think about purchases in the run up to the busy holiday season. 

Licensing is up

It wasn’t all doom and gloom last year, there were some notable success stories. One of them was the growth in revenue from licensing, which increased as a share of toy revenue. To further put that into perspective, just four years ago toy revenue from licensing was about one quarter, now it is one third. Some breakout IPs from last year include Squishmallows, Gabby’s Doll House and Pokemon. Marketers now need to think about how the next big licensed property can come from anywhere, and not just from the entertainment industry as it has done in the past.

Breakout segments

Along with the growth in licensing revenue, there were some segments within the toy industry that had a bumper 2023. Toys related to Japanese culture and specifically anime more than doubled last year. While the kidult segment grew by 6% and now represents close to a third of the UK toy market. Marketers this year will be thinking about how to take advantage of these breakout segments and reach their niche audiences.

A special thank you to all of the people who participated in giving us their opinions on the major trends, challenges and opportunities at Toy Fair. We'll hopefully see a lot of you in Nuremberg next week. Please get in touch if you'd like to meet. We wish all of our partners a strong 2024, there is much to look forward to!