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Toy Retailing - UK - February 2017

“In an increasingly competitive toy market, toy specialists need to do all they can to stand out from generalists. Given that almost two fifths of shoppers have visited a store before buying a toy and parents view shopping trips as a way of bonding with their kids, there are more opportunities for toy retailers to make the in-store shopping experience more fun in order to encourage families to see them as a destination venue where they can spend time playing as well as shopping for toys.”
– Tamara Sender, Senior Retail Analyst

This Report answers the following key questions:

  • How has the toy market performed over the last year?
  • Who are the winners and losers in the toys and games market?
  • What are the opportunities for growth in the sector?

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Table of contents

  1. Overview

    • What you need to know
      • Products covered in this Report
      • Executive Summary

          • The market
            • Toy market grows 6.1% in 2016
              • Figure 1: Best-and worst-case forecast of UK value sales of toys and games, 2011-21
            • Growing tweens and teens to benefit some categories
              • Companies and brands
                • Hamleys is worth paying more for
                  • Figure 2: Attitudes towards and usage of selected brands, December 2016 and January 2017
                • Toys R Us sales decline, while other specialists grow revenue
                  • Amazon launches STEM subscription service
                    • The consumer
                      • Argos is most popular for toys
                        • Figure 3: Where people buy toys in-store and online, December 2016
                      • Low prices are main priority
                        • Figure 4: Most important factors when buying toys, December 2016
                      • Parents of young children visit stores before buying
                        • Figure 5: How people research before purchasing a toy, December 2016
                      • Parents of under-fives prefer educational toys
                        • Figure 6: Attitudes towards toys and games, December 2016
                      • 21% plan to buy more toys this Christmas
                        • Figure 7: Amount of toys purchased/which are planned to be purchased for Christmas 2016 compared with previous year, December 2016
                      • Importance of character merchandising
                        • Figure 8: Attitudes towards buying toys at Christmas, December 2016
                      • What we think
                      • Issues and Insights

                        • How has the toy market performed over the last year?
                          • The facts
                            • The implications
                              • Who are the winners and losers in the toys and games market?
                                • The facts
                                  • The implications
                                    • What are the opportunities for growth in the sector?
                                      • The facts
                                        • The implications
                                        • The Market – What You Need to Know

                                          • Toy market grows 6.1% in 2016
                                            • Sector to reach £3 billion by 2021
                                              • Price rises could hit sales
                                                • Tweens and teens to grow 12%
                                                  • Childhood obesity
                                                    • TV and technology dominate children’s activities
                                                      • Smartphone usage rises among 10-14s
                                                        • Black Friday and Christmas gift buying
                                                        • Market Size and Forecast

                                                          • Toy market grows 6.1% in 2016
                                                            • Figure 9: Best-and worst-case forecast of UK value sales of toys and games, 2011-21
                                                          • The future
                                                            • Figure 10: UK value sales of toys and games, 2011-21
                                                          • Forecast methodology
                                                            • The impact of the EU referendum vote
                                                              • Toy spend in previous slowdowns
                                                                • Figure 11: Alternative market scenarios for the post-Brexit clothing and accessories market, at current prices, 2016-21
                                                                • Figure 12: Detailed post-Brexit scenarios for the toys and games market, at current prices, 2016-21
                                                              • Price rises could hit sales
                                                              • Market Drivers

                                                                • Tweens and teens to grow 12%
                                                                  • Figure 13: Growth rate of the UK population, by age, 2011-16 and 2016-21
                                                                • Family sizes remain unchanged
                                                                  • Figure 14: Percentage of families with dependent children in UK, by number of dependent children in the family, 1996 and 2016
                                                                • Childhood obesity
                                                                  • Figure 15: Overweight and obesity prevalence, by age, England, 2014
                                                                • What activities children do
                                                                  • Figure 16: Activities children do at the weekend, May 2016
                                                                • Technology use
                                                                  • Figure 17: Technology devices children use in the household, May 2016 and March 2015
                                                                • Black Friday and Christmas gift buying
                                                                  • Figure 18: Attitudes to buying gifts in the Black Friday/Cyber Monday promotions, Christmas 2016
                                                              • Companies and Brands – What You Need to Know

                                                                • Non-specialists grab share
                                                                  • Toys R Us sales decline, while other specialists grow revenue
                                                                    • Focus on making the shopping experience more fun
                                                                      • Amazon launches STEM subscription service
                                                                        • More spent on advertising in 2016
                                                                          • Hamleys is worth paying more for
                                                                            • Toys R Us is good online
                                                                              • Board games and construction dominate space
                                                                              • Competitive Strategies

                                                                                • Financial outlook of specialists
                                                                                  • Figure 19: Key financials of the main players in the toy retailing market, 2014-16
                                                                                  • Figure 20: Outlet numbers of the main players in the toy retailing market, 2014-16
                                                                                • Non-specialists focus on toys
                                                                                  • Retail offering and brand positioning
                                                                                    • New developments
                                                                                      • Digital activity
                                                                                      • Launch Activity and Innovation

                                                                                        • Autism-friendly toy shopping experience
                                                                                          • Buy now, pay later
                                                                                            • Scented toys with personalised message
                                                                                              • Curated subscription-based home delivery toy service
                                                                                                • Tesco’s Toy Tester Hotline service
                                                                                                  • Toy concierge service
                                                                                                    • London’s LEGO flagship store’s one-of-a-kind shopping experience
                                                                                                      • Unique Christmas Grotto experience
                                                                                                        • Harry Potter at Heathrow airport
                                                                                                        • Advertising and Marketing Activity

                                                                                                          • Total advertising spend up 11.1% year-on-year in 2016
                                                                                                            • Figure 21: Total recorded above-the-line, online display and direct mail total advertising expenditure, by UK retail advertisers of toy products, 2012-16
                                                                                                          • Toys R Us dominates sector spend
                                                                                                            • Figure 22: Leading UK retail advertisers of toy products: Recorded above-the-line, online display and direct mail total advertising expenditure, 2012-16
                                                                                                          • Majority of advertising spend channelled through TV
                                                                                                            • Figure 23: UK retail advertisers of electrical products: Recorded above-the-line, online display and direct mail total advertising expenditure, by media type, 2012-16
                                                                                                          • Advertising spend peaks in the period leading up to Christmas
                                                                                                            • Figure 24: UK retail advertisers of toy products: Recorded above-the-line, online display and direct mail total advertising expenditure, by month, 2016
                                                                                                          • Nielsen Ad Intel coverage
                                                                                                          • Brand Research

                                                                                                              • Brand map
                                                                                                                • Figure 25: Attitudes towards and usage of selected brands, December 2016 and January 2017
                                                                                                              • Key brand metrics
                                                                                                                • Figure 26: Key metrics for selected brands, December 2016 and January 2017
                                                                                                              • Brand attitudes: Hamleys is worth paying more for
                                                                                                                • Figure 27: Attitudes, by brand, December 2016 and January 2017
                                                                                                              • Brand personality: The Entertainer is viewed as fun
                                                                                                                • Figure 28: Brand personality – Macro image, December 2016 and January 2017
                                                                                                              • Toys R Us is welcoming
                                                                                                                • Figure 29: Brand personality – Micro image, December 2016 and January 2017
                                                                                                              • Brand analysis
                                                                                                                • Amazon has the highest level of usage
                                                                                                                  • Figure 30: User profile of Amazon, December 2016
                                                                                                                • The Entertainer has low levels of awareness
                                                                                                                  • Figure 31: User profile of The Entertainer, January 2017
                                                                                                                • Hamleys is highly differentiated
                                                                                                                  • Figure 32: User profile of Hamleys, January 2017
                                                                                                                • Smyths seen as tired
                                                                                                                  • Figure 33: User profile of Smyths, January 2017
                                                                                                                • Toys R Us is good online
                                                                                                                  • Figure 34: User profile of Toys R Us, January 2017
                                                                                                                • Early Learning Centre seen as fun
                                                                                                                  • Figure 35: User profile of Early Learning Centre, January 2017
                                                                                                                • Argos offers good value
                                                                                                                  • Figure 36: User profile of Argos, December 2016
                                                                                                              • Space Allocation Summary

                                                                                                                • Summary allocation overview
                                                                                                                    • Figure 37: Leading toy retailers, summary space allocation estimates, February 2017
                                                                                                                  • Detailed space allocation
                                                                                                                    • Figure 38: Leading toy retailers, detailed space allocation estimates, February 2017
                                                                                                                    • Figure 39: Leading toy retailers, detailed space allocation estimates, February 2017
                                                                                                                  • Non-specialists in-store toy departments
                                                                                                                    • Figure 40: Non-specialists: Toy department as a percentage of total floor space, February 2017
                                                                                                                • The Consumer – What You Need to Know

                                                                                                                  • Argos is most popular for toys
                                                                                                                    • Toy specialists
                                                                                                                      • 44% buy toys online, while 47% buy in-store
                                                                                                                        • Low prices are the main priority
                                                                                                                          • Parents of young children visit stores before buying
                                                                                                                            • Fathers more likely to buy toys they have seen on TV
                                                                                                                              • Parents of under-fives prefer educational toys
                                                                                                                                • Men trust branded toys more
                                                                                                                                  • Over half buy Christmas toys in advance
                                                                                                                                    • Importance of character merchandising
                                                                                                                                    • Where People Buy Toys

                                                                                                                                      • Argos is most popular for toys
                                                                                                                                        • Figure 41: Where people buy toys in-store and online, December 2016
                                                                                                                                      • Toy specialists biased towards ABs
                                                                                                                                        • 44% buy toys online, while 47% buy in-store
                                                                                                                                          • Figure 42: Where people buy toys split by in-store and online, December 2016
                                                                                                                                        • Repertoire analysis
                                                                                                                                            • Figure 43: Repertoire of where people buy toys in-store and online, December 2016
                                                                                                                                        • Factors Influencing Toy Purchasing

                                                                                                                                          • Low prices are main priority
                                                                                                                                              • Figure 44: Most important factors when buying toys, December 2016
                                                                                                                                            • Fathers prioritise brands they trust
                                                                                                                                              • ABs choose retailers with expert staff
                                                                                                                                              • How People Research a Toy Purchase

                                                                                                                                                • Parents of young children visit stores before buying
                                                                                                                                                  • Figure 45: How people research before purchasing a toy, December 2016
                                                                                                                                                • Fathers more likely to buy toys they have seen on TV
                                                                                                                                                • Attitudes towards Toys and Games

                                                                                                                                                  • Parents of under-fives prefer educational toys
                                                                                                                                                      • Figure 46: Attitudes towards toys and games, December 2016
                                                                                                                                                    • 64% of parents use digital games to entertain children
                                                                                                                                                      • Men trust branded toys more
                                                                                                                                                        • Figure 47: Toy Retailing – CHAID – Tree output, December 2016
                                                                                                                                                      • Methodology
                                                                                                                                                        • Figure 48: Toy Retailing – CHAID – Table output, December 2016
                                                                                                                                                    • Buying Toys at Christmas

                                                                                                                                                      • 75% buy toys for Christmas
                                                                                                                                                        • Figure 49: Consumers who have purchased/plan to buy toys for Christmas 2016, December 2016
                                                                                                                                                      • 21% planned to buy more toys this Christmas
                                                                                                                                                        • Figure 50: Amount of toys purchased/which are planned to be purchased for Christmas 2016 compared with previous year, December 2016
                                                                                                                                                      • Over half buy Christmas toys in advance
                                                                                                                                                        • Black Friday for toys
                                                                                                                                                          • Figure 51: Attitudes towards buying toys at Christmas, December 2016
                                                                                                                                                        • Importance of character merchandising
                                                                                                                                                        • Appendix – Data Sources, Abbreviations and Supporting Information

                                                                                                                                                            • Abbreviations
                                                                                                                                                              • Consumer research methodology
                                                                                                                                                              • Appendix – Market Size and Forecast

                                                                                                                                                                • Forecast Methodology
                                                                                                                                                                    • Figure 52: Best-and worst-case forecast of UK value sales of toys and games, 2016-21

                                                                                                                                                                Toy Retailing - UK - February 2017

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