Disney’s Star Wars plush toys depicting the character Grogu, commonly known as Baby Yoda.
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Two things are keeping the toy industry afloat right now: inflation and a group of consumers known as “kidults.”
These kids at heart are responsible for a quarter of all toy sales a year, worth about $9 billion, and are the biggest driver of growth across the industry, according to data from NPD Group.
This cohort, which NPD defines as ages 12 and older, has been contributing steadily to the industry for years, but spending has accelerated in the wake of the pandemic, delivering year-over-year gains despite difficult comparisons. .
It’s also an important time for the toy industry, with the holiday season just around the corner. While sales were up across the board for board games, puzzles, and games during the pandemic, the first nine months of 2022 saw a 3% decline in sales volume. Higher toy prices helped offset these losses, as sales revenue for the time period rose 3%, NPD reported.
Children, who tend to spend more on toys, have a strong fondness for cartoons, superheroes, and collectibles that remind them of their childhood. They buy merchandise like action figures, Lego sets, and dolls that are normally considered “kids.” However, in recent years, toy manufacturers have created product lines just for these consumers, realizing that the demand is high for this generation of adults who still want to have fun.
“The definition of adulthood has definitely evolved,” said Jeremy Padawer, brand director for toy company Jazwares. “What it used to mean, to be an adult, was to be a very upstanding and serious member of society. And to do that, you had to show it intellectually, emotionally, in every other way.”
“Now we feel much freer to express our fanaticism as part of our adulthood,” he said.
In the 1970s and 1980s, the toy business began to move away from being an industry that was almost the next big thing and embraced creating more products based on entertainment franchises. No doubt there were toys based on movies and TV shows before this time, but that’s when the trend picked up.
“In 1977, ‘Star Wars’ is released and you started to see a lot more licensed products in stores, where we celebrated our fandom with toys and collectibles,” Padawer said.
This included non-toy merchandise such as bedding, tableware, and clothing.
“At the time, the intended recipients were almost all children,” he explained. “But those kids who were born in the 1970s and 1980s were really the first generation that had so many licenses and so many products that were available for them to demonstrably adhere to. And it’s not a huge surprise, then, that those kids are their 30 and 40 years old, that they continue to demonstrate it”.
This childish trend began to rise to prominence about a decade ago, when superhero movies and comic book culture burst into the mainstream. It has become more important to toy companies’ bottom lines in the past five years, said James Zahn, editor-in-chief of “The Toy Book” and senior editor of “The Toy Insider.”
Toymakers like Lego embraced these consumers and created lines, often tied to nostalgic entertainment properties, just for this cohort. HasbroThe Black Series of action figures is a prime example of this, tapping into the desire for high-quality Star Wars and Marvel collectibles. Even mattel has lines of Barbie and Hot Wheels that are specifically designed for this group of buyers.
Toy companies have even started creating their own TV and movie content to support the toy lines. Mattel launched its own in-house film company and plans to release “Barbie” in July 2023 and Hasbro bought eOne and will release “Dungeons & Dragons: Honor Among Thieves” in theaters in March.
these movies are not designed for small children instead, it caters to this larger group of toy-loving consumers.
Other brands, like funkothey have always targeted adult collectors who are in tune with their inner child.
But nostalgia doesn’t have to be tied to intellectual property.
“We know this generation takes their job seriously, but at the end of the day, they also want to have fun,” said Josh Shave, Razor’s senior director of marketing.
Razor began selling its classic scooter in 2000. Within six months, the company had sold more than 5 million units.
“Twenty years later, all those kids have grown up,” Shave said, noting that Razor has created electric versions of its scooters and ride-ons just for these people.
“The Razor Icon is literally the adult version of the scooter, but it’s electric,” he said. “I just finished an event and everyone’s like, ‘Oh my gosh, I’m so glad all these adults came up with this. I’m so glad they came up with this, it reminds me of…’ and I’m They would tell a story.”
The Razor Icon, which can hit 18 miles per hour, retails for $600 and is part of the company’s broader collection of kids’ gear. There’s also the Rambler, a version of the retro minibike, which looks like a bike from the 1960s and can go up to 15.5 kilometers per hour. It sells for $660.
Lego Star Wars toys are displayed inside a Toys “R” Us Inc. store in Paramus, New Jersey, USA, on Tuesday, November 26, 2019.
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Zahn also pointed to Basic Fun as another example of a company transforming its traditionally kid-focused toys into one-of-a-kind items for adults. The toymaker has partnered with Netflix to create a larger version of its Lite-Brite game based on “Stranger Things” that can be hung as a piece of art. It costs $100.
“And a lot of that we saw expand during the pandemic as people went home and rediscovered the game,” Zahn said.
That connection with the imagination did not end with the confinements.
In the past 12 months through September, the kidult group accounted for 60% of dollar growth in the industry, despite accounting for only a quarter of sales, according to NPD Checkout data.
“So it’s been a huge windfall,” said Juli Lennett, vice president and industry advisor for NPD’s US toy practice.
Still, the stakes are high for the toy industry as the final weeks of the year approach.
Inventory has been a huge challenge for retailers across the board. The supply chain glitch threatened to leave shelves empty for holiday shoppers last year, prompting many big box stores to hedge their bets on how much merchandise to order and receive deliveries earlier than usual. As the supply chain relaxed, many carried excess inventory, leading to deeper discounts as demand waned.
Some companies, like MGA Entertainment, which is the maker of the LOL Surprise dolls, decided to offer more items that sell for less than $15 to cater to more cost-conscious parents.
CEO Isaac Larian told CNBC that the company had about 20 products that sold for between $5 and $15 last year. This year, there are more than 200.
Children, on the other hand, are sought after consumers because they are often willing to spend more money than others on items for themselves.
“Right now, adult toy buyers are the reason for the growth in the toy business,” Larian said.