Despite these challenges, the region still holds some untapped potential: with a per capita expenditure of €35 in 2019 in Western Europe, the region lags behind others such as North America which has a €61 per capita expenditure and Australasia having a €36 per capita expenditure.
Digitalisation in toys: where are we now?
Digitalisation has been around for over a decade already. And especially during the current corona situation it is more important than ever to be digitally positioned. Manufacturers and retailers who still have deficits in this area are now thinking about how they can strengthen their online presence. In fact, at least 75 percent of the population in Western Europe are already accessing the internet daily and almost every manufacturer of toys has developed their own website. It seems like consumers are running towards the internet. As internet usage becomes increasingly common, a growing proportion of daily tasks like reading news, shopping and paying bills have moved almost entirely to internet connected devices. Children growing up in this environment have become increasingly familiar with and increasingly dependent on virtual content viewing it as an integral part of their life and playtime.
In 2014, only 20 percent of all toys were bought online; however, in 2019 the number rose up to 30 percent in Western Europe. E-commerce is not only more convenient for consumers than going to the physical outlets to shop but also offers consumers the opportunity of comparing prices between different stores - a feature well appreciated by price-sensitive consumers and that has led to a yearly increase in consumers purchasing online. In Germany, for example, online stores such as Vedes and myToys already took advantage of this trend, enhanced their online stores and managed to dominate the online channel for traditional toys and stores.
Toys are adapting and responding to tech-savy children’s interests
Over the next five years, traditional toys and games in Western Europe is expected to post a three percent growth in sales mostly due to parents having higher disposable income.
Toys will no longer remain traditional as in previous years. Now, generation Alpha children - also known as the tech-savvy young children of Millennials; those born between 2010 and 2024 - are being born into a technological world along with iPhones, iPads and applications. Therefore, toy makers will have to incorporate a digital component into their toys to appeal to children and compete against video games. LEGO, for example, is already embracing this and in 2019 launched Hidden Side, a new interactive game world where children play with one hand in the physical world and the other in the digital world.
During this year’s Spielwarenmesse in Nürnberg, Mattel introduced their new version of the classic drawing game Pictionary called “Pictionary Air”. In this new game players draw in the air while their team see the sketch in the app and guess the clue. These are only two examples of what big corporations are already doing to embrace digitalisation in their toys. This will indeed continue in the next years as more manufactures launch new products with a digital component.
Digitalisation in toys is the mid-territory parents can accept
Although parents are trying to find ways to get their children and teens to stop spending so much time playing video games, most are already allowing them at home. However, they are still concerned regarding the level of violence some of these games have.
This is an extract from Euromonitor International’s Toys and Games in the United Kingdom report. For more information, please click here.