Opportunities and challenges for wooden toys

Header Opportunities and challenges for wooden toys

The growing eco-awareness puts the focus on sustainable materials

At each Spielwarenmesse trade visitors see hundreds of companies offering all kinds of high quality wooden toys, games and puzzles. Traditionally though, the wooden toys sector is not regarded as the fastest moving and gets very little attention from major global toy companies overall. This lack of focus on wooden toys could be in the process of changing. At Spielwarenmesse 2020, before the COVID-19 pandemic hit, by far the biggest overall trend was sustainability. Whereas in years gone by there would be a few companies displaying sustainable products or initiatives, at the world’s biggest toy trade show in 2020, sustainability was a massive ‘thing‘. Wood is ultimately sustainable of course if it comes from sustainably managed forests. More and more in recent years, customers who normally insist on ethical audits have been asking for FSC certification for packaging and cardboard based products like games and puzzles. Forest Stewardship Council (FSC) is a global Non-Profit-Organization for forest certification. It certifies that products are from sustainable and well managed forests. The world is becoming more and more concerned with sustainability, and clearly wood and wood derived materials like cardboard have a major part to play in this. 

Wood still has the edge over bio-plastics

As consumers and retailers are starting to backlash against needless plastic waste in toys and other products, wooden toys seem likely to become part of the solution. In the last few years, we have seen a growing focus on reducing unnecessary plastic in toy packaging. However, the fundamental challenge and risk for the toy industry is that the majority of toys use plastic as the primary material. There are only so many solutions to this. Bioplastic is definitely an area of great interest for the toy industry. It could become a viable alternative across the board. But currently they are more expensive and pricing pressure is always down not up! Therefore, it seems likely that enterprising toy companies will look to add more wooden products to their product lines and to look at adding more wooden components where possible.

Play functionality of wood is further developed

There are some impressive innovations in the market using wood as the primary material. From stunningly beautiful wooden musical theatre sets to 3d wooden puzzles with moving mechanical parts and even wooden licensed action figures. There are high levels of play functionality and highly compelling experiences delivered by wooden toys. Very often plastic is rather used by habit than by conscious decision, but there are many opportunities for companies willing to step at least partly away from plastic. 

Platforms offer niche products commercial opportunities

One major trend we have identified in recent times is the increase in launch platforms and therefore commercial opportunity for niche products and niche interests. Barriers to entering the toy industry are reducing, and the opportunity to use technology enabled platforms to hit niche consumer segments has massively grown. Crowd funding platforms like Indiegogo and Kickstarter offer opportunity to guarantee funding to pay for tooling on plastic products, but they also allow alternative products, formats and play experiences to come to market without the tyranny of needing to comply with mass market buyer preferences! Where toy companies can create a compelling enough story for new wooden toys they can utilize crowdfunding platforms to bring these products to market.

Beyond crowdfunding, the pandemic accelerated rise of Amazon also suggests new opportunities for wooden and other toys, as the platform is in effect a product search engine. Where people are searching for a particular type of wooden toy, Amazon offers them an easier and more accessible way to find alternative products. 

Brand identity is crucial to winning the generic competition

While opportunities abound for wooden toys, there are some challenges. With less barriers to entry, and less design differentiation versus plastic toys, it can be hard to find a point of difference for the product. Retailers are never to slow to point out where they can source products directly from factories themselves, and many wooden toys tend to be generic in design and therefore somewhat of a commodity item i.e. where price is paramount. Toy companies offering wooden toys need to work extra hard to build brand identity and product innovation advantage to stay ahead of the generic competition. If they can build strong brands and even stronger product development pipelines, then the future looks bright for wooden toys. 

Sustainability is only going to get stronger as a theme in the toy business and consumer products more broadly. Consumer plastic rejection is a real thing, and consumers will not tell us in advance when they are no longer willing to buy toys which while having significant play value are not sustainable due to being primarily made from plastic. It is possible that some trend or event will cause consumers to reject plastic toys en masse. In which case, toy companies have not done yet would be wise to dilute their risk by diversifying and developing product lines based on other more sustainable materials – not least of which is wood. It has long term proven appeal to parents and children, which is readily available and fully sustainable.

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