According to a new report by The NPD, since 2007, there has been a decline from 47% to 40% in the number of U.S. consumers who buy gifts for kids ages 0-2 in an average year. While the percent of the population buying gifts in a typical year has declined, the amount spent on the two of the most popular gifting occasions: baby showers and holidays, has increased slightly, with new baby gifts experiencing the most growth from $26 to $29. Also noteworthy is that, in 2010, doting grandparents are spending the most on new baby gifts, spending an average of $72.
Toy marketers are eyeing 2010 with caution. Who can blame them? Consumer spending was down in 2009 for nonessentials. The consumer electronics industry witnessed a 5% drop indicating that fewer adult toys were purchased. And children’s toys saw nearly a 1% drop in sales. The category went from $21.65 billion in 2008 sales to $21.47 billion in 2009.
The toy industry generated 2008 revenues of $21.64 billion in 2008, a drop of 3% from the previous year. And for the first six months in 2009, category sales declined another 2%. This year’s busy season for toy sales is currently underway and analysts are not expecting a spectacular turnaround, given the general economic situation. However, several analysts expect to see an overall increase in sales in 2010.
Retailers are looking for ways to boost revenue after last year’s disappointing holiday shopping season. This year parents again will look for bargains and toy manufacturers are responding with lower prices. The Toy Insider’s recently released “Hot 20” list of toys all retail for under $100; half of the toys retail for $30 or less. Toys based on movie and television properties will be popular this holiday, as will toys that connect to virtual worlds on the Internet.
Seven out of ten toy purchases were planned, with the first decision made being where to shop, according to Toy Purchase Decisions, the most recent report from leading market research company, The NPD Group. According to the report, over three-quarters of toy buyers who made planned purchases knew where they wanted to shop.