Toys and Technology Drive Licensed Sales for Kids
Video games, electronics, and apps make up a combined 22 percent of kids’ licensed product dollar sales in the U.S. – on par with the volume represented by toys, which is the number one licensed industry at most retailers, according to the U.S. Kids License Report from global information company The NPD Group.
Toys capture the largest share of licensed sales among younger kids, representing over one-quarter of dollar sales for kids ages 2-5; however, this percentage shifts as video games, electronics, and apps gain more prominence as they get older. Video games alone garner 27 percent of sales among boys ages 10-14 (versus 14 percent for toys), and share also increases substantially among girls as they get older.
Toy stores can target Parents of Preschoolers by featuring their licensed toy selections in ads on a social networks. The new AudienceSCAN survey revealed 42% of Parents of Preschoolers took action after seeing one in the past month.
“Kids seek engagement with a character, sport, or personality they love in many, if not most, facets of their lives – from the clothing they wear, to the school supplies they use, and toys and games they play with,” said Juli Lennett, senior vice president and U.S. toys industry analyst at The NPD Group. “While licenses remain important to kids throughout the phases of their youth, they are engaging with licenses in new and different ways as they get older, and simultaneously become more technologically mature. Technology in the form of video games, electronics, and mobile apps poses an opportunity to extend the life of a license among kids where it makes sense.”
Another effective way to reach Parents of Preschoolers is through radio. Consumers can listen for the latest licensed games over-the-air, online, mobile or tablet. According to new AudienceSCAN data, 32% of Parents of Preschoolers took action after hearing spots in the past month.
Looking at the industry distribution for the top 10 licenses on the market, toys and video games capture the largest share for eight out of the top 10 licenses, illustrating the weight carried by each of these industries.
In terms of purchase method, the majority of kids’ licensed purchases are made in stores across industries, though online sales represent more than one-third of total sales across a number of them including video games (39 percent), apps (38 percent), and electronics (33 percent). Online toy sales are just shy of that mark, at 31 percent. Among these industries, specialty stores compete with mass chains and the online channel for share of licensed spending.
Brick-and-mortar retailers have an opportunity to increase traffic with newspaper (print, online, mobile or tablet) advertising. The new AudienceSCAN survey found 30% of Parents of Preschoolers took action after reading newspaper ads in the past month.
“There are many variables and moving parts when it comes to licensing out a property, which means there is not one formula for success,” said Lennett. “This presents an opportunity for retailers to more strategically merchandise their licensed products and diversify their offerings, giving consumers an easy opportunity to buy deep into the license. The online platform in particular is well-suited for this bundling strategy allowing consumers to buy across categories in one place, and keep them engaged in the license.”