The toy market had a remarkably successful 2020, all things considered. While many other consumer markets struggled to cope with the prevailing conditions, toys proved to be an enduring category, outperforming expectations to end the year with higher sales than 2019. Few would have predicted that result when the first pandemic first took hold early last year.
Incredibly, sales of licensed toys even managed to outperform the overall toy market here in the UK. While total toys in the UK grew +5% in 2020, licensed toys grew more than twice as fast, up +12% last year. Indeed, 2020 was the best performing year for licensed toys since 2017, accounting for £1 in every £4 spent on toys in the UK, representing 27% of all toy spend.
Interestingly – and perhaps slightly counter-intuitively - both TV and movie properties grew last year, although inevitably there were winners and losers. Many of the movies which contributed to the increase were either established film franchises or movies from 2019. It was perhaps no surprise that Star Wars had a strong year, driven by the successful introduction of Disney+ in the UK and the release of the incredibly popular Mandalorian spin-off. Frozen also enjoyed a strong year, following on from the original release of the sequel last November. There is no doubt that the timing of the launch of Disney+ was incredibly fortuitous; the day after the UK went into its first national lockdown, the channel made it debut in the UK. With kids home from school and needing to be kept entertained and occupied, the channel inadvertently found itself the go-to option for many exasperated parents. So, while Frozen 2 had not quite lived up to sky-high expectations on its cinematic release, it ended up having a ‘long tail’ from a merchandising perspective, something few would have predicted at the back end of last year after its initial below-par debut. Classic movie properties Harry Potter and Jurassic World are also said to have posted strong numbers in 2020, despite it being a non-movie year.
Other movie releases were not so fortuitous: films such as Minions: The Rise of Gru, The SpongeBob Movie: Sponge on the Run, the latest instalment of James Bond No Time to Die and many others were delayed to 2021, with the expectation that life would be returning to normal by now. As it has become clear that the pandemic is lingering far longer than any of us expected, two distinct camps have emerged: the movie studios which are holding out until cinemas across the globe are able to re-open, and those who are exploring alternative release strategies. The VOD strategy was pioneered last year by Universal Studios with its Trolls World Tour release, with a degree of success. Warner Bros is another studio looking to adopt this route in 2021, by releasing movies simultaneously into cinemas and on HBO Max in countries where cinema openings remain limited. It will be interesting to see what happens as this year unfolds, but retailers are largely adopting a more cautious approach to movie properties until they have clarity and visibility on specific release dates and launch strategies: after last year, who could blame them.
The ‘stay at home’ viewing bounce extended far beyond Disney+, with many properties benefitting from vastly increased viewing numbers across both linear TV and online channels such as YouTube. In 2020, content really was king. It wasn’t just one property or a particular demographic which drove viewing figures: whether it was Pre-School properties such as Paw Patrol, Peppa Pig or Thomas the Tank Engine, Boys licences such as Pokémon and Sonic or Girls properties like Barbie, L.O.L. Surprise or IMC’s Cry Babies Magic Tears, TV programmes and animated content had a huge number of eyeballs on them, and strong sales followed.
So, what does 2021 hold? Just as the overall toy market is coming off the back of a strong year, so is licensed merchandise. While this is a positive, there will be challenges when it comes to anniversarying some numbers. However, with question marks remaining over when children will be able to return to school full-time here in the UK, the opportunity to build strong bonds with consumers through programming and content remains.
The movie release schedule is unfortunately still in disarray: it is noticeable that many of the studios still don’t have concrete information to share about release dates and plans. However, all things considered, we entered 2021 with many positives to focus on, safe in the knowledge that licensed properties will continue to be a key driver of toy sales.