supply side

Online ordering opens the curtain of the whole year

In the opening game of the new year, new forces seize the opportunity. Affected by the epidemic, the world's three major international exhibitions have successively shifted their "battlefields" from offline venues to online. Nuremberg Toy Fair not only launched a new product display column "BrandNew" on the official website, but also broadcast live on Facebook and Instagram. The New York Toy Fair will release the toy awards and trend briefings online, and hold Toy Fair Everywhere online throughout the year to help production and sales match up.

In addition to online exhibitions, overseas game companies have also hosted online new product preview activities, and on the basis of 2020, they have taken it to the next level, incorporating more interesting, interactive and immersive experiences: Selling Tide Funko, which is playing, holds an online "Funko Fair", with a special interactive exhibition hall to increase memory points; Marvin's Magic, which sells magic toys, holds magic shows online; Golden Bear, which sells plush, puts products in the magic garden; Hog Wild Toys has added interactive short videos to the static product catalog, which can be shared with each other...

Offline supply dilemma lasts for a long time

The online order fair was in full swing, but the industry turned around and found that due to the long tail effect of the epidemic and unexpected factors such as extreme weather, offline supply was not strong.

First, there is a shortage of various raw materials. Among them, the three major global chip production bases have encountered various accidents that affected their production capacity: the epidemic and extreme weather in the United States, water shortages and droughts in Taiwan, China, and a fire in the Japanese chip factory. The reconstruction of the new factory will take 3 to 4 years, so the chip problem will be in 2022. year will continue. The price of paper products has increased by 20% to 50% year-on-year before the epidemic due to online shopping in 2020, which has increased the demand for cartons.

Second, international shipping prices have skyrocketed. In 2021, the local production capacity of overseas countries will be limited, the demand for Chinese goods will increase sharply, and there will be insufficient containers and freighters. In addition, shipping companies are in a monopoly position, and logistics costs will increase by 5 to 10 times compared with that before the epidemic, causing the industry to complain a lot.

Finally, the connection of overseas logistics is not smooth. Even if the goods arrive at overseas ports after various difficulties, they still need to face the test of manpower shortage in customs clearance, unloading, and inland truck transshipment. During the epidemic lockdown period, it is almost normal for goods to be stranded in ports. In addition, overseas storage space is also tight. Taking the UK as an example, the vacancy rate is only 1.5%, and storage fees have risen by 20%

channel marketing

Online social streaming media attraction is enhanced

Connecting the channel marketing between the supply side and the consumer side, the popularity of new forces such as social media and streaming media will almost completely overwhelm traditional offline activities in 2021, mainly due to the transformation of children's consumption of entertainment content to online. According to the August data from the British market research company The Insights Family, compared with 2020, the proportion of children aged 3 to 12 watching TV per week has declined. Among them, the age group of 6 to 9 has the largest decline, with a drop of 29%. The weekly viewership of streaming Netflix has increased, with the 10-12 age group increasing by 18% year-on-year. According to another market research firm, Giraffe Insights, 35% of children are only exposed to entertainment content through online platforms such as YouTube and social media. This means that if brands abandon digital marketing, they lose at least a third of their target audience.

The effect of online marketing has also begun to surpass traditional media. A joint survey by children’s advertising platforms Precise TV and Giraffe Insights shows that YouTube is the most popular method of consuming content (85%), followed by video on demand (71%), video games (60%) and social media (46%), TV It is 41%. In terms of the retention rate of advertising impressions, streaming media also dominates. 70% of children and 25% of parents remember ads on YouTube, respectively, while only 35% of children and 12% of parents remember ads on broadcast TV.

At the same time, consumption also increased as viewing increased. Among children who watch streaming Disney+, the 10- to 12-year-old age group is 21% and 27% more likely than average to purchase licensed movies and TV shows, respectively [4] (data from The Family Insights). There are many popular products that are sold through the "viral" spread of the short video platform TikTok, such as flipping octopus, decompressing bubble boards with fingertips, surprise unboxing toys Mini Brands, etc.

Game companies have also adjusted their content distribution and marketing strategies. Hasbro distributes original entertainment content to new media platforms. Mattel specializes in creating new entertainment content for new media. In terms of marketing strategy, it also focuses on online, and Walmart directly cooperates with Netflix to open an exclusive sales page for Netflix's IP-licensed products.

Regulators tighten online advertising

Due to the proliferation of unboxing videos on the YouTube platform, it has attracted the attention of regulators. Following the $170 million fine in 2019 and the introduction of new child protection regulations in 2020, in July 2021, YouTube further released new regulations to restrict children's video content containing promotional elements. According to the new regulations, simple toy unboxing videos will be identified as inferior content by YouTube background and the platform traffic will be restricted. Around the same time, the Children's Advertising Review Organization (CARU) also released newly revised guidelines for child-safe advertising, calling for restrictions on video soft ads. These measures force content creators to weaken the elements of product promotion and improve the output of creative content. At the same time, this presents a new challenge to the YouTube influencer promotion strategy that has been popular in the past few years. At present, toy companies are gradually tilting towards new experiences and educational elements.

Elsewhere, Instagram doesn't have a policy on toy content, while TikTok is regulating toy videos aimed at or possibly for children. What new situation will this game between offline regulators and online marketing lead to? It remains to be seen.

consumer

The new form of online digital toys becomes popular

NFT (Non-Fungible Token) was born in 2017. It is a unique, non-copyable, and non-tamperable encryption tool built on the blockchain. It is widely used in the field of virtual art. In 2021, taking advantage of the trend of online consumption, NFT will "bloom" in the field of collectible toys. For example, Toy Mint Collectible Teddy Bear (May), Mattel Hot Wheels (June), Funko Square Head Baby (July), Hasbro Extraordinary Team (October), MGA Entertainment L.O.L. Surprise Doll (December) ) and many other toy companies to test the NFT field, and try to combine digital toys with physical toys (the article "How Overseas Play Enterprises Play with Digital Encryption" in the October 2021 issue of this issue discusses the current situation and development of NFT in the overseas toy field. future). Not only toy makers, but also retailers, such as Toys R Us and McDonald's, also announced the launch of NFT products in November 2021.

Multiple factors stimulate toy consumption offline

1. Economic factors. Although the epidemic has hit the economy, thanks to the economic impact subsidy issued by the European and American governments, the pockets of consumers have been filled. Some countries, such as the United States, have introduced tax rebate policies for families with children. Desire does not decrease but increases. Some popular toys are even more difficult to find, giving birth to all kinds of speculation.

2. Psychological factors. Under the restrictions of the epidemic, social needs have turned to various online entertainment platforms and toys. Multi-category toy sales benefit from this. (For more details on the hot-selling categories in 2021, please pay attention to the article "Overseas Toys All Series Rising Red" in this issue).

3. Environmental factors. With the government taking the lead in promulgating the plastic restriction order, and the "most stringent plastic restriction order in history" will finally be implemented in the EU in 2021, manufacturers are making more and more efforts to promote environmentally friendly toys. Coupled with the vitality of the natural ecology during the epidemic and the closure of the city, and the various extreme weather phenomena that have occurred around the world since 2021, it is even more to promote the needs of consumers and even manufacturers to speed up environmental protection consumption. LEGO, Hasbro, and Mattel have all set goals to fully use eco-friendly materials in the next few years.

In addition to using environmentally friendly materials for products, toy manufacturers have also begun to strengthen consumer-side recycling. Toy giants have also successively cooperated with specialized recycling agencies to recycle waste toys sent back by consumers.

In terms of consumption methods, toy subscription boxes derived from toy rental have gained very high popularity.

In general, the acceleration of online development and the recovery and rebound momentum of offline influence each other, driving the toy industry to make adjustments and changes on the supply side, channel marketing and consumer side. Can't help but look forward to what new developments will come in 2022.