NPD Forecasts 6.5% Growth for U.S. Toy Industry in 2016

This article contains excerpts from a November 1 press release from The NPD Group titled “Toys Tied to Experiences, Family Time, and Healthy Living Propel Industry Growth through the Holiday Season.”

November 1, 2016 | U.S. toy sales grew by 6% from January through September 2016, according to retail sales data from The NPD Group. NPD expects several trends to drive the toy industry to continued growth through the remainder of 2016, including consumer movement towards experiential purchasing, the popularity of collectibles, the drive toward healthier living, and higher price-points during this holiday season. For the year, NPD estimates toy sales to be up approximately 6.5%.

Seven of 11 toy super-categories have posted year-over-year growth through September. Of the seven, the fastest growing is Games and Puzzles, up 16%, followed by Dolls and Action Figures & Accessories, both up 12%. Within Games and Puzzles, every type of game is fueling growth, from family strategy and board games, to brainteasers and adult games, as well as preschool games.

“The trend in games is definitely one to watch, and it will continue to flourish as families look for more together time,” said Juli Lennett, NPD’s senior vice president and  U.S. toys industry analyst, in a press release.

The collectibles craze has built significant momentum heading into the fourth quarter. Sales of collectibles, which fall under playset dolls and action figures, were up 64%, or more than $220 million, through September. Approximately one-quarter of the $220 million is tied to blind bags, which are estimated to have grown about 80 percent so far this year.

The healthy living trend is a likely growth driver in many non-toy categories NPD tracks, from athletic footwear and activewear, to digital fitness and fresh food consumption. It is also tied to 9% year-to-date growth in Outdoor & Sports toys, the largest toy super-category with dollar sales representing about a quarter of all toy industry sales. On a dollar-basis only, Outdoor & Sports is the industry’s strongest growing thus far in 2016.

“I believe some of this explosion in Outdoor & Sports is a result of millennials seeking a healthier, outdoor lifestyle for their kids,” said Lennett. “I expect that the healthy living trend will continue, and it will be important for toy companies to engage with this trend, and look for ways to do so even in the fall and winter months.”

Higher-priced toys are likely to be the presents wrapped under the tree this holiday season. Items including the Star Wars Sphero App Controlled BB-8 and Star Wars Millennium Falcon are among the top 10 toys year-to-date, while the newly-released Hatchimals, an interactive toy that hatches from an egg, which released on October 7, was already among the top five best-selling toys for the week ending October 8, 2016.  

“NPD’s growth forecast for U.S. toy sales underscores the vitality of the toy industry.  This solid growth builds upon last year’s impressive 7% increase and increases in 2014, a trend we haven’t seen since the late 1990s,” said Steve Pasierb, TIA’s President & CEO. “Consumers are buying great toys and games fueled by innovation in practically every category -- from technology to collectibles to licensed products and STEM/STEAM products that are both fun and educational.”