Growth drivers of the US toy market: the rise of nostalgia, old kids and social media marketing!

According to Insider Intelligence, e-commerce sales in the U.S. toy market will reach $94.66 billion this year, up 10.0% year-on-year. By 2027, the market size will reach $151.75 billion.

The growth in toy sales can be attributed to rising interest among children, the growing influence of online platforms, and the growth of older audiences. Insider Intelligence takes a deep dive into the trends impacting toy retail sales and how marketers can reach new audiences.

1. Nostalgia is a marketing tool

Brands can tap into the memories of Gen Z and millennial consumers of cartoons and toys they loved when they were young.

Companies like Mattel have created movies and shows around their toy brands to attract a wider audience. The live-action Barbie movie reignited American interest in the brand and even sparked a "Weird Barbie" trend on TikTok, where people show off their broken dolls from childhood.

2. The emergence of “kidults”

The NPD Group defines "kidults" as consumers aged 12 and over who buy toys or games for themselves. According to NPD data, "kidults" have an annual transaction volume of about $9 billion, accounting for a quarter of all toy sales.

The Teletubbies show opened a TikTok account to foster connections with older viewers, which also led to the spread of viral videos such as "Girls' Dinner", in which young women began sharing meals they made with snacks.

3. Children’s attention shifts from toys to games

Sky Canaves, an analyst at Insider Intelligence, said that as children's attention shifts from toys to games, it provides new growth opportunities for toy retailers and also provides an opportunity for games to become toy brands. A typical example is Pokémon.

Similar to Pokémon, the viral plush toy Squishmallows has also developed a strong fan base among older children, teenagers and even adults after becoming popular on TikTok.

4. Social Media and Influencers Expand Reach

The growing influence of social media platforms in determining toy trends has provided retailers with new avenues for marketing. For example, Ryan's World is a YouTube channel centered around toy reviews, which shows the power of video content in promoting toys.

Brands are working with influencers to reach a wider audience and inspire enthusiasm through user-generated content. For example, collectible toy company Mini Brands has leveraged TikTok influencer campaigns and viral trends like unboxing videos to drive sales.

5. Immersive experiences and personalization drive engagement

The toy company Lego has invested heavily in AR-enhanced store displays to create interactive experiences, and it is also investing in the virtual "metaverse" through a partnership with Epic Games.

Build-A-Bear Workshop's new "After Dark" program is aimed at children and provides personalized bears for older audiences. "This move is actually creating a one-to-one relationship with the product and brand, which is what great toys have always done, which is to inspire creativity and self-expression," said analysts.

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