By Nathan Rigby, VP Sales and Marketing at One Click Retail
In 2017, the global Toys market stagnated. In the US and Germany total toy sales flatlined and in France sales declined. But Amazon is bucking this trend by showing strong growth across all markets. In Germany, Amazon's sales grew by 42%. In France, Toys on Amazon grew by a whopping 78% while all other retailers saw sales disappearing. For brands, the message is loud and clear: if you want growth, you'll find it on Amazon.
In Europe, Toys is a major product group for Amazon, pulling in nearly €2 billion is sales between the company's major localized sites in the UK, Germany and France. In market share terms, Toys is one of the few product groups in which Amazon is performing better in Europe than in the US, the company's home market.
By comparison: our data reveals that most of Amazon's product groups in Europe earn roughly 20-30% of what they earn in America. For Toys, that number is over 50%.
Amazon's penetration in Germany is especially impressive. The UK is Europe's biggest toy market and in that country Amazon's growth rate of 10% is consistent with the growth of the overall market. In Germany, where the toy market is about 20% smaller than in the UK, Amazon's sales of Toys were 65% higher, and are growing at a much more rapid rate of 42% YoY.
2017 Top Categories:
- Robotic Toys
- Building Sets/Construction Toys
- Arts & Crafts
2017 Top Brands:
- Anki
- Lego
- VTech
What's Big: Robotics
The major trend on everyone's mind is robotics. In 2017, Robotic Toys ranked among the top 5 bestsellers for each of Amazon's three major European sites: Amazon.co.uk, Amazon.de and Amazon.fr. Though total sales in this subcategory remain relatively small, the category leaders were some of the most popular Toys of 2017, led by the Anki Cozmo which was the #1 bestselling toy in both the UK and France.
Yet, for as much as Robotic Toys is said to be a new and exciting category, it's surprisingly stagnant. Cozmo, the intelligent robot for kids from the San Francisco-based start-up Anki, has been a market leader for years. The runner-up robotic toy, LEGO Mindstorms EV3 – the #4 toy in the UK, #5 in Germany and #7 in France – was released in 2013.
There are other brands on the market such as Wonder Workshop and newer robotic toys from established brands like the LEGO Boost, but for the most part the category's sales are overwhelmingly concentrated on just two items. This suggests an opportunity for brands to compete in this space; there is consumer interest in new robotic toys, but there are too few options available.
What's Stable: Lego
LEGO's success isn't limited to Mindstorms – not by a long shot. Though it ranks high in all three countries, LEGO Mindstorms, the brand's leading robotic toy, is consistently beat by the LEGO Technic Porsche. In 2017 the Anki Cozmo outranked LEGO as the #1 item in the UK and France, but overall LEGO is the much more dominant brand in Europe – especially in Germany where Cozmo doesn't rank and each of the three bestselling Toys come from LEGO's Technic line of mechanical construction toys.
The brand's winning strategy is to produce toys for every age group, from baby blocks, to Boost (recommended ages 7-12), to the Bucket Wheel Excavator (recommended ages 12-16), to the bestselling Porche 911 GT3, a complex, 2700-piece scale model marketed to ages 16+.
What's Growing: Creative Kids
Currently, the real action taking place in the European toy market is in the rising popularity of play-and-learn toys and toys designed to foster creativity. VTech earned two top spots in the UK with pink and blue versions of their KidiZoom Camera, which claims to "turn your child into the family photographer.” The #4 Toy in France is an interactive device which guides kids as they create their own fantasy story.
German manufacturer Ravensburger develops toys that teach children how to spell and three of those items were among the top 10 bestselling toys of 2017. LEGO is also having success in this area, as is the Building Sets manufacturer Playmobil (Germany's domestic answer to LEGO) which also has three top 10 items in France.
Recognising this consumer demand, Amazon has partnered with British Science Week to re-launch the ‘STEAM’ store, a dedicated online marketplace for Science, Technology, Engineering, Arts & Mathematics tools marketed to children in the UK. This is a unique opportunity for brands to populate Amazon's latest dedicated marketplace with their products and reach a new audience.
What's Next: Arts & Crafts
The only toy category to appear among the top five categories in all three countries – the UK, Germany and France – was Arts & Crafts. Despite this, no Arts & Crafts items appeared among the top 10 bestsellers in any of the countries. There is a lot of consumer interest in this toy category but no dominant items, which suggests that there is a great opportunity for brands to innovate in this space and capture a waiting audience.
The popularity of Arts & Crafts in Europe is part of a wider countertrend to the touchscreen technologies that have begun to dominate the toy industry, with parents making an effort to reduce screen time and encourage more "analog" play. Whether this signals a major shift in the Toys market or is just a temporary lull in the dominance of robotics and screens is yet to be determined, but it does demonstrate a strong consumer market for many different kinds of toys.
In 2018, there are several key opportunities for toy brands. Robotic Toys attract a great deal of consumer interest and there are few significant competitors in that space. Toys that encourage learning and creativity are becoming much more important to today's parents. Alternatives to screens, such as Arts & Crafts and outdoor activities, are experiencing a revival.
Europe is an increasingly important market for toy brands on Amazon, worth more than half of the US market value and growing at a much faster rate. Toy brands that invest in Europe – and in Amazon – will find a huge audience waiting for them.
One Click Retail is the industry’s most accurate source of sales data for the world’s top eCommerce marketplaces. Using a combination of website indexing, machine learning and proprietary software, OCR estimates weekly online sales figures with market leading accuracy in order to deliver the best insights, analytics and strategies to their brand manufacturer clients. To catch a glimpse of how OCR gives brands critical edge on online platforms with our unique data and expertise, subscribe to our weekly eCommerce insights blog, and follow us on Twitter and LinkedIn.
If you are a brand manufacturer who would like to learn more about how you stack up to the competition—or would like to see your market share and category growth insights— fill out the form on the right or email us at info@oneclickretail.com for a free capabilities demo.
