Adults are buying toys for themselves, and it’s the biggest source of growth for the industry

There are two things keeping the toy industry afloat right now: inflation and a consumer group known as “kidlets”.

These children are responsible for one-quarter of all toy sales annually, roughly $9 billion worth, according to NPD Group data, and are the biggest driver of growth in the entire industry.

This cohort, which the NPD defines as ages 12 and older, has been a steady contributor to the industry for years, but spending has accelerated in the wake of the pandemic, leading to year-over-year gains despite difficult comparisons .

It’s also an important moment for the toy industry, with the holiday season upon us. While sales for board games, puzzles and playsets increased during the pandemic, the first nine months of 2022 saw a 3% decline in sales volume. NPD reported that higher toy prices helped offset these losses, as sales revenue increased 3% for the time period.

Kids, who spend more on toys, love cartoons, superheroes and collectibles that remind them of their childhood. They buy items such as action figures, Lego sets and dolls that might generally be considered “for kids”. However, in recent years, toy manufacturers have created product lines just for these consumers, realizing that demand is high for this generation of adults who still want to have fun.

“The definition of adulthood has definitely evolved,” said Jeremy Padavar, chief brand officer for toy company Jazzwares. “What it meant to be an adult was to be a very upright, serious member of society. And to do that you had to demonstrate it intellectually, emotionally, in every other way.”

“Now we feel more free to express ourselves to our fans as part of our adulthood,” he said.

In the 70s and 80s, the toy business began to move away from an industry that was all about the next innovation and embraced creating more products based on entertainment franchises. To be sure, there were toys based on movies and TV shows before this time, but this is when the trend kicked into high gear.

“In 1977, ‘Star Wars’ launched, and you started to see a lot of licensed product in retail, where we were celebrating our fandom with toys and collectibles,” Padawar said.

This included non-toy merchandise such as bedsheets, crockery, and clothing.

“At the time, the intended recipients were almost all children,” he explained. “But the kids who were born in the ’70s and ’80s were really the first generation that had that much license and that much product that was available to them and it’s not a big surprise, then those kids. Their 30s and 40s decade, that they continue to perform it.”

This kiddling trend began rising in prominence about a decade ago, as superhero movies and comic book culture went mainstream. It’s become more consequential to toy companies’ bottom lines over the past five years, said James Zane, editor-in-chief of “The Toy Book” and senior editor of “The Toy Insider.”

Toy manufacturers such as Lego embraced these consumers and created lines, often associated with nostalgic entertainment qualities for this cohort. hasbroThe Black Series for Action Figures is a prime example of this, tapping into the desire for high-quality Star Wars and Marvel collectibles. Flat Mattel Barbie and Hot Wheels have lines that are specifically designed for this group of buyers.

Toy companies have also begun creating their own television and movie content to support the toy lines. Mattel launched its own internal movie company and is set to release “Barbie” in July 2023 and Hasbro bought the E-One and will set “Dungeons & Dragons: Honor Among Thieves” in theaters in March.

these are movies Not designed for small children, Instead it caters to this older group of toy-loving consumers.

other brands, such as Funkohas always catered to the adult collector who is in tune with their inner child.

But nostalgia doesn’t need to be tied to intellectual property.

“We know this generation takes their work very seriously, but at the end of the day, they also want to have fun,” said Josh Shave, senior director of marketing for Razer.

Razor started selling its classic kick scooter in 2000. Within six months, the company had sold over 5 million units.

“Twenty years later, all those kids are grown,” said Shave, noting that Razer has made electric versions of its scooters and ride-ons for these people.

“The Razor Icon is literally the adult version of the Kick Scooter, but it’s electric,” he said. “I just finished a show and everyone says the same thing, ‘Oh my gosh, I’m so glad they came with all these adults. I’m so glad they came, it reminds me. ..’ and they would tell me a story.”

The Razor Icon, which can reach 18 mph, retails for $600 and is part of the company’s extensive collection of items for children. There’s also the Rambler, a take on the retro mini motor-bike that looks like a Swoop bike from the ’60s and can reach 15.5 mph. It retails for $660.

Jahn pointed to Basic Fun as another example of a company turning traditionally kid-focused toys into unique items for adults. The toy maker partnered with Netflix to create a larger version of its Lite-Brite set based on “Stranger Things” that can be hung as artwork. Its cost is $100.

“And we saw that increase a lot during the pandemic because people went home and they rediscovered sports,” Zahn said.

That connection with Kalpana didn’t end with the lockdown.

In the past 12 months through the end of September, the Kidult group represented 60% of dollar growth in the industry, according to NPD’s checkout data, despite accounting for only a quarter of sales.

“So, this has been a huge windfall,” said Julie Lennett, vice president and industry consultant for NPD’s US toys practice.

Still, the stakes remain high for the toy industry as it heads into the final weeks of the year.

Inventory has been a major challenge for retailers across the board. Supply chain snafus threatened to bare shelves for holiday shoppers last year, prompting many big-box stores to hedge their bets on how much merchandise to order and receive deliveries earlier than usual. As supply chains loosened, many had excess inventory, leading to sharp discounts when demand was low.

Some companies, such as MGA Entertainment, the makers of the LOL Surprise dolls, decided to offer more items selling for less than $15 to cater to more cost-conscious parents.

CEO Isaac Larian told CNBC that the company had about 20 products that sold for between $5 and $15 last year. This year, there are over 200.

Children, on the other hand, are coveted consumers because they are often willing to spend more money on items for themselves than for others.

“Right now, adult toy buyers are the reason for the growth in the toy business,” Larian said.