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Australian Toy Market ReviewToy Cat Review 2013
1
2
3
Agenda
Market Overview
Distributor Overview
Category Review
Please be advised that all data within this presentation refers to data week 25-30
NB
All data within this presentation with a GREEN heading is sourced from NPD Consumer Monitor, referring to July 2013.
ABS Data
2.6% 2.4%1.8%
5.7%
105.7
UnemploymentRateAug
1.2%
GDPQtr End Jun
ConsumerPrice Index
(CPI)Qtr End Jun
Consumer Confidence
Aug
3.7% 5.2%
96.6
= Year ago
Q2 2013 Economic Indicators
Source: Australian Bureau of Statistics; Melbourne Institute
Real DisposableIncome
Qtr End Jun
4
PopulationDec12
1.5%
Economic Indicators
1.4
3.2% 3.6%1.9%
5.1%
-0.1%
0.1%
7.1%
2.3%4.4%
-1.8%
1.8% 1.3% 0.0%
5.3%2.6%
4.5%1.7% 0.2% 1.7%
-0.6%
3.0%1.9%3.6%
1.7% 0.3%
-3.3%
0.5%2.4%
Total Retail Sales Food Retailing Household GoodsRetailing
Clothing & SoftGoods Retailing
Department Stores Other Retailing Cafes, Restaurants &Takeaway Food
Services
3rd QTR 2012 4th QTR 2012 1st QTR 20 13 2nd QTR 2013
Total Retail Sales by Industry: National Value Growth vs. YA2nd QTR 2013
Source: Australian Bureau of Statistics
Toys
Global Toy Market Overview
2%11%
3%4%
-2%-3%
-1%4%
2%-2%
1%
PortugalAustriaPoland
BelgiumSpain
ItalyAustraliaGermany
FranceUK
USA
Total Toy Industry by Country Ranked by Market Size in U.S. Dollars at 100% of Total Toy Industry
4 markets still in decline after 7 months
Dollar Volume % Chg Market Size (MM)
$8,436
$1,603
$1318
$1,408
$511
$286
$254
$246
$223
$956
$68
Source: The NPD Group; POS Tracking Service; POS extrapolated to represent 100% coverage. Exchange rate €1 = $ 1.25 – YTD July 2013 v 12
Total Toys Cross Country Performanceby super Category
% Value change 2013 v 2012 Australia US UK France Germany Italy Spain Austria Belgiu
m Poland Portugal
Toy Market -1 1 -2 2 4 -3 -2 11 4 3 2
Action Figures & Accessories 3 -6 -8 -36 -24 -24 -8 -20 -24 -16 -21
Arts & Crafts -11 -1 -2 11 6 3 -19 17 4 -2 -13
Building Sets 4 5 -7 12 4 4 18 10 3 -1 19
Dolls -3 8 1 4 5 3 -14 14 8 13 2
Games/Puzzles -4 7 7 7 6 1 -5 15 2 5 7
Infant/Preschool 4 3 -1 10 8 0 11 17 7 4 10
Youth Electronics 35 -1 -2 2 26 5 39 75 49 4 29
Outdoor & Sports Toys 2 -2 1 2 11 -7 -5 5 8 -2 5
Plush -3 -7 -14 -14 12 -8 10 12 -6 -16 13
Vehicles -11 6 -2 -1 -4 -9 -2 3 3 -5 -1
All Other Toys -21 7 1 -3 -2 -1 9 13 3 29 -20
Source: The NPD Group; POS Tracking Service; POS extrapolated to represent 100% coverage. Exchange rate €1 = $ 1.25 – YTD July 2013 v 12
Note: In the US, that January 2012 had a 4-week period compared to January 2013, which is a 5-week period. The adjustment is consistent with the U.S.-based National Retail Federation’s (NRF) published Retailer Calendar.
Market Overview1
Total Toy Market SizeValue, Units and ARP
$217.8 $226.9 $227.0
$20.7$19.6
$22.9
$0
$5
$10
$15
$20
$25
$0
$50
$100
$150
$200
$250
$300
2011 2012 2013
ARP
Milli
ons
Total Market ARP
Units (000) 10,520 11,578 9,907
Value +4.2% +0.0%Units +10.1% -14.4%ARP -5.3% +16.9%
Change vs Prior Yr
Toy Market Seasonality
$0
$10
$20
$30
$40
$50
$60
$70
$80
$90
$100
1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51
Mill
ions
2011 2012 2013
The NPD Group, Inc. | Proprietary and Confidential
Week 1-24Units: -17.8%Value: -2.7%
Toy CatUnits: -14.4%Value: +0.1%
Q: Where were these items purchased?
Retailer’s share on consumption
17.1%
20.7%
14.2%
14.4%
9.1%
11.1%
6.1% 6.5%
0%
5%
10%
15%
20%
25%
Jul-12 Sep-12 Dec-12 Apr-13 Jul-13
Big W
K Mart
Target
Toys"R"Us
17.1%
14.2%
9.1%
6.1%
2.4%
1.1%
20.7%
14.4%
11.1%
6.5%
2.3%1.8%
0%
5%
10%
15%
20%
25%
Big W K Mart Target Toys“R”Us Myer David Jones
Jul-12 Jul-13
Retailers Share Share Trends
Big W outperformed Kmart
Big W outperformed in July-13Source: NPD Consumer MonitorPeriod: Jul 2013
Retail Store was flat compare to last yearOnline sales growing steadily over the year
Source: NPD Consumer MonitorPeriod: Jul 2013
77.5%
14.5%
3.5%4.6%
Retail Store
Online
Catalog or Mail Order
Other
76.9% 76.1%78.6%
75.8% 77.5%
13.8%15.6% 14.3% 15.8% 14.5%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
Jul-12 Sep-12 Dec-12 Apr-13 Jul-13
Share TrendChannel Share
Mkt. Size: $283M
Who and what are they buying online?
Retail Store vs. OnlineSource: NPD Consumer MonitorPeriod: Jul 2013
20.4%
16.3%
11.0%
11.0%
8.2%
7.4%
5.9%
5.5%
5.4%
4.9%
4.0%
Outdoor & Sports Toys
Infant & Preschool Toys
Building Sets
Dolls
Arts & Crafts
Electronic toy
Vehicles
Action figures
Other toy
Stuffed toy or puppet
Game or puzzle
Value %
16.2%
12.5%
11.1%
7.3%
6.3%
8.1%
9.9%
9.1%
8.0%
5.2%
6.4%
Outdoor & Sports Toys
Infant & Preschool Toys
Dolls
Building Sets
Arts & Crafts
Electronic toy
Vehicles
Other toy
Action figures
Stuffed toy or puppet
Game or puzzle
Value %
15% 26% 18% 14% 27%
Expenditure by Age Group
16% 30% 20% 22% 13%
Retail Store Online
Expenditure by Age Group
Retail store lost mid-age group shoppers
more elder shoppers
Boys
Gender Market Size & Trends - BoysBoys - Building Sets, Vehicles, Action Figures
$55.4 $59.6 $59.9
$0
$5
$10
$15
$20
$0
$10
$20
$30
$40
$50
$60
$70
2011 2012 2013
Total boys ARP
$14.3
$28.8
$16.5$14.6
$31.3
$14.0
Action Figures Building Sets Vehicles
2012
2013
+9%
Market Size Category performance
+2% -15%
Units (000) 2,295 2,434 2,281
Value +7.4% +0.5%Units +6.1% -6.3%ARP +1.3% +7.3%
Change vs Prior Yr
Without Lego
Friends…
-$3.9m
-2.5%-9%
+3%
What’s selling for boys?Rank Property Category
1 CITY Building Sets2 TEENAGE MUTANT NINJA TURTLES Action Figures & Acc3 STAR WARS Building Sets4 HOT WHEELS Vehicles5 CREATOR Building Sets6 DUPLO Building Sets7 DC UNIVERSE Building Sets8 DISNEY TOY STORY Action Figures & Acc9 STAR WARS Action Figures & Acc10 TRANSFORMERS Action Figures & Acc11 CHIMA Building Sets12 TECHNIC Building Sets13 MEGA BLOKS Building Sets14 DISNEY CARS Vehicles15 IRON MAN Action Figures & Acc16 BRICKS & MORE Building Sets17 LONE RANGER Building Sets18 SPIDERMAN Action Figures & Acc19 MARIO BROS Vehicles20 TONKA Vehicles
*Building Sets “Friends” removed
Skylanders*:Units: 0.4mValue: $5.5mAvP: $11.88
* NPD Games data has a market coverage of 98%, hence it is not directly comparable to Toys data.
Girls
Gender Market Size & Trends - GirlsGirls -
Arts & Crafts Dolls
2012
2013
-5%
Market Size Category performance
-8%
$37.6$41.2 $38.8
$15.8 $15.2
$17.3
$0
$2
$4
$6
$8
$10
$12
$14
$16
$18
$20
$0
$5
$10
$15
$20
$25
$30
$35
$40
$45
2011 2012 2013
Total girls ARP
Arts & Crafts, Dolls
Units (000) 2,381 2,705 2,248
Value +9.6% -5.8%Units +13.6% -16.9%ARP -3.6% +13.3%
Change vs Prior Yr
+$3.9m
-2%-15%
+ Lego Friends
+$2.5m
+1%-13%
+ Furby & Fijit Friends
What’s selling for girls?Rank Property Category
1 BARBIE Dolls2 MONSTER HIGH Dolls3 LALALOOPSY Dolls4 DISNEY PRINCESS Dolls5 CRAYOLA Arts & Crafts6 MY LITTLE PONY Dolls7 CABBAGE PATCH KIDS Dolls8 PLAY-DOH Arts & Crafts9 BABY BORN Dolls
10 LITTLEST PET SHOP Dolls11 DISNEY FAIRIES Dolls12 BABY ALIVE Dolls13 GELEEZ Arts & Crafts14 DORA THE EXPLORER Dolls15 BLINGLES Arts & Crafts16 CREATIVITY FOR KIDS Arts & Crafts17 FABER CASTELL Arts & Crafts18 INKOOS Arts & Crafts19 MOXIE Dolls20 DISNEY PRINCESS Arts & Crafts
Rank YA
5
22
Infant & Preschoolers
Gender Market Size & TrendsInfant & Preschooler
Infant & Preschooler -
$48.4
$11.3
$49.6
$13.2
Infant/Preschool Toys Plush
2012
2013
+17.1%
Market Size Category performance
+2.5%
Infant & Preschool, Plush
$58.3 $59.7 $62.8
$0
$2
$4
$6
$8
$10
$12
$14
$16
$18
$20
$0
$10
$20
$30
$40
$50
$60
$70
2011 2012 2013
Total I&P ARP
Units (000) 2,764 2,878 2,625
Value +2.3% +5.3%Units +4.1% -8.8%ARP -1.8% +15.4%
Change vs Prior Yr
Rank Property Category
1 FISHER PRICE Infant/Preschool Toys
2 LEAPFROG Infant/Preschool Toys
3 THOMAS & FRIENDS Infant/Preschool Toys
4 FURREAL Plush
5 VTECH Infant/Preschool Toys
6 LITTLE TIKES Infant/Preschool Toys
7 PILLOW PETS Plush
8 DINOSAUR TRAIN Infant/Preschool Toys
9 OCTONAUTS Infant/Preschool Toys
10 DISNEY MONSTERS INC Plush
11 PEPPA PIG Infant/Preschool Toys
12 BRIGHT STARTS Infant/Preschool Toys
13 DISNEY PRINCESS Infant/Preschool Toys
14 DISNEY MINNIE MOUSE Infant/Preschool Toys
15 DISNEY JAKE AND THE NEVER LAND PIRATES Infant/Preschool Toys
16 KIDKRAFT Infant/Preschool Toys
17 PLAYGRO Infant/Preschool Toys
18 CRAYOLA Infant/Preschool Toys
19 PLAYSKOOL Infant/Preschool Toys
20 LAMAZE Infant/Preschool Toys
What’s selling for Infant & Preschoolers?Rank YA
Other Toys
Gender Market Size & Trends - OtherOther -
$12.2 $10.6
$39.5
$4.2$9.9 $10.0
$40.2
$5.4
All Other Toys Games/Puzzles Outdoor &Sports Toys
YouthElectronics
2012
2013
Market Size Category performance
-18.4%
Games/Puzzles, Outdoor & Sports, Youth Electronics, All Other Toys
$66.4 $66.5 $65.5
$21.5
$18.7
$23.8
$0
$5
$10
$15
$20
$25
$0
$10
$20
$30
$40
$50
$60
$70
2011 2012 2013
Total Other ARP
Units (000) 3,080 3,560 2,754
Value +0.2% -1.5%Units +15.6% -22.6%ARP -13.3% +27.3%
Change vs Prior Yr
-6.3% +1.8% +29.3%
Rank Property Category
1 ACTION Outdoor & Sports Toys2 LITTLE TIKES Outdoor & Sports Toys3 NERF Outdoor & Sports Toys4 RAZOR Outdoor & Sports Toys5 TRASH PACK All Other Toys6 FURBY Youth Electronics7 DISNEY CARS Outdoor & Sports Toys8 FIJIT FRIENDS Youth Electronics9 SMART TRIKE Outdoor & Sports Toys10 MONOPOLY Games/Puzzles11 FISHER PRICE Outdoor & Sports Toys12 INTEX Outdoor & Sports Toys13 SPYNET Youth Electronics14 DISNEY PRINCESS Outdoor & Sports Toys15 THOMAS & FRIENDS Outdoor & Sports Toys
16 TEENAGE MUTANT NINJA TURTLES Outdoor & Sports Toys
17 AIRWALK Outdoor & Sports Toys18 DORA THE EXPLORER Outdoor & Sports Toys19 ZURU Outdoor & Sports Toys20 DISNEY FAIRIES Outdoor & Sports Toys
What’s selling in other toys?
$5,361$2,910
$2,348$2,016
$1,908$1,733
$1,583$1,517
$1,437$1,368$1,339
$1,131$1,070
$989$947$933
$733$749
$831$855
$1,024$1,207
$1,300$1,320$1,324
$1,453$1,584
$2,028$2,049
$2,165$2,313
$3,906
Teenage Mutant Ninja TurtlesDisney Monsters Inc
Monster HighDisney Minnie Mouse
Peppa PigFriends
Little TikesFurby
Jake And The Never Land PiratesDespicable Me
ChimaLalaloopsy
Lone RangerDisney Princess
Iron ManOne Direction
BatmanMaxi
Littlest Pet ShopSesame Street
Thomas & FriendsDisney Toy Story
Fisher PriceDora The Explorer
Pillow PetsBarbie
LeapfrogNinjago
Star WarsNerf
Disney CarsSpiderman
Thousands
The NPD Group, Inc. | Proprietary and Confidential
71 properties gained over $100K
75properties lost over $100K
Shakers & Movers - Properties2012 vs. 2011 – Value
Price Points
$11
$12
$13 $13 $13
$20
$16
$13 $13
$14
$17
$19
$14
$15
$16$15
$16
$22
$21
$10
$12
$14
$16
$18
$20
$22
$24
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
2012 2013
The NPD Group, Inc. | Proprietary and Confidential
Toy Market – Average Price Trends
Average price spent in retailer
Most retailers are moving away from the trend of lower AVP
Source: NPD Consumer MonitorPeriod: Jul 2013
$17.2
$17.85
$19.1
$15.3
$17.19 $17.5
$18.2 $18.88
$22.6
$21.1
$26.9
$21.7
$0
$5
$10
$15
$20
$25
$30
Jul-12 Dec-12 Jul-13
AVP
Big W
K Mart
Target
Toys “R” Us
Average price spent in retailer
Average price gap closing among majors
Q: Primary reason you chose this retailer?
It’s not just about price anymoreSource: NPD Consumer MonitorPeriod: Jul 2013
20% 19%
15% 16%
12% 15%
16% 11%
11%11%
Jul-12 Jul-13
Other
Had a special offer/sale/promotion
Has the lowest prices
Has good choice of brands andproducts
Good overall value for the price
Convenient location
Primary reason you chose this retailer
It’s not just about price anymoreSource: NPD Consumer MonitorPeriod: Jul 2013
19%23% 25% 22% 20% 21% 19% 16% 16%
16%
17% 13%15% 18% 16% 19%
12% 15%
13%
11%10% 9%
13% 12% 12%
22%24%
13%
15%15%
24%20%
12% 8% 10%
8%
11%
11%11%
9% 7%22%
19% 17% 12%
Other
Had a special offer/sale/promotion
Has the lowest prices
Has good choice of brands andproducts
Good overall value for the price
Convenient location
Primary reason you chose this retailer
Moving away from all-year-round sales
Sales concentrating in sales period this yearSource: NPD Consumer MonitorPeriod: Jul 2013
Was the item on sale?Retail Store purchaseValue % sold on promo
0%
10%
20%
30%
40%
50%
60%
Apr-12 Jul-12 Sep-12 Dec-12 Apr-13 Jul-13
% on sale
Shoppers held back until sales seasonSource: NPD Consumer MonitorPeriod: Jul 2013
45.0%
26.1%
10.6%
4.0%
14.3%
40.8%
29.3%
11.6%
3.8%
14.5%
Jul 2013
No Special Occasion
Birthday
Christmas
Birth or Adoption of Baby
Other
Purchased for what occasion
Jul 2012
As promo concentrate in sales period this year
Shoppers held back in until Toy Cat
Toy Trends 2013
What’s the trend? - boysAction Figures
TMNT $2.9m
+
Action Role Play
Battling Toys
Monsuno $0.14m SW Angry Birds $0.2m Chima $1.3m
Beyblade $1.9m (2011)
≠
Vehicles
2011 2012 2013
Evergreen
Can bring up the category again?
Video Games
$5.5m*NPD Games = 98% coverage
What’s the trend? - GirlsPlush
Craft kits Dolls
Barbie -$1.2m
Interactive toys
Boys + Girls + Preschoolers!
Playsets / building sets
Boys Girls Preschoolers
Licenses!
31% 31% 34%
TC 2011 TC 2012 TC 2013
non-licensed
licensed
Infant/Preschool Toys + $ 3.3m
Outdoor & Sports Toys + $ 0.7m
Building Sets - $ 1.1m
Dolls + $ 0.2m
Action Figures & Acc + $ 0.6m
Vehicles - $ 1.3m
Plush + $ 3.9m
Arts & Crafts - $ 0.1m
Games/Puzzles - $ 0.4m
All Other Toys - $ 0.3m
Youth Electronics - $ 0.4m
Declined from Star Wars, though grew in non-license
Outlook for Christmas
• PS4 and Xbox One gaming console to be launched in Q4 2013
• iPhone 5s & 5co Launch event Sept 10
Outside of Toys….2013
• Disney Infinity o New video game release in Aug 2013o Toy figurines cross-over game
first week of sales Units Value
2011 wk 41 Skylanders Spyros Adventure 23,171 $945,800
2012 wk 42 Skylanders Giants 160,111 $5,033,5602013 wk 34 Disney Infinity 97,397 $3,077,869
2013 without lay-by with long-life low prices
• Lasting 6 months through to Christmas• Majority of toys being Kmart branded• Promoting everyday low price• No Christmas lay-by
Kmart 6 months catalogue
19%
20%
20%
21%
21%
22%
22%
23%
23%
24%
24%
Jul-12 Dec-12 Jul-13
Big W
K Mart
Good overall value for price/ lowest price
Shoppers perception on Kmart’s price offer has declined Source: NPD Consumer MonitorPeriod: Jul 2013
228.2229.0221.5
250.1236.4
205.6
389.4388.3390.3374.9366.2
0.3%-0.5%4.1%2.4%
0
50
100
150
200
250
300
350
400
450
2008 2009 2010 2011 2012 2013
Mill
ion
Toy Cat (Weeks 25-30) Christmas (Nov-Dec)
Trend Toy Catalogue - Prediction For Christmas
Value change %
Units (million)
% chg Units
17.3% 9.1% 7.3% -7.4% -0.3%
9.2 18.6 10.2 20.1 11.1 22.4 10.6 22.0 11.6 21.3 9.9
10.1% 7.6% 9.4% 11.7% -4.6% -1.7% 9.6% -3.2% -14.5%
-1%
-15%
2013
Summary of Toy Catalogue Period
• Demand for toys was weak for Toy Cat 2013, units were down a heavy 14.4%. Higher average price of 16.9% was only able to push the value sales into a flat growth.
• Boys Toys (excluding Lego “Friends” in building Sets) saw single digit units and value decline. Vehicles were behind the decline, value down 15%. While Building Sets and Action Figures enjoyed value growth of 3% and 2% respectively.
• Girls Toys were down in both units and value despite the higher average price. With Lego “Friends” (+$3.9m), “Fijit Friends” and “Furby” (+$2.5m) included, value growth would result in a positive 1% growth while units will still be in decline.
• Infant & Preschooler Toys enjoyed 5.3% value growth while units were down 8.8%. Both Infant/Preschool Toys and Plush were behind the growth.
• For the Other toys sector, units dropped a heavy 22.6%. Value was down 1.5% despite the growth in average price. All Other Toys and Games/Puzzles were behind the decline while Youth Electronics and Outdoor Sports Toys saw growth.
• Fisher Price still holds the top property ranking however suffered YOY decline. Barbie and Star Wars in 2nd and 3rd place also recorded double digit declines.
• Top absolute value adding properties were ‘Teenage Mutant Ninja Turtles’, ‘Disney Monsters Inc’, ‘Monster High’, ‘Disney Minnie Mouse’ and ‘Peppa Pig’. While properties suffered the most declined were ‘Spiderman’, ‘Disney Cars’, ‘Nerf’, and ‘Star Wars’.
• While under $30 was the growing area last year, this year Toy Cat these price bands suffered the most decline. And with the increase in average price of toys above $30 price bands all enjoyed growth, in particular the $30-40 which gained the most dollar.
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