We’ve looked at figures recently released by some of the top US children’s toy companies for the Christmas 2014 period. While everyone predicted sales would be a little higher during that time, nobody expected that records would be broken. What is the blame for the increase in sales and profits? That is what we hoped to find out. After speaking with representatives from some of the country’s top brands, it became clear the economy was not the only reason. They claimed there were a number of other factors that helped to improve the situation. We’ll talk you through all of them now.
While sales are not as high as they were prior to the 2008 financial collapse, a recovering economy is behind at least some of the improvements. Last year, parents buying presents for their children admitted to spending more than they did at any point since the economic downturn. So, it makes sense that toy companies have seen the benefits. Will that process continue in the future? So long as the economy remains in a suitable state, we predict it will.
Higher consumer confidence
A better economy means there is more cash in the pockets of working people. However, it doesn’t always mean they are willing to spend that money. Consumer confidence is also on the rise, and that has been deemed one of the main causes for the increase in toy sales. Manufacturing, on the whole, has slowed recently across the board. That isn’t affecting the top children’s toy companies though. They are beginning to thrive much like they did prior to the 2008 collapse.
The toy companies themselves have actively played a role in increasing profits. They didn’t do that by spending more on marketing though. They did it by reducing the costs involved in producing their items. Some of the biggest brands admitted to outsourcing many of their processes abroad. That meant they could get the same amount of work done for a fraction of the cost. It is expected that trend will continue as we move forward into 2015.
Children’s toy companies realized that offering better training for their staff would help to limit errors. It would also assist in increasing productivity. They weren’t wrong. By sending their teams on cutting-edge scientific injection molding courses, they saw excellent results. Productivity experienced a boost of around 30%. That meant there was no need to employ extra workers to handle the Christmas rush. No extra workers means no extra expenditure.
It might sound like a minor factor, but childbirths in the US have been rising steadily since around 2001. That means there are more children to purchase presents for. While that fact won’t account for a significant rise, it does provide some clue as to why the industry is booming once again. No parent can resist buying their child the latest toys at Christmas.
As you can see, there are many different factors at play here. It is impossible to predict if the children’s toy market will be thriving quite as impressively come December 2015. However, things are most looking good for the future. Well done to all the companies involved!