The NPD Group’s report also found that licensed sales shift from toys to video games as children get older.
Video games and electronics make up 22 percent of sales of kids’ licensed products in the U.S., a number that is on par with the volume represented by toys, according to The NPD Group’s U.S. Kids’ License Report.
The study also found that toys, which is the No. 1 licensed segment at most retailers, represent the largest share of licensed sales among young children, representing more than one-quarter of dollar sales for kids ages 2 to 5; however, that percentage shifts with older children as video games and electronics gain more prominence. For example, among boys ages 10 to 14, video games alone garnered 27 percent of sales, while toys garnered 14 percent of licensed sales. The share also increases substantially among girls as they get older.
“Kids seek engagement with a character, sport or personality they love in many, if not most, facets of their lives–from the clothing they wear, to the school supplies they use, and toys and games they play with,” says Juli Lennett, senior vice president and U.S. toys industry analyst, The NPD Group. “While licenses remain important to kids throughout the phases of their youth, they are engaging with licenses in new and different ways as they get older, and simultaneously become more technologically mature. Technology in the form of video games, electronics and mobile apps poses an opportunity to extend the life of a license among kids where it makes sense.”
In terms of purchasing merchandise, the majority of kids’ licensed purchases are made in-stores; however, online sales represent more than one-third of total sales across a number of industries including video games (39 percent), apps (38 percent) and electronics (33 percent). Thirty-one percent of toy sales are also made online.
“There are many variables and moving parts when it comes to licensing out a property, which means there is not one formula for success,” says Lennett. “This presents an opportunity for retailers to more strategically merchandise their licensed products and diversify their offerings, giving consumers an easy opportunity to buy deep into the license. The online platform in particular is well-suited for this bundling strategy allowing consumers to buy across categories in one place, and keep them engaged in the license.”