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Kids Get Their License

Kids Get Their License

Kids are an important target market for the licensing industry, and their influence is keenly felt across a number of categories—especially in the latter half of the year when parents open up their wallets for back-to-school

Kids are an important target market for the licensing industry, and their influence is keenly felt across a number of categories—especially in the latter half of the year when parents open up their wallets for back-to-school must-haves, followed by the crucial holiday selling season.

A new NPD report, Kids Cross Category Purchases–July 2010, shows that during back-to-school, apparel and footwear captured the biggest portion of spending against kids, and licensed product accounted for 26 percent of total dollar sales. Top licenses for kids during this timeframe included Disney Princess, Dora the Explorer, Star Wars and Toy Story.

While licensed goods represented 26 percent of sales overall, purchases made for kids ages 3 to 5 were much more heavily weighted toward licensed products.

The news is promising for the kid-dominated toy category. The U.S. toy industry generated more than $9 billion in sales in the year-to-date July 2010, a sales figure that is flat compared with last year. Building sets posted the biggest increases across toy segments hitting $466 million, an increase of 17 percent over the same period a year ago. Dolls saw the second-biggest gains with $935 million in sales, an increase of 8 percent.

Based on overall sales numbers, the industry is holding its own—positive news as it heads into the all-important fourth quarter, when 50 percent of annual sales are typically realized. Licensed toy sales generally comprise about one-quarter of total toy sales.

As of October 2010, NPD will begin tracking spending on kids ages 0 to 14 across categories and retailers every week. Categories will include the ones listed in the charts above, as well as books, Halloween costumes, arts and crafts and consumer electronics.

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