The Toys and Games Sector – Growing up Fast
Play will never go out of style.
Overall, Statista figures show that the UK Toys and Games market has experienced strong and consistent growth since 2015, expanding year-on-year from $4 billion to an expected $5.2 billion in 2023, with plenty more to come.
And it’s not just the kids who want to be entertained.
Thanks both to Covid and social media, the “kidult” trend (where adults buy toys and games for themselves and other adults) has provided a new focus for Sellers in this resilient sector, with teen and adult buyers over 12 now accounting for 25%+ of overall UK sales, according to NPD Group.
But what about the split between traditional retail outlets and online sales channels?
Digital purchases have surged in recent years, and are expected to account for 55% of all total sales by 2025 – a whopping rise from the 30% attributed to online channels in 2017.
So there’s no doubt that this is an exciting sector for Sellers.
A heady combination of constantly changing consumer trends, accessible purchase prices, intense competition and rising demand for eco-friendly, collectable, nostalgic and STEM toys means there is a good deal of revenue promise moving forwards.
And of course, thanks to its product scope and sheer convenience, Amazon is riding high among the online sales channels.
Amazon and the Toys and Games Market
Like so many other categories (including Health and Beauty, see our Sector Insight here), Amazon’s position as a leading sales channel for the Toys and Games industry was heightened still further by the pandemic.
Post-pandemic, the allure of shopping online for toys and games remains, thanks to its superior convenience, ease of purchase and – for parents – the ability to dodge the experience of taking a child to a toy store!
And Amazon of course can trump the competition on accessibility, competitive pricing, popular discount events and ease of returns.
In 2022, just 3 online stores took around 40% of the market share in the UK Toys and Baby market.
Of them, Amazon was the leading channel, its revenues of $768 million beating both argos.co.uk ($697.9 million) and sainsburys.co.uk ($531 million) into second and third place respectively.
And this remains a highly popular category for Sellers on Amazon, taking third spot behind Homes & Gardens and Beauty & Personal Care.
The Shape of the Toys and Games Sector on Amazon UK
There’s no doubt that this is a fiercely competitive Amazon sector – but it is also huge in terms of its niche potential, with plenty of seasonal and trend-led opportunities for brands of all shapes and sizes.
Overall, the sector sees clear sales spikes around Black Friday/ Christmas and Prime Day events, but purchasing in most categories stays strong year-round, with Amazon data suggesting that almost a third of customers return within relatively short periods of time to buy within the sector again.
In terms of volume, 30-35 million people searched and bought a toy on Amazon UK in 2022 – a 2% rise on the previous year.
And 32% of Toys and Games shoppers purchased from 2 or more categories within the sector in Q1 2023.
Big Name Players
With major players like Lego, Mattel, Pokemon, Hasbro and Disney in the mix, it’s no surprise that the top listings in certain categories are dominated by these bigger brands – Lego, for example, accounted for 91.7% of sales in the building sets category through our 30-day analysis.
Amazon data suggests that more than a third of Toys and Games shoppers come to the marketplace with a particular brand or product in mind – and larger brands clearly benefit from this.
For the big brands, further growth comes down to three things:
- Defending the strength of their own-brand position against the competition.
- A robust brand protection strategy that counters reseller activity.
- Driving category dominance through a strong, Amazon-specific strategy that’s designed to cannibalise the market share of their direct competitors.
But big brand domination is certainly not the whole picture.
For smaller Sellers and challenger brands, exciting opportunities lie within the sector’s many niches.
Our analysis of search terms revealed that, even though the top brands have excellent search volume, there are still plenty of generic searches being undertaken.
This suggests that people aren’t always simply going after the top brands – there are plenty of broader requirements that can be met by Sellers whose attractive listings grab, keep and convert buyers’ attention.
What was also revealed by our 30-day analysis is just how seasonal and trend-driven this whole category is.
Many sub-categories see an obvious spike in sales around Christmas time and Prime Day, with steadier revenues through the remainder of the year.
But those seeking to bolster their revenue streams with sales all summer long can look to the potential of seasonal products as their saviour.
For example, our 30 day analysis covered the month of June, a time when many are getting ready for family holidays.
Consequently, our results highlighted strong revenues for some very niche brands – like Free Swimming Baby and LAYCOL, who both sell baby swim floats.
Each hit 3% of the overall market share for the entire category in the period, producing revenues of £1.5 million for Free Swimming Baby and £1.1 million for LAYCOL’s cheaper alternative.
The “Kidult” market
And let’s not forget the sector’s biggest recent growth trend – the rise in “kidults” buying toys and games for themselves and others over the age of 12.
With revenues in excess of €4.6 billion in 2022, kidult purchases of toys, games and collectables have more than doubled since 2019 across the UK and EU Top 4 (France, Germany, Italy and Spain), with the UK, France and Germany seeing the biggest buying figures.
The top Seller in our 30-day analysis?
It was the brand Magic: the Gathering, whose range of collectable trading cards generated over £9.6 million in revenues over 30 days, effortlessly smashing the sales figures of massive brands like Pokemon (£3.8 million) and Lego (£2.5 million).
The kidult trend is fantastic news for Sellers of all sizes.
Since 2019, there has been a relative stagnation in sales of toys and games for children, driven partly by our ageing populations and smaller households.
So the potential to sell to a massive market with no age restrictions and plenty of disposable income at their fingertips presents huge opportunities for growth to brands.
Selling Models for Toys & Games on Amazon
For the most part, toys and games are simple to store, easy to ship and have clear sales patterns through the year that should make inventory management relatively painless.
Larger brands selling directly through Amazon will have their own logistics networks to take advantage of, as demonstrated by our data, which shows that 210 of the top 500 Amazon listings use FBM (Fulfilled by Merchant) as their selling model.
But, for smaller and challenger brands, our opinion is that it would be crazy in such a competitive category not to take advantage of the many benefits offered by Amazon Prime.
For small to medium sized businesses then, our fulfilment recommendations are either FBA (Fulfilled by Amazon) or SFP (Seller Fulfilled Prime).
Because Amazon Prime’s many benefits – from rankings advantages and increased conversion rates to next-day shipping – are an advantage you shouldn’t allow your competitors to have over you.
And why FBA?
Because FBA Sellers have much greater control over the crucial technical side of Amazon, allowing them to optimise listings to their fullest extent.
And, in an incredibly competitive sector like this, full optimisation isn’t just important – it’s absolutely fundamental to your success.
FBA Sellers also have access to the “Small and Light” scheme which, for Sellers with toys and games that qualify, brings cost reductions, promotional opportunities, added visibility and the opportunity to boost your brand’s profitability, something which should be every business’ ultimate aim.
Big Brand Market Share
It will come as no surprise that the big toy and game companies dominate their niches within this sector; the likes of Lego, Disney and Pokemon able to bring their vast budgets and brand recognition to bear on any platform.
However, as we discussed in the previous section, a top-down look at overall sector activity in June did produce some surprising results.
Our analyses show some unexpected brands sitting high within the top 10 revenue earners:
What can we take from this?
These figures underline just how diverse this sector is – in fact, over our 30 day analysis, the top 500 listings fall into a massive 53 different categories.
They demonstrate how it’s possible for smaller and challenger brands to achieve strong sales success within very specific categories, especially ones which are seasonally attractive.
And they show opportunities for the big brands to push an Amazon-specific strategy…
… one that should include a strong element of brand protection.
With many large brands offering licences to resellers, we do see a great deal of dilution as those resellers pull sales away from the brand – Pokemon (below) being a prime example.
While more sales are clearly good news, the use of Resellers can bring not only a dilution of revenues, but there is also the chance of reseller activity causing damage to the parent brand’s reputation by association – for example, by sending damaged goods, providing poor customer care or overpricing items.
This means that a robust protection strategy is a must for larger brands looking to improve their Amazon presence.
Need expert help to create a strong strategy? Speak to our specialists today
Spotlight on SubCategories
From our in-depth analysis of the top listings in the sector, we’ve identified two subcategories within Toys and Games which demonstrate particularly strong search volume and revenues year-round – plus one which has spiked through late spring and early summer:
- Toddler Toys
- Board Games
- Outdoor Games
In our analyses, 30-day UK revenues for the Toys and Games category were £66.3 million, of which:
- Toddler Toys took revenues of £1.4 million
- Board Games took revenues of £1.3 million
- Outdoor Games took revenues of £655k
Why have we included outdoor games?
Because we want to highlight one of the sub-categories where seasonal revenue potential transcends the obvious sales spikes that occur in this sector in the run up to Christmas and over July’s Prime Day event.
And we ran our 30-day analyses in June to show that sub-categories with promise, like Toddler Toys and Board Games, are still pulling in plenty of sustainable sales volume and revenues for brands of all sizes.
- The top 100 listings include an impressive 62 different brands – so although there are some big brand names in there, it’s clear that there is room for challenger brands and more seasonal products.
- In fact, within the top 10 listings by revenues, a number of lesser-known names are seeing success in this period – like KinderKraft (No4 – £70k), KandyToys (No5 – £52k) and Peterkin (£39k).
- Average revenues over our 30-day, non-peak period? The bestseller averaged just over £70k, and it’s still good news for those lower down the rankings. Positions 2-10 averaged £45k, and positions 11-25 £22k.
- This underpins our findings from our search volume analyses, namely that there are still plenty of generic searches being undertaken This suggests that many people don’t simply go after the top brands – they just want the right product.
- While search demand significantly peaks during the winter months and over Prime Day as you’d expect, there is good volume through the whole year.
- No surprise that major players like Hasbro, Mattel, Ravensburger and Big Potato are topping the charts here, with over a third of the revenue share between the four names – but the inclusion of a good variety of other brands shows that this is a category with promise for strong challengers and smaller brands.
- Challenger brand Cryptic Killers, with 11% of the share, actually have only one listing – yet they’re the top revenue earners in this subcategory over this 30-day period, with sales close to £155k.
- This is a category where listings of all ages perform well, from 5 years old to those launched in the last 12 months. The second best selling listing has only been live for 268 days and has earned over £80k in the last 30 days.
- With the bestseller’s sales figures hitting £154k in just 30 days for products averaging £20 (and average revenues for the top 2-10 of £46k) this is a sub-category with the potential for good revenues even away from its Oct-Dec peak.
- Again, here’s an example of a sub-category where generic searches are winning out – in fact, we were hard-pressed to easily recognise many of the brand names in the top 20 listings.
- With 49 different brands in the top 54 listings and average 30-day revenues for the top 2-10 of £30k, this is a sub-category with opportunity for all.
- The 3rd bestseller in our 30 day period? Water balloons. This unassuming product achieved revenues of £42k in June, having only been listed on Amazon for just over a year. And it’s not alone – other top listings that are performing strongly also have listings that are less than 365 days old.
- For those looking for a sub-category with a longer Summer peak, this is the one! As shown below, we see two big spikes as we move into Summer and again around Prime Day. And, while the key peak falls after the summer holidays, there is still good search volume from Spring onwards…
- … not to mention the potential for expanding into international markets to boost those sales over a longer period.
Interested in exploring European expansion? Watch our expert webinar
Key Market Trends
- While this is a highly competitive sector, there are dozens of sub-categories that provide niche potential for brands to thrive.
- The fact that consumer trends in Toys and Games are constantly in flux means that agile Amazon brands using accurate, real-time data to keep their fingers on the pulse are in a fantastic position to take advantage of new opportunities.
- This sector is highly seasonal, with its sub-categories generally experiencing a big spike from October through to December as Black Friday, November sales and Christmas unfold.
- However, there is also potential to bolster annual revenues with listings geared towards the warmer months – outdoor toys and games, pools and baby swimming aids all featuring strongly in our analyses through June, with Bestway achieving £2.2 million in revenues from their selection of paddling pools through the summer heatwave, and Free Swimming Baby and LAYCOL both hitting £1m+ revenues for their baby flotation devices as we enter the summer holiday season.
- It’s not just about the big brands. In the top 90 listings, there are 54 different brands. Alongside big names like Crayola, Lego and Barbie, some smaller Sellers are doing extremely well.
- Well-known brands have a significant volume of sales because people directly search for them on Amazon – for example, Lego had over 216,000 searches over our 30-day analysis period alone in the UK. But our analyses for some sub-categories show that generic searches also feature strongly, suggesting that in some areas, people don’t care about brand names – they just want the right product.
- There are a significant number of reseller listings in this category due to licences granted by big brand names. This means that these larger companies need to factor robust brand protection efforts into their wider Amazon strategy.
- The trend for teens and adults buying toys and games presents a massive opportunity for brands across this sector, with data suggesting that this is not just the key growth area here in the UK, but also across Europe.
- Collectable card brands show a very strong presence within this category through our analysis, with brands which appeal to kids and kidults alike – and the kidult collectors are leading the way!
- Although many of the listings we’ve analysed are on the right track to having good listings – some already have A+ content, for example – there is still lots of room for brands to move towards full optimisation that helps them stand out for both buyers and the Amazon algorithm.
- Strong reviews are a big part of a successful listing – but they’re not the whole picture. Brands can also seek plenty of potential for growth by improving their listings’ detail – like incorporating high-level infographics and in-depth product use information.
- Video is a winner. Amazon says that shoppers who watch videos are 3.6x more likely to convert than non-viewers.
- There is no denying that PPC is one of the most powerful tools available to Sellers looking to stand out and succeed in this sector – and not just for targeting the market share of competitors. Amazon suggests using Amazon Ads to upsell and cross-sell your own products, targeting your own listings to do so.
- Amazon data also shows that clever combinations pay when it comes to designing your PPC strategy. Advertisers who use a combination of Sponsored Brands video and custom image ad formats saw a massive 6.1% increase in conversion rates.
Our brilliant PPC experts are on hand to put a rocket up the bottom of your Amazon Ads strategy – click here to get in touch
Our Tips for success in Toys and Games on Amazon UK
This is a diverse, dynamic and exciting market.
While competition is fierce and the big brands are dominant in their own sub-categories, this is a sector whose promise comes from its endless niches, the constant flux of consumer trends and strong seasonal purchasing swings that transcend the normal Christmas rush.
And yet our 30-day, off-peak analyses show that brands of all shapes and sizes are making good money year-round in some of the key sub-categories and, with a vast number of Seller names featuring in the top 100 listings in all the categories we’ve looked at, there are lots of opportunities for growth potential.
For the big brands, this tough category is one which needs complete investment.
As well as defending existing market share from all comers, many must also work hard to protect their brand against any reseller activity that might impact their sales and their reputation by association.
Growth will be reliant on being good at all aspects of Amazon, with a strong, marketplace-specific strategy that melds organic optimisation and PPC to drive further category dominance by making the most of existing brand loyalty and cannibalising the market share of their direct competitors.
And of course, it’s key to ensure that every penny of profitability is squeezed from sales activity (read our top tips here).
For smaller, challenger brands, there is real potential to take a slice of the market share pie by drilling down into the opportunities on offer through sub-categories and consumer trends and combining a smart product offering with a strong, holistic Seller strategy that excels at everything Amazon.
Here are some of our expert team’s best tips to help you drive sales and revenues in the toys and games sector.
Optimise, optimise, optimise
In such a crowded sector, your listings don’t just need to stand out in the search – they need to do absolutely everything perfectly.
Amazon’s own data says that two-thirds of your potential buyers will be influenced by what they see on the screen, as opposed to coming to their search with their minds made up as to which brand they’ll buy – and this is your chance to convince.
So yes, reviews are crucial – especially for smaller and challenger brands because, without the benefit of immediate brand recognition, potential buyers will head here for a sense of your product’s trustworthiness and quality.
But of equal importance are your images, your product descriptions, your keywords, your A+ content, your storefront, your Amazon Ads strategy.
Amazon data suggests that stores with 3+ pages have an 83% higher shopper dwell time and 32% higher attributed sales per visitor.
And regularly revisiting your listings can pay off handsomely – stores updated within the last 90 days of Amazon’s research were shown to have 21% more repeat visitors and 35% higher attributed sales per visitor.
Optimisation is an obvious but real opportunity in this sector – in compiling this piece, we’ve seen many listings for brands big and small that offer lots of room for improvement.
So ticking all the optimisation boxes is a key part of gaining the competitive edge your brand needs to boost your Amazon success.
Look for the niches
This isn’t a sector where you have to win an entire category to see success.
With a vast array of choices on the category home page, brands are spoilt for niche choice – from price to complexity; age range to sub-department – plus highlighted popular categories like “Dress Up”, “Back to School” and “Geek Store”.
If your brand is seeking to make its mark on Amazon in the Toys and Games category, make sure to seek out the niches that suit you best.
Make use of Amazon Badges
Within the many search options for Toys and Games on Amazon, you’ll now find tick boxes for both Small Business and Climate-Pledge friendly brands.
Studies show that Amazon badges can significantly influence customers’ purchasing decisions, adding an extra layer of trust that boosts your listings, and your sales – an opportunity that shouldn’t be missed by brands who qualify.
And let’s not forget the power of the Amazon’s Choice badge.
When featured on product listings, the Amazon’s Choice badge can play a significant role in reinforcing strong brand messaging and instilling confidence in customers’ purchase decisions.
This badge adds an extra layer of credibility to your brand’s products, as it is awarded based on a combination of factors, including popularity, high review ratings and low returns rates.
Having the Amazon’s Choice badge prominently displayed on your listings can be crucial in persuading potential customers who may feel undecided or overwhelmed by the multitude of similar products on the marketplace.
Surprisingly, our researchers discovered that only 30% of brands in this category had all their product listings marked with the Amazon’s Choice badge, so this is a wonderful opportunity for those able to seize it.
Amazon should be your Number One – and don’t forget the PPC
Think of Amazon as your primary sales channel.
Many larger brands just reuse image assets and copy from other channels, which misses the chance to rank properly for crucial search terms.
And time-strapped small and challenger brands can easily fall prey to implementing a half-hearted Amazon strategy as they struggle to spread their attention across different platforms and sales channels effectively.
The single way to achieve sustainable success on Amazon is by doing it properly – fully optimising every element of your listings and creating a bulletproof PPC strategy.
When it comes to your Amazon Ads, we strongly suggest that you take Amazon’s advice and build a plan that doesn’t just drive discovery by new customers, encourage repeat purchases and hit the market share of your competitors, but also targets your own listings to create smart cross and up-selling opportunities.
By placing Amazon as your priority and maximising all the tools the marketplace puts at your disposal, you’re giving your brand the best possible chance to take a slice of the market share away from the competition.
Our PPC experts can build a high-performing Amazon Ads strategy for you – and deliver it at scale. Find out more
Trends create opportunity
From playground chat to TV shows to social media, the Toys and Games sector is heavily influenced by trends that can change on a whim.
Social media in particular has accelerated trend cycles.
Viral products quickly gain mass popularity through online influencers and challenges, and that significantly impacts the demand for specific toys and games amongst kids and adults alike.
Factor in short attention spans, technological advancements, the urgency of limited edition collectables and the booming kidult sphere, and you have a position where brands must be vigilant and agile to stay on top, constantly monitoring consumer preferences and their own accurate, real-time Amazon data.
By combining these insights, Sellers can smoothly navigate this dynamic market and position themselves for lasting success in the exciting world of Toys and Games.
Ready to succeed? You don’t need to do it alone!
Toys and Games is one of the biggest and most daunting categories on Amazon – but when you get it right?
The rewards can be massive.
The good news is that you don’t need to do it alone.
From strategy to SEO, PPC to content and beyond, our full-service marketplace offering has everything you need to succeed in this highly competitive sector.
Our team of time-served Amazon experts is on hand to explore all the opportunities in front of your brand.
Get in touch to discover how we can take the mystery out of marketplace and replace it with something altogether more magical – results, growth, performance and profit.