Vision - January/February 2008 - (Page 86) market insider industry research ] • [ by steve koenig How can CE retailers increase their share of the $1.6 billion market opportunity electronic toys provide? Image Source Pink/Punchstock Electronic Toys: No Funny Money Here T electronic toy purchasers turn to children for ideas and recommendations. In-store displays also are an influential information source for 31 percent of electronic toy purchasers. The study reveals consumer electronics, oday’s kids have a natural affinity for technology mani- especially video gaming devices, are popufest in teens’ faithful and lar purchases for younger children. Some unfaltering attachment to 59 percent of consumers who purchased cell phones and the magne- items for younger children in the past year tism between younger children and any bought some type of CE product with video toy with batteries. With roughly 65 million gaming devices. Sony’s PSP tops the list. children up to 15 years old living in But not all electronic toy purchases the U.S., the question is: what sales are for fun and games. opportunities exist for electronic toys? Education Is Tops Pioneering research conducted While 69 percent of purchasers find by CEA in conjunction with the Toy electronic toys appealing because Industry Association (TIA) reveals they are fun, 78 percent of consum51 percent of online consumers plan ers view the education/learning they Steve Koenig to purchase some kind of electronic provide as beneficial to children. toy for children from birth to 15 years over Three of the five most purchased types of the next 12 months. Factoring in planned electronic toys are educational in nature. In spending levels and other purchase vari- fact, almost half (48 percent) of electronic ables, CEA estimates the market oppor- toy buyers have purchased electronic learntunity for electronic toys is around $1.6 ing systems such as the Leapster Learning billion over the next year. System, 36 percent have purchased elecYet even at this spending level, The Elec- tronic learning aids and 36 percent have tronic Toy Market study found electronic purchased electronic books for children in toys still rank behind books, movies and the past 12 months. traditional toys in terms of gift purchases Given the predilection for educational for kids. Only 27 percent of online consum- value in electronic toy purchases it may ers have purchased an electronic toy in the surprise some to learn children are the top past year and for some of these purchases source of information when it comes to researching these purchases. One-third of the toy label may only loosely apply. Cashing in on the Opportunity Mass merchants (e.g. Kmart or Wal-Mart) capture the largest share of electronic toy purchases with 42 percent of consumers making their most recent electronic toy purchase there. Some 33 percent made their purchase at a general toy store such as Toys ‘R’ Us, but only six percent bought at a general consumer electronics store like Circuit City or Best Buy. How can CE retailers increase their share of the $1.6 billion market opportunity electronic toys provide? Although shelf space is more precious than ever at retail, e-toys may present a better margin opportunity than other more commoditized CE products. With a good assortment of products on the shelf, the strategy to boost sales is child’s play —accentuate the positive aspects of electronic toys such as education, interactivity and fun. Targeting younger consumers and technology enthusiasts is another tactic worth promoting. These consumers demonstrate a high propensity to purchase electronic toys as a result of their heavy engagement with CE devices. To learn more about the market for electronic toys, check out The Electronic Toy Market study available on www.members. CE.org (batteries not included). • www.ce.org 86 January/February 2008 http://www.members.ce.org http://www.members.ce.org http://www.ce.org
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