Pop Culture Wave Propels Toy Retail to New Heights

If toy retailers deliver a strong holiday season performance this year, they may have a vast cast of characters to thank—including Barbie, Mario, Leonardo, Raphael, Donatello, and Michelangelo, as well as Optimus Prime.

As major players in the U.S. toy retail market,Amazon、Target、WalmartandToys R Ushave all released their holiday season hot toy lists in recent weeks. These lists show some similarities: they all highlight well-known intellectual property (IP) characters with movies released this year, including the Super Mario Bros., Teenage Mutant Ninja Turtles, Barbie, and Transformers.

Industry leaders and analysts told Retail Dive that a movie or streaming release often keeps related IP in the spotlight for weeks or even months, which is likely to make these toys popular gift choices this holiday season.

"I absolutely, without a doubt, expect strong sales performance for toys tied to movies or pop culture," Linda Johansen-James, founder and CEO of management and consulting firm International Retail Group, told Retail Dive.

"They're like celebrities in the toy world because their fan base extends beyond children to adults—which also taps into nostalgia! Brands like Barbie, Mario, and the Teenage Mutant Ninja Turtles already have a certain star power, and recent and upcoming pop culture media content further amplifies that effect," Johansen-James said in an email. "These toys capture the essence of the character or brand. If they can do that while offering something fresh and creative—that's the recipe for retail success."

According to Steve Totzke, president and chief commercial officer of Mattel, the company owns the Barbie toy line, and the Barbie movie has become a global phenomenon since its summer release.

"The film has broken records at the box office, and we're seeing results in the Barbie movie product line," Totzke said. "In conjunction with the theatrical release, we launched a range of Barbie movie-related toys and products, and so far, these have sold out across all major distribution channels."

Price becomes a top consideration for toy consumers

Affordability is a common theme in the toy retail sector this year. To some extent, all major retailers' lists particularly emphasize toys priced under $25. Executives and analysts say this is not surprising given consumers' ongoing concerns about inflation and reduced discretionary spending.

Jill Sando, executive vice president and chief merchandising officer at Target, said in astatementthat as the holiday season approaches, "affordability is a top consideration for consumers."

Johansen-James said the channels, timing, and types of toys preferred by children and consumers this year have "undoubtedly" changed. While trying to make predictions is "like reading a crystal ball," experience, background, and data can still provide some insight into toy consumption behavior this season.

"Due to new technology and external environmental factors, consumers have become increasingly savvy in seeking deals," Johansen-James said. "I expect consumers to shop earlier this year or turn to online marketplaces for better prices. Another notable shift in consumption is that experiences are valued more than physical goods. So, I expect more parents to choose gifts that create memorable experiences."

"Uncertain economic times often foster a frugal mindset when it comes to discretionary spending," Johansen-James continued. "People start to tighten their wallets. However, the emotional value of gift-giving—especially to children—often transcends economic considerations. It's like toy stores have their own economy, driven by parental love and the magic of the holiday season."

She also noted that "consumers are more cautious in spending," which in turn may increase purchases of multifunctional toys that provide long-term engagement. Johansen-James characterized these purchases as value-driven. "Brands that can combine novelty with a sense of lasting value are likely to be very popular," Johansen-James said.

Totzke, who oversees Mattel's global commercial operations and worldwide sales in more than 150 markets, while also serving on the board of the Toy Association, holds a similar view.

"Overall, the toy industry is a resilient industry, and we expect it to continue growing over time. Toys are a strategic category for retailers, and parents will always prioritize investing in their children," Totzke said. He also noted that Mattel recently, on the occasion of the brand's 100th anniversary,regained the license for the Disney Princess line. Mattel also recently regained the toy rights for the Frozen franchise, with its new doll line hitting shelves in January.

"Overall, the toy industry is a resilient industry, and we expect it to continue growing over time. Toys are a strategic category for retailers, and parents will always prioritize investing in their children."

Steve Totzke

President and Chief Commercial Officer of Mattel

Johansen-James said that despite years of sustained economic pressure on consumers, the market may even be poised for spending that exceeds expectations.

"Recently, I've noticed Americans increasingly adopting a 'treat yourself' mindset, especially among parents who want to create a sense of normalcy for their children after challenging years. So, the desire for 'must-have toys' won't disappear—it may even be amplified in the current economic environment," Johansen-James said.

But more money doesn't always mean more fun, especially when it comes to toys.

"I think we know that affordability is a top consideration for customers," said Anne Carrihill, director of toys and games at Amazon. But the beauty of toys is also that "they don't have to be expensive to be fun, right? Some of the most wonderful toys that bring people together are actually very affordable." Carrihill has worked at Amazon for nearly 12 years, has been in the toy business since 2016, and also serves on the board of the Toy Association.

Carrihill said toys often reflect the current cultural landscape and zeitgeist, and this season is no exception.

"In my years in the toy industry, some of the factors driving the industry I don't think have changed, but what's interesting to me is how much innovation there is," she said. Some of that innovation includes market interest in smaller, quieter toys and activities, "which is almost at the complete opposite end of the spectrum from pop culture," Carrihill said.

Products in that category include the card gameTaco Cat Goat Cheese Pizza, andBeast Lab—an interactive science toy that encourages kids to create a large feline model by mixing sticky ingredients.

Toys become part of the early shopping trend

In recent years, retailers have continued to move up the start of holiday shopping, and the year-end shopping season anchored by Christmas is no exception. This seems to be driven by consumers' expected spending capacity.

"Shopping starts so early largely because consumers are spreading out their spending to cover the various costs of the holiday season," the National Retail Federation said in its 2023holiday shopping outlook. "Last year, the top reason consumers started shopping in October or earlier was to spread out their gift shopping budget."

According to NRF data, 46% of consumers last year started holiday shopping before November, up from 39% in 2019. This year seems to continue that trend. In an NRF September survey, 39% of shoppers said they planned to start holiday shopping earlier than usual.

But NRF also noted that starting early doesn't mean ending early. Last year, consumers kept shopping through the end of the season, with only 53% having completed their shopping by early December.

Carrihill said she has observed the trend of the shopping season starting earlier, but also noted that shopping timing is a personal choice for consumers. "We have a large and diverse customer base, and the right time to shop or browse varies from person to person," she said.

And no matter when people are ready to buy, toy offerings will be full of familiar characters.

"I think this year's pop culture moments really resonate across all ages... It's like an interesting combination of trends," Carrihill said. "I don't think it's 'pop culture or nothing.' I think there's a wide range of interests, and this year's products are truly innovative, coming to life in a way that makes this holiday season very exciting from a customer perspective."