Additional Findings

• In the United States, the collectible toy market is swiftly expanding and serves as the quickest growing segment of the entire toy sector.
• In the first half of 2018, the toy market in the United States expanded by 7%.
• According to the Toy Association, the market size of the overall toy market, as of 2018, is $28 billion.
•  Funko is at the forefront of the collectible toy market growth, while the biggest American collectibles retailer is GameStop with a 28% share of the collectible toys market in the United States.

Research Strategy:

• Collectible toy market share: 11% 
• U.S. toy market size: $28 billion 

• Calculation: $28 billion * 0.11 = $3.08 billion

HELPFUL FINDINGS

• The global toys market is estimated to reach $120 billion by 2023 at a CAGR of 4% during the period 2017 to 2023.
• The United States is leading in toys and game expenditure.
• The global sales of collectible toys account for 11% of the total toy market sales.
• The US toy market size $28 billion in 2018.

Research Strategy:

Nostalgia Marketing

• Millennials, who are preparing to have children of their own, are buying collectible toys and driving the market with toys from their own childhood.
• The nostalgia factor of the purchases differs from traditional toy purchases for child development. 
• The purchases by Millennial adults is hoped to offset anticipated losses by 2022, as children shift away from traditional toys and orient towards electronic gaming systems. 
• This marketing strategy associates positive references from Millennials' childhoods and branding, which forges a connective relationship between consumer and business.
• For example, G.I. Joe figurines, a staple in Millennial childhood toys, is now valued at $200,000, given its nostalgia factor and popularity.

Surprise Packs/Blind Bags

• Since 2017, sales of blind bags, a subset of collectible toys in which consumers are surprised at the specific make of a toy, have grown by 70%.
• A prime example of successful sales due to this strategy is MGA's L.O.L. Surprise! Dolls, which generated more than $4 billion in sales in 2018.
• Laurie Schacht of Toy Insider notes that the $1.4 billion in collectible toy sales is largely driven by these surprise packs which, "kids love" and show "no signs of slowing."

YouTube Collectible Toy Unboxing

• Related as a driver to the sales of blind bags, YouTube unboxing videos have imploded in popularity in recent years.
• YouTube, the most widely-used social media channel among Generation Z, has been used as a medium for surprise pack unboxing videos, in which kids unwrap toys and film their live reactions.
• These videos have been wildly popular, with over 100,000 such videos published to date, with some generating roughly 24 million views.
• Mattel capitalized on this strategy, launching a campaign in which Barbie acts as a "vlogger" with 5 million subscribers on YouTube in order to drive sales.

RESEARCH STRATEGY

TRENDS IMPACTING THE COLLECTIBLE TOYS MARKET IN THE US

1. THE ADVENT OF 3D PRINTING

• The advent of 3D printing and Do-it-yourself (DIY) manufacturing allows consumers to manufacture goods at their convenience, using open-source designs and the right materials. Evidence suggests that with the use of freely available 3D printable designs, and the use of DIY manufacturing techniques, the toy industry loses $60 million every year.
• The use of 3D printers is increasing globally. As such, more people are likely to use them in manufacturing collectible toys in the future.

• 3D printing technology poses a threat to the collectible toys market in the US, as consumers are now able to manufacture their favorite toy characters by themselves, thus shifting the power of choice to the consumers.
• While this trend is saving consumers a lot of money and giving them the ability to produce toys that are not yet in the market, it is increasing the risk of having fake collectibles in the market, as well as copyright violations and trademark infringements.

• To counter this trend, licensing companies such as Sesame Workshop and toy companies such as Hasbro are monetizing licenses to 3D printing companies by "providing access to specific assets and distinguishing them from other licensed merchandise available in the market."

2. BRAND PROMOTION AND MARKETING USING LICENSED PRODUCTS

• "A license (licensing) grants the holder permission and authority to distribute products and merchandise based on the intellectual property (IP) of a content creator. This can be in new forms, for example, taking a trading card game and creating an animated TV series, or permission to brand your product with their IP."
• Before now, licensed products majorly served to provide revenue for the licensing companies. However, the entertainment industry has turned to licensed designer toys to promote and market TV series, movies, and video games.

• This trend is leading to increasing demand for licensed collectible toys.
• Also, license providers are earning more from the toys characters of movies and shows.

• Due to licensing partnerships in recent years, LEGO has grown to become the second most successful toymaker globally, with a $5.5 billion revenue in 2018. LEGO used the Star Wars IP to "design characters and construction sets," which LEGO used to produce over 350 sets of buildable blocks, as well as to brand its toys.
• The Walt Disney Company is the "leading character licensor in the world, which acts as a substantial form of brand promotion and marketing for the company."

3. INCREASING DEMAND FOR FRANCHISE MOVIES AND SHOWS

• There is rising consumption of franchise movies and series such as the Justice League, Game of Thrones, Star Wars, and League of Legends, among others. The movie industry is thriving off the number of franchises and sequels they produce. Thus, Hollywood is spending a great deal on action franchises and less on films.
• With the technological advancement of film making, people engage more with the "computer-generated effects and lighting design, motion capture, green screen, stunt coordination, and military-like devices" that come with most franchise movies.
• Many collectible toy manufacturers have made a fortune from producing the toy characters of several blockbuster movies.

• This trend is driving the demand for licensed franchise toy characters. As such, licensing companies have begun to expand their portfolios.
• Toy companies that have more extensive licensing portfolios are experiencing more growth and revenue.
• There is also a growing demand for licensing agents 

• Funko obtained a license for an animated series called Rick and Morty, which it plans to use for toy production and beyond.
• The company's CEO Brian Mariotti stated that Funko "typically handles 175 to 200 licenses at any given time."

RESEARCH STRATEGY

AGE

• Several reports reveal that children aged between six to seven years are among the group of people currently keeping collectibles across the United States.
• Millennials are among notable generations that have consumed collectibles. As of 2019, millennials fall within the ages 23 to 38, averaging at 31 years.
• The parents of millennials, (baby boomers) played an active role in collectible toys. In the 90s they paid "hundreds of dollars for" collectibles. Baby boomers fall within the ages 55 to 73, averaging at 64 years.

GENDER

• A seven-year-old male recently made a revenue of about $22 million by playing with his current set of toy collections.
• There are males than females for all years of age from newborn up to age 35. Younger children and millennials that currently consume or have consumed toy collectibles all average at 31 years or less and are more likely to be male.
• There are more females for every single year of age in America from 36 onward. Averaging at 64 years, baby boomers who collected toys for millennials are more likely to be female.

INCOME LEVEL

• A seven-year-old recently made a revenue of about $22 million from his current set of toy collections.
• The average income of a full-time millennial with a bachelors degree in 2018 was $56,000, those with some college degree $36,000, and the average for those who graduated from high school was $31,300. Millennials have been consumers of collectibles.

EDUCATIONAL LEVEL

• Children aged between six to seven years and currently consuming collectible toys are most likely in grade 7 or less.
• Several reports reveal that the parents of millennials, (baby boomers) played an active role in collectible toys, and about 25% of boomers had a bachelors degree or a higher degree in 1989.
• Several reports reveal that millennials have been consumers of collectibles. About 39% of millennials had a bachelors degree or a higher degree in 2018.

MARITAL STATUS

• We have assumed that children aged between six to seven years and currently consuming collectible toys are not married.
• The parents of millennials, (baby boomers) that played an active role in collectible toys are most likely married. Over 60% of baby boomers have been married before.
• About 27% of millennials are married. Millennials have been consumers of collectibles.

REGIONAL BREAKDOWN

• There is insufficient information available to the public to determine the location of the average collectible toy consumer by region.
• According to Amazon, the Shooky character, BT21, popular among millennials. BT21's have been recently sold in various locations across the United States such as New York and LA.

RESEARCH STRATEGY

Toy Collectibles Market Overview

• The market value in the US generated from retail sales of collectible toys is $1.5 billion.
• The toy company, Funko, is the leader in the collectible field.
• Other key players in the collectible toys industry and their main product are Mattel with Barbie, Hasbro with movie action figures, Spin Master with Hatchimals, MGA with LOL, and Wowee with Fingerlings.
•  GameStop is the biggest retailer for collectibles in the US with sales at around $650 million and a market share of about 28%.

Psychographics

• The visitors of Funko's website have demonstrated a particular interest in e-commerce, shopping, games, animation, comics, TV movies, and streaming.
• Some popular topics among Funko's visitors include shopping, games, movies, news, entertainment, music, and comics.
• The visitors of GameSpot's website have shown interest in video games consoles, video games accessories, animation, and comics.
• Mattel and its flagship Barbie are brands known for evoking nostalgia for their consumers.
• Mattel's consumers have shown a high interest in the competitors' brands Hasbro and Lego.

• According to James Gallo, toy collector, and owner of Toy & Comic Heaven, the adults who buy collectible toys want their childhood back and have this yearning to recapture their youth through the toys they loved or desired the most when they were kids.
• Most adult collectible buyers are people who are 1) looking for investment, 2) playing with these toys and games as kids, and 3) dealers and collectors.
• Based on an interview with the toy collectors Tracey and Jason Tobin, it was found that the reason they collect toys is a result of the love they have for many fandoms who happen to have amazing toy options.
• Tracey and Jason Tobin are into all kinds of pop culture, so they are collecting toys related to their favorite pop culture icons.
• Tracey and Jason Tobin explained their perspective on collecting: "Collecting should be about making yourself happy, and showing your love for the subjects of your collection. Once you start collecting items only because they're “rare” or “valuable” or have a specific sticker on the box, you're just allowing yourself to fall into foolish marketing traps created by companies who only care about your money. Force yourself to see past all that, collect the items that genuinely make you smile, and you'll be much, much happier in the long run."

• Kids who are into collecting LOL's, typically enjoy watching unboxing videos and commercials on YouTube.
• The collectibles industry uses people's desire for rare dolls and toys as a driver to increase toy sales.

Research Strategy:

AWARENESS STAGE

• The average collectible toy buyers identify items that interest them. They also decide whether purchasing a collectible toy should be a priority or not.
• They begin to discover or search for trending products and brands. They do this by attending toy shows and doing research on auction websites.
• Since collectible toys are now available for sale online through sites like eBay and other electronic channels, buyers can find reviews and opinions of other buyers and use that information to aid their decision-making.
• Buyers also target auction houses to understand the potential value an item may be worth in the future.

CONSIDERATION STAGE

• In this stage, buyers have clearly defined what to buy; they have already evaluated the product and are showing a willingness to engage with different sellers.
• Buyers ensure that the toys they are about to buy are undamaged and clean, with no parts missing.
• They also seek out products that have their original packaging as these are worth the most.
• According to the owner of Nowhere Toys, items still in a box may get passed over or will fetch a lower price if they are smoke-damaged. He notes, “It’s got to be clean or collectors shy away from it and they’ll hold off and wait until they can find that particular item in mint condition.”
• In this stage also, buyers pay attention to the description of the product, which provides critical information that can determine the future value of an item. For example, “Original Transformers G1 Soundwave BNMIB w/Buzzsaw Cassette” tells the reader that the item is a Generation 1 Transformer figure.

DECISION STAGE

• In this stage, buyers could write a pros or cons list of specific collectible toys and then decide on the toy that best suits their interest.

OTHER USEFUL FINDINGS:

• A collectible "is an item that is worth far more than it was originally sold for because of its rarity and/or popular demand. Common categories of collectibles include antiques, toys, coins, comic books, and stamps."
• One of the most enduring categories of vintage and antique toys are toys that move.
• Children have clamored for character toys from their favorite cartoon strips, television shows, and animated films, such as Peanuts or, later, Teenage Mutant Ninja Turtles.
• In the United States, sales in the U.S. toy industry rose by seven percent to $7.9 billion in the first half of 2018.
• It is impossible to predict future values in the toy industry, but experts suggest looking for items related to popular video games and TV shows. Examples include:
•  Limited edition LEGO sets (but don't assemble them, if you want the highest value)
•  The Simpsons figures
•  Fisher-Price Imaginext figures
•  Skylanders
•  Original Minecraft toys
•  Playmobil airplanes, airports, buses, campers
•  Limited edition board games (such as collector Monopoly boards)

Research Strategy:

1. BIG BAD TOY STORE

• Big Bad Toy Store is a website that sells a wide range of licensed collectibles toys, including statues and action figures made by the lead manufacturers in the industry.
• The fame they have is so big that it's very common for them to collaborate with vloggers and be the sponsors of several YouTube channels managed by collectors.
• One of the nicest features of their website is that buyers can pre-order collectible toys before its arrival in this way the client makes sure s/he will have the toy regardless of the demand.
• The website has 6.91 million total visits, and it receives the rank #1,747 of websites in the US.
• Three best-selling toys are Dragon Ball Z S.H.Figuarts Goku (A Saiyan Raised On Earth), Hasbro Marvel Legends Series Action Figures, and the collection of Star Wars the Black Series.
•  Target Audience: Adults (over 18), that are interested in video games, animation, and comics.

2. ENTERTAINMENT EARTH

• It is an online shopping website that allows collectors to buy their toys from different creators like Marvel, DC, Batman, among others.
• They also offer the feature of pre-ordering, allowing customers to pay up-front to secure the toy.
• They have two types of clients: the casual customer and the luxurious one. The difference is that the first customer buys toys with a value that no more than $100, and the last one prefer expensive and exclusive toys.
• It was founded in 1995, and they are ranked #6,951 on websites in the US. The company has accumulated a total of 2.1 million visitors.
• Three best-selling toys are Batman Jokers with Batman pop! Vinyl Figure - Entertainment Earth Exclusive, Dragon Ball Ape Goku 6-Inch Pop! Entertainment Earth Exclusive, and My Hero Academia Deku Full Cowl Glow-in-the-Dark Pop! Vinyl Figure - Entertainment Earth Exclusive.
•  Target audience: Adults that are interested in animation and comics, TV movies and streaming, and video games consoles and accessories.

3. TOY WIZ

• Toy Wiz is a well-known collectible toy online shop that sells brands like Anime, Dragon Ball, Marvel, Funko, and more. They also sell game cards like the Yu-Gi-Oh! ones.
• The company also let its customers order in advance.
• Toy Wiz has been operating for over 35 years, and all the toys are 100% original. If the client is not happy with the product they received, they have an easy return system.
• They are based in Nanuet, NY. The website has received a total of 1.79 million visitors and they are the #7,689th website in the US.
• Three best-selling toys are Minecraft Grass Series 1 Mystery Pack, LEGO Juniors Construction Set, and Rainbow Loom Metal Hook Tool Upgrade Kit [green].
•  Target customers: Children, teenagers, and adults interested in games, video games consoles and accessories, and animation and comics.

4. eBay

• eBay is a place where customers can find literally, everything they can imagine. Of course, a place like that must have a section of collectible toys, in fact, its name is Toytopia and it is full of vintage and collectible toys released by brands and users. Some of them with fixed prices, and others on an auction.
• The categories of toys are very varied, and although it doesn't have the pre-order service it has many filters that allow the customer to have a wonderful experience.
• Three best-selling toys on Toytopia are LEGO, Deadpool figure, and Warhammer 40,000.
•  Target audience: very varied from babies and children to full-grown up people. They have millions of toys for everyone's tastes.

5. AMAZON

•  Amazon, as well as eBay, is another giant in the US that offers almost everything customers can imagine. They sell collectible toys, though eBay has more popularity.
• They also offer pre-order service, so clients don't miss out opportunities.
• Three best-seller toys are the Lego Ideas Book: Unlock Your Imagination, The Ultimate Guide to G.I. Joe 1982-1994, and LEGO Play Book: Ideas to Bring Your Bricks to Life.
•  Target audience: adults (+18) interested in acquiring toys that remind them of their youth.

RESEARCH STRATEGY