Photographer: Charles Sykes/AP Images for Hasbro

Toy Companies Already Know What Your Kids Want for Christmas

Shoppers might not know it exists yet, but this year's hot new toy has already been designed, produced, tested, and sold to manufacturers.

“Tastes funny,” Brightlings, an interactive smart doll, declared with a giggle after her digital tongue licked the table. Brightlings, made by Spin Master Corp, was one of the breakout stars at February's New York Toy Fair, and she knew that I had just put her face down on the table. Soon she would woo me into playing with her again by belting out a tune, one of six she knows. “We tested her with girls [ages] four to seven, and their moms. In all my years in the toy industry, it’s the best research I’ve seen,” said Shannon Sackett, director of marketing for girls brands at Spin Master.

Little girls won’t know about Brightlings, or the majority of toys introduced by about 1,200 companies at the fair, until late summer, but that has little effect on product plans for the holiday season.

Spin Master's Brightlings.
Spin Master's Brightlings.
Source: Spin Master

What children will want for Christmas is determined 14 to 18 months in advance by designers, engineers, marketers, trend experts, and retail buyers, said Adrienne Appell, director of strategic communications for the Toy Industry Association (TIA). By February, big-box retailers have already firmed up their orders.

The process for Christmas 2016 began in October of last year, when roughly 200 toy manufacturers gathered at a trade show in Dallas to display samples and get feedback from buyers. Display packaging is adjusted, retail prices are negotiated, and trends begin to emerge. This season, the Toy Industry Association noticed a move toward family-oriented toys, like Brightlings, which is meant to appeal to mothers and daughters. “We were seeing tons of different products that spoke to this family connection,” Appell said. 

This trend, dubbed "Family Matters" by the TIA, first cropped up in Dallas but became solidified at February’s Toy Fair, the largest trade show of its kind in North America.  

Multiple-player toys, enjoyed by families, were on the upswing last year: Sales of games and puzzles were the fastest-growing of any toy category, up 10.8 percent in 2015 vs. the year prior, according to retail sales data collected by market researcher NPD Group Inc. Toy sales as a whole increased 6.7 percent in 2015, to $19.4 billion.

The family-friendly toy surge may reflect fears that kids are overdosing on technology. “There’s a parental pushback against screen-based games," said Gerrick Johnson, a toy analyst with BMO Financial Group. "It’s ‘Go outside,’ ‘Come to the kitchen table.’ Anything that will get them off the screen." 

Younger parents are prioritizing substantive play, said Appell. “Millennial parents are embracing that play isn’t frivolous,” she explained. “Play is very important. It helps kids build skills."

The new, popular toys aren’t entirely devoid of technology. Brightlings’s face is a screen, but it exists only to express emotion. Wicked Cool Toys, the company behind Cabbage Patch Kids, also introduced a doll with a screen incorporated into the face, called Baby So Real, which has LCD eyes and LED cheeks to display more than 20 emotions. She can be used by herself or connected to an app. “Technology and interactivity have given toys that were traditionally for playing alone some diversification,” Appell said. The Toy of the Year award winner, a 25-piece veterinary play set from Just Play, takes a similar approach: There’s an electronic stethoscope and a light-up X-ray, but the faux EKG machine is “kid-powered.”

Johnson predicts the toy market will be up 2.5 percent this year, driven by this diversification of family-oriented toys, along with popular movie-themed and STEM toys. That rate excites him. “Anything above 2 percent is hyper growth.”

Before it's here, it's on the Bloomberg Terminal. LEARN MORE