Global / Smart Toys – The Future belongs to Smart Toys

31. Januar 2020, 13:31

The chance to foster the mental, physical and intellectual capabilities of children with the application of artificial intelligence promises a golden future for smart toys. The California-based market research institute Hexa Research is convinced of this, too. The experts forecast that the market will grow at an annual rate of 15.5 percent from just over seven billion euros worldwide (2017) to 22.25 billion euros by 2025. Our author, Ulla Cramer, spoke to André Babenhauserheide, head of sales and marketing in the Family division of the EK/servicegroup, about this trend in Germany.

André Babenhauserheide, Head of Sales and Marketing „Family“ at EK/servicegroup

Mr. Babenhauserheide, how do you assess the development of digital toys in Germany – now and in future?
The entry of digitalization into the playroom in Germany is still in its infancy, despite the rapid development of individual aspects, such as the Tonieboxes. The cultural transformation accompanying digitalization is fundamentally changing playing habits: Children no longer differentiate between digital and analogue play, but combine both aspects in their individual worlds of experience. And that is totally fine and normal on their way to becoming adults, provided that the issue of data protection or digital security is moved right to the top of the agenda.

Which areas do you consider focus areas here?
Digital elements integrated in traditional toys lift the play value to a higher level and are thus quite popular. Examples of this are found in the current hit list “Top 10 Toys 2019”. But it isn’t just the kids having fun with digitalization. The digital development of traditional family board games such as “kNOW!” from Ravensburger gets the whole family around the table. Moreover, trends like digital drawing and doing jigsaws on apps will continue to gain strength, amongst grown-ups, too. As is often the case for trends, a countermovement is currently running parallel, in this case towards traditional analogue toys. As part of this return to the traditional, Haba wooden ball tracks and modern Gravitrax variants from Ravensburger are in demand. The same applies to books with read-aloud and reading books as well as creative crafting together. Apropos ‘together’: The unwavering demand for board games shows that the social components of the play experience are still valued highly. In all these fields, especially for specialist retail with its advisory services, there are real opportunities to raise profiles, for example with relevant in-store activities.

How do you see Germany positioned here?
In digital toys, we are still at the beginning, but rapidly picking up pace. According to details from market researchers, sales of smart toys will increase by a good 15 percent annually to 22 billion euros by 2025. Basically, what is valid for us, too: Successful companies follow the needs of their customers. Accordingly, the share of digital toys is steadily increasing in our product assortments.

What role does digitalization play in connection with your retail partners and in marketing? 
This is one of our core tasks. In the toy industry, too, it is a matter of communicating the digital expertise of our retailers to the outside world without moving the retail focus out of the stores. Our digital tools are therefore oriented to making the retail partners visible on the internet – from better findability at Google & Co. via social media presences to attractive e-commerce services. The bridge to stationary retail is built with target-group-oriented digital PoS concepts. An important element in the e-commerce portfolio are our online marketplaces. Here the new multibranch forum „compravo“ brings the product ranges for toys and baby articles, living, household goods and small appliances together in one portal. At, specialist retailers can position themselves as local “granters of wishes and solvers of problems”, as the regional shopping outlets of choice with traditional specialist retail strengths as well as digital services.

Digital Toy Makes it to Top Listing

A haunted high school. A graveyard mystery. A shrimp shack attack. In the Hidden Side construction sets that Lego launched onto the market in 2019, real and digital elements are merged with each other. With Augmented Reality (AR) in an app, kids bring the construction sets to life, become submerged in a hidden ghost world and have to solve tricky problems and interactive puzzles to rid the fictitious town of Newbury of spooky apparitions. With the “Newbury Haunted High School”, Lego immediately grabbed the number four spot in the “Top 10 Toys 2019” list issued by the Federal Association of German Toy Retailers (BVS). The trio of digital toys that got into the ranking were completed by FurReal Cubby, Hasbro’s interactive huggable bear, and Siku’s Claas Xerion 5.000 TRAC VC tractor, which can be controlled with an app.

Digital Kids – an European Debate

Kids like toys which are intelligent and connected to the internet – and wouldn‘t it make sense to give them access to future technologies from an early age on? But what about potential risks for health and education? All over Europe these questions are being discussed in an endeavour to find answers. We asked members of the TrendCommittee of the Spielwarenmesse about the developments in their homelands.

Italy: „The Concern is growing“

According to a research published in April 2019 by the Kids & Toys Observatory of the School of Management at Milan’s Politecnico, Italian children aged six to eight use Apps as their second preference for playing (26 percent), while 23 percent of those aged nine to twelve appreciate vocal control. The same study found out that inside a sample of the toy companies operating in the Italian marketplace there is a still limited approach to the most innovative digital advances such as Augmented Reality and Virtual Reality; instead, QR Codes are the most commonly used tool (75 percent): mainly applied to product packaging, it links to the company’s Website, App or catalogue, or to the toy’s user instructions. If the industry’s offer is apparently not up to the kids’ expectations, the parents’ attitude somehow supports it. Italians are not so willing to let their children play with digital toys. There is in fact growing worry about the possible addiction to digital devices and about bad effects on the kids’ health due to emissions.
In the recent past, Chicco has introduced toys marketed to small children using Apps and Augmented Reality. We asked the company for a comment on the prospects for digital toys in the Italian marketplace. “Chicco’s proposal is complementary and preparatory to digital, with games aiming to enhance all of the child’s skills”, a company spokesperson explained. “Our new educational line Edu 4 You in particular, developed in cooperation with the Italian National Pedagogists Association, includes games that can improve logical-mathematical skills of children from two years of age and older and prepare them for programming through coding. Four initial games make up the line and they also develop creativity as there are different solutions to every problem that can be found through collective play”.

Daniele Caroli, specialized journalist für toys and baby topics in Italy

UK: „Digital Toys are Established“

From a very young age, children are influenced by what they see around them. They also make sense of the world through play. So it is no great surprise that children are just as fascinated by technology and digital toys as their parents. These ‘digital natives’ have grown up surrounded by technology from an early age, to the point where mastering digital products comes as second nature to them. It is no surprise that toy companies have recognised this trend, incorporating digital features into traditional toys to enhance functionality and play patterns, as well as harnessing the very latest technological developments to create ground-breaking new toys. Despite the amazing new possibilities offered by digital toys, it is important not to lose sight of what makes a great toy: the ability to spark a child’s imagination and creativity. The best digital toys have that ‘wow factor’, but don’t reduce the child to a mere viewer – they fully encourage participation, engaging the child and delivering a truly interactive play experience. Of course, there are challenges for toy retailers in the digital arena; higher price points and lower retail margins allow little room for error, while sales tend to be concentrated around the festive season due to the cost. However, digital toys often deliver a huge amount of play value and a rich menu of features at a price which is a fraction of the ‘adult’ version – this has been particularly noticeable in sub-categories of the digital toy sector such as robotics and gadgets.It is clear that digital toys are here to stay; they will continue to change as technology evolves – what was seen as ‘cutting edge’ a few years ago can rapidly become out of date – but they are now established as a permanent and important part of the toy world.

John Baulch, editor of the Toys World Magazine (UK)

Spain: „Education in Focus“

In general, the data shows a constant increase of the time children spend playing with digital games and toys in Spain. A study carried out by the Technological Institute for Children‘s Products and Leisure (AIJU) during 2019 with 512 families in Spain, points out that 50 percent of Spanish children ask their parents for technological toys for Christmas, mainly starting after they turn seven years old.
Some of the aspects that are contributing to this reality are, on the one hand the increase of technological toys on offer, and on the other the ubiquity of smart devices. More than half of the children age zero to twelve years old use regularly a smartphone (57 percent). Moreover, 62 percent use a tablet, with more than half of them owning their own (51 percent). If we divide the information by ages, 46 percent of children under the age of three have their own tablet. 42 percent of four- to six-year-olds, 49 percent of seven- to nine-year-olds, and 63 percent of ten- to twelve- year-olds. To adapt to this reality, in the last years the industry has done an effort to include into their toys and games specific digital features and even options to allow them to be played in combination with digital devices. But together with the continual growth of digital toys in the market, parents concerns are in the rise as well. Our studies indicate that most Spanish parents believe this kind of toys favor a sedentary lifestyle in children and take a negative influence on their socialization skills, their imagination and creativity. There are some specific attributes that contribute to the acceptance of digital toys. Parents prefer digital toys that support education, mainly focused on STREAM subjects (Science, Technology, Robotics, Art and Maths). It is also viewed as positive when digital toys make children move and be active, and when they promote communication and social interaction.
Also, adults are showing a preference for screenless technological toys, a factor that is linked to an important industry trend that will be presented during the Spielwarenmesse 2020: “Digital goes Physical”. This trend is about the increase of physical toys that are inspired by digital ones. It is also relevant to point out that parents show a different acceptance of technological toys depending on the various toy categories. For example, construction sets with digital features are highly valued while digital dolls usually get a medium average acceptance, and ride-ons and role play toys (eg. a kitchen) are commonly preferred without technology involved.
Regardless, the fact is that Spanish families report that 20 percent of their toys have some kind of technology, a percentage that has been rising quite steadily in the last years. Undoubtedly, it is important for the industry to acknowledge the potential of implementing features from the digital world into new toys.

Dr. Maria Costa, specialist for market research at the Instituto Tecnológico de producto infantil y ocio (AIJU) in Ibi (Alicante)

Poland: „Digital Toys Conquer the Market“

Nowadays there is nothing unusual about children being able to use remote controls, smartphones, tablets and video games consoles. Reality shown on the screen seeps into their world and becomes real again. Cartoon, movie and video game characters become our children’s stuffed toys and collectible figurines and their images are often present on kids’ clothes and school accessories. Children love to have their favourite characters around them all the time, therefore licensed toys have been selling well for years. According to data for 2019 Paw Patrol, Cars (Pixar Films) and StarCraft have the highest sales in Poland.
The main characteristic of the Polish toy market is a dynamic growth of quantitative and qualitative sales in both traditional and online shopping. According to the forecasts, the whole Polish toy market priced at 820 million euro a year may soon reach 1 billion euro a year. The largest toy segment includes blocks, dolls and sport and recreation toys, together with outdoor toys. These were the toys today’s parents used to play and that is why they choose them for their children, as well. However, progressive digitalization of every aspect of our life encourages sales of toys crammed with electronics and using digital applications. That trend can also be observed in Poland. It is not enough just to build a construction using blocks; today it is possible to bring it to life using an app (like in Lego Hidden Story). You may not only read a book, you may also listen to it! Just use a special reading pen or an embedded feature allowing you to listen to selected parts of the text. Educational toys and creative sets are also selling well, therefore sets teaching children coding and programming are becoming more and more popular. Interactive robots grow with our children: they teach basics of programming, but also creative thinking and problem solving and above all they develop logical thinking getting kids ready for mature life.
The Polish toy market does not differ from the ones of other countries. Due to the dynamic development and progressive digitalization of the world, tech toys are present on the market and they will gradually complement the traditional toys market.

Urszula Kaszubowska, chief editor of the Polish magazine Branza Dziecieca