Letters to Santa might be age-old influences on what parents buy children at Christmas, but with economic pressures mounting, special offers will have just as much impact on what children receive in their stockings this year, according to research conducted exclusively for Marketing Week.
A Lightspeed Research report reveals that 32% of consumers will be looking at retailers’ deals to inspire gift ideas for children – the same percentage who will use what children ask for to determine their purchases.
Lightspeed EMEA marketing director Ralph Risk explains: “A lot of emphasis will be put on special offers this year as people seek the best value for money.
“This result stands out because out of the six top reasons consumers decide to buy certain items for children, it’s the only one that doesn’t involve the child’s requests, word of mouth or family recommendation.”
Women plan to be slightly more frugal than men, with 41% saying they will spend £20 or less per child compared with 29% of men
Stuart Grant, buying director at toy retailer The Entertainer, agrees that special offers will be the main driver of the toy market this Christmas. He says: “A 25% off promotion used to give us three times uplift [on sales compared with what would normally be sold]. Right now, the same promotion gives us seven times uplift, which shows how much the consumer is waiting for a price drop before they buy. And some consumers are not coming into our stores to buy a specific product, rather they are buying on impulse when they spot an item on promotion.”
Risk and Grant both attribute this emphasis on offers to even tighter purse strings in 2011. One in four consumers is planning to spend less on Christmas presents this year, with 55- to 64-year-olds the least likely to reduce their spending.
Nearly three-quarters (72%) of respondents say they have less money to spend this year, showing how increases in the cost of living are likely to further impact Christmas spending. Job loss and insecurity are the next most common reasons for a cut-price festive season.
Risk explains: “Christmas focuses the pressure on price, and so it’s more important for the purchaser to get value for money because they are having to spend a lot not just on presents, but the whole Christmas experience.”
People between the ages of 18 and 34 are more than twice as likely to attribute spending less on children this year to job insecurity – unsurprising considering youth unemployment is now calculated at 21.9%, double that of the overall population.
“For the younger generation, job security is something that is more on their minds, because they’re on to their first or second jobs. There is the potential that they’re seeing their peers and people coming out of university struggling to find work,” says Risk. “Someone who has been in a job for 15 years may not have that kind of insecurity.”
Most consumers (53%) will be buying for between one and three children, according to the study, although 7% will be buying for 10 or more children. And 51% will spend £100 in total on children’s gifts, which compares with the 16% who say that they will spend more than £300 this festive season.
The 35- to 54-year-old age group plans to spend the most on children, with 21% saying they will splash out more than £300. But only 12% of 18- to 34-year-olds, and 9% of 55- to 64-year-olds anticipate spending this much on children, which reflects the fact that these groups are less likely to be buying for their own children, says Risk.
When broken down to spend per child, 35- to 54-year-olds plan to spend the most, with 30% stating that they will spend more than £50 per child. This compares with 22% of 55- to 64-year-olds, and 16% of the youngest age group.
Interestingly, women plan to be slightly more frugal than men, with 41% saying they will spend £20 or less per child compared with 29% of men.
Risk says: “When I’m buying presents, I tend to go for gadgets and try to impress in that sort of sense, so it may be that men are drawn to more expensive gifts.”
With the second-hand market booming in other sectors, will this frugality benefit the second-hand toy market? Although 56% of respondents say they would not consider buying a second-hand present for a child this year, 38% would consider it and 7% have already done so. Women (41%) are morelikely to consider a second-hand present than men (33%).
Sixty per cent of respondents say they have refused to buy something a child had requested for Christmas. Although price is the main reason for most, the fact the gift isn’t age-appropriate is also a key concern. Men are more likely to refuse because of price (64% compared with 58% of women), whereas women are more likely to be concerned about age appropriateness (29% compared with 19% of men).
Just as deals and children’s requests are key influences on what consumers plan to purchase for children, 29% of consumers say they ask for advice from friends and family when working out what to buy. And despite huge brand spend on primetime TV slots and extravagant creative, only 15% of consumers say advertising will influence them this Christmas.
Risk suggests that this may be because consumers tend to attribute decisions to special offers because they are a very direct, memorable presence in store, whereas advertising is a more subtle brand awareness exercise that has more of a trickle effect.
Despite huge brand spend on primetime TV slots and extravagant creative, only 15% of consumers say advertising will influence them this Christmas
Even though adults feel that they aren’t that influenced by advertising themselves, they name TV advertising (41%), what children’s friends have (47%)and kids’ TV shows (38%) as the most important factors that shape what children will ask for as Christmas presents.
Risk says: “People will filter out adverts for what they’re interested in. For adults, ads for children’s toys won’t be something they’ll actively engage with.”
For 9% of parents, pester power lasts all year, although 45% of respondents say children start asking for specific items in the three months leading up to Christmas. Risk says: “It does seem that there’s quite an extended period for advertisers to get their message across to the children that will start promoting what they want to their parents.
“We all groan when the first advert comes on at Christmas but it does tie in to the period where kids use pester power, so the desired effect of TV ads is working.”
What celebrities choose for their kids, online forums and media coverage about this year’s big toys are most likely to be seen as “not important at all” by adults when deciding what to buy. However, 21% of respondents say that a child they are buying for has asked for one of the Toy Retailers Association ’dream dozen’ products (see below), which suggests that marketing and PR drives will have an indirect influence on what adults eventually buy.
Risk says: “It is interesting that so few people say they are influenced by celebrities. It would be interesting if we asked the kids the same question because it might actually define what they ask for and so still might influence what parents buy. Celebrity involvement and media coverage might not directly impact on the purchaser but it might influence children’s hobbies or what their friends want, and so influence purchasing indirectly.”
Although adults might control the purse strings, marketers must not overlook how much children directly and indirectly sway adult purchasing – especially at Christmas.
Risk says: “Brands have got to balance the influence of how they advertise to the children and get them to be their advocates without alienating the parents, and make sure the message supports the children’s wants. On the back of that they’ve got to make sure the prices are correct and do not fall outside of what people are willing to pay.”
Top 12 predicted bestsellers this Christmas
1 Star Wars Ultimate Force Tech Lightsaber
2 LeapPad Explorer
3 Nerf Vortex Nitron Blaster
4 Fireman Sam Pontypandy Rescue Set
5 Moshi Monsters Moshling Treehouse
6 Sesame Street Let’s Rock Elmo
7 Doggie Doo
8 Lego Ninjago Fire Temple
9 Fijit Friends
10 Milky the Bunny
11 Monster High Lagoona’s Hydration Station
12 Vtech Kidizoom Twist Camera
Note: List not in order of preference
Buying director, The Entertainer
Consumers are being educated to wait for promotions. It doesn’t really matter in what industry you’re buying, it’s rare that people are prepared to pay the full retail value.
People are trying to make their money go further. If your child has ten things on his list and he’s only going to get five this year, then you buy the five that you can get on offer. It’s a more important part of the decision-making process than previous years.
We’ve all learned from the food industry that promotions drive sales, but the problem with toys is that, unlike food, you don’t consume them. If you buy a Monopoly game at half price, you don’t need a second one.
It’s become quite a dangerous road that many industries have gone down. We’ve got hooked on the drug of selling more every year and the only way we can continue to do that is by promoting more and by squeezing all of our margins.
Senior director, marketing, Lego UK
Given the current economic environment, we expect to see, and have already seen, a fair amount of discounting this year.
That said, as a premium brand, our efforts will continue to focus on creating consumer awareness and engagement, while reinforcing our message of long-term play value. We aspire to be one of the least discounted brands in the market.
Strategic insight and business intelligence manager, Mattel
Although we know special offers and deals are motivating for parents, we find that the child’s request and their wishlist is the primary motivator.
However, we are aware that parents won’t be buying everything on the wishlist this year as they have maybe done in the past.
We are not surprised that women are planning to be more frugal this year as dads are less aware of how much is actually spent on the children at Christmas.
Women stick to a budget, which is typically much higher than the £20 declared in this research. Typical actual spend per child on toys at Christmas is between £86 and £106.
Last Christmas the consumer had a more ’bury the head in the sand’ mentality, which has passed. This year there is more acceptance that their spending power will not be the same for some while to come.
Our experience is that the toy market is pretty robust. Our sales obviously accelerate at this time of year, although we are likely to see the average price of toys go down compared with this time last year. However, the stimulation that we have from retailers will mean our volumes will be up considerably by the end of the year.