A World with Fewer Children; Some Ideas on What the Toy Industry Can Do to Get Ready

November 16, 2009

I continue to track the, at least to me, bizarre phenomenon of a steady decline in the world’s fertility. We are undergoing a totally unprecedented and history making shift in population growth…we are not replacing ourselves.

So, I just had to pick up the October 31^st – November 6 issue of The Economist. The picture on the cover depicting a baby in free fall and the words “Falling Fertility” demanded that I buy the issue. I am glad I did.

Here is the opening paragraph:

Sometime in the next few years (if it hasn’t happened already, the world will reach a milestone: half of humanity will be having only enough children to replace itself.” The article goes on to say that “[the] move to replacement level fertility is one of the most dramatic social changes in history.”

It sure will be for the toy industry. How does an industry that sees itself as being in the children’s business manage its way through a world in which there are fewer children?

Well, here is my answer: Make better, higher priced products that appeal to a broader audience. Populations are declining because people around the world are becoming more urban, more educated and wealthier. People with money and education are far more likely to use birth control.

This means that the toy industry will be servicing a declining number of more affluent children. Parents and grandparents are far more likely to spoil children if there are fewer of them. Make better toys for higher prices and the industry can make up in dollars what it loses in units.

Educated and wealthier adults have more leisure time. This means they will be looking for “toys” with which to amuse themselves. By marketing to adults the industry can make up for any dollars lost on children.

Bottom line, I think that the decline in fertility could mean a boon for the industry if it adapts to what is coming. It will be interesting to see how all of this plays out.

How do you feel the about the shift in fertility? Is it something to be concerned about? If so, what do you think the industry should do to adapt?

Posted by Richard Gottlieb on November 16, 2009 | Comments (1)

November 17, 2009

In response to: A World with Fewer Children; Some Ideas on What the Toy Industry Can Do to Get Ready
Dave Ference commented:

How significant are these statistics? It's hard to find accurate information on births, but there are about 4 births per second worldwide. If this figure fell to 3.5 births per second,that's still over 110 million births per year. Is this decline enough to warrant a paradigm shift in the toy industry? In addition, quoting statistics of declining fertility does not provide enough information. One would have to know statistics such as mortality rates amongst children as well. If the world population is shifting to more affluence, the newborn survivial rate would be higher (less children born, but more survive birth and infancy). That would actually increase the market for toys. You would also need to know what populations are skewing the numbers. Many of those declining births, for example, may be amongst children that can't afford food, let alone toys. That having been said, better quality toys is certainly a desirable goal.