Kids Insights

THE DIRECT APPROACH: WILL 2021 BE THE YEAR FOR DIRECT TO CONSUMER SELLING?

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Our latest research published in Toy News looks at one of the ten trends predicted in our annual Kids Insights Future Forecast 2021 Report. The rise of direct-to-consumer models in retail.

One of the trends from our annual Kids Insights Future Forecast 2021 Report is the significant growth in direct-to-consumer (D2C) or over the top (OTT) retail. Even at the start of this year, and before the widespread of Covid-19, The Insights People 2020 Industry Report identified that more than half of businesses predicted that their D2C revenue would increase significantly on 2019.

And like many other trends, Covid-19 has accelerated this trend with an increasing number of brands looking to reconsider and redevelop their approach.

We can see from our data, that this generation of children are increasingly financially empowered and enabled in their online attitudes and behaviours. In the UK, the number of 6-18 year olds spending money online has grown by 29% year-on-year and targeted financial products like GoHenry are making it much easier for kids to shop digitally, independently. In the last three months, a quarter of 6-9s in the UK have spent money using a debit card or a PayPal account, an increase of 32% year-on-year. There has never been greater potential, and need for brands to sell direct to their customers.

2020 has seen a number of brands increase their focus and investment in developing their D2C offerings. In the toy industry, Hasbro and Mattel have expanded their D2C operations in order to meet the growing demand for e-commerce. For these brands, the ability to sell direct to their customers increases the opportunity for them to increase advocacy between them and their target audience, be it through better customer service, a more immersive and personalised shopping experience, or encouraging interaction with the brand across alternate digital touchpoints such as their accounts on social media platforms.

D2C also makes it more possible for smaller, independent brands to reach an audience; cutting out traditional marketing middlemen, and communicating directly with their audience via social media platforms. Children are increasingly perceptive to messages within these platforms and we have recently seen a 10% increase in social media being the location of UK teens’ favourite adverts, nearing that of TV. Platforms such as Instagram have implemented integrated shopping solutions in app and in the UK, tweens on average dedicate more than £5 month to in-experience spending.

As the Coronavirus pandemic continues to cause significant disruption to bricks and mortar retail, we expect that one of the headline trends for 2021 will be the continued, accelerated growth of D2C retail across all aspects of the kids ecosystem. This generation of kids favour experiences that prioritise personalisation and co-creation, factors which D2C can facilitate. Brands will become more agile, more authentic and produce more personalised products en masse, through advancing technologies such as Augmented Reality and 3D printing.

The annual Kids Insights Future Forecast report, which makes 10 predictions based on its extensive experience of the kids’ ecosystem, and is available to download at www.kidsinsights.com/futureforecast

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