Growing pains: What's changing the shape of the pre-school market?

It’s notoriously over-crowded, competitive and filled with potential for new advances with technology, segmentation and redefinition. Robert Hutchins takes a close look at the evolving pre-school space and where it’s heading towards
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There’s a new movement to redefine the pre-school sector currently on the boil. It’s been highlighted as a practical yet forward-thinking means of alleviating the pressure the sector is currently facing.

The pre-school sector is one rife with competition. Historically, the space has always been crowded. A persistently high performer in terms of retail sales, yes, and a lucrative hotbed for new IP, but ruthlessly competitive, all the same.

Bring into the fold the recent advances - or evolution - in the way entertainment is consumed today with the rise of our multi-screening culture and what we are currently looking at is a mind boggling statistic courtesy of the data crunchers at WildBrain: 400 hours of pre-school content is being uploaded to YouTube every minute.

It’s little wonder then, that when companies talk about the pre-school space, the underlying tone is that it is only poised to become vastly more crowded than it currently is. And what do we have to thank for this?

Amanda Gummer, founder of Fundamentally Children tells ToyNews that the explosion we have witnessed in the preschool sector over the past couple of years is made up of a tri-factor of societal changes.

For a start, changing parental styles have played a key role, this is followed by an increased understanding of how children develop today, but the biggest and and most influential factor has to be the rise of our on-demand culture.

Let’s call it multi-screen living. That state of existence most, if not all of us - like it or not - find ourselves immersed in. Ask your local independent toy store owner what has been the biggest impact on business over the past 12 months, two years, even half a decade and it’s guaranteed that ‘online advancement’ will feature within the top five.

It was certainly the result of ToyNews’ own cross section survey of UK independent toy retailers this month. 80 per cent of those asked cited ‘the internet’ as the biggest vehicle of change to their business; whether that is home shopping, family entertainment or in the new modes of children’s play time.

It’s as Little Tikes' head of UK marketing, Michelle Lilley suggests: “Babies and pre-schoolers are being born into a world where consumption is constantly increasing.”

In the multi-screen and on-demand environment we all now operate, never have kids been more engaged with the wealth of entertainment content offered to them across a multitude of platforms. Equally, never before has there been more content vying for their attention and more companies each trying to take a slice of the pre-school pie with new ranges fighting for shelf space.

“On-demand viewing has played a huge role in the explosion of the pre-school sector, as has the massive increase in mobile,” Gummer tells ToyNews.

“Having content that parents can have on their phones or tablets that they can just pull out wherever they are massively increases children’s engagement with the content and thus their attachment to the characters and recognition of merchandise.”

But what if there was a way of breaking this content down into sub-categories within the pre-school sphere? Would that ease the pressure of what makes the cut as your pre-school offering for the year?

At the start of the year, Amanda Gummer, an expert in child development, partnered with DHX Brands, a specialist in children’s and pre-school entertainment - and brand owners of the likes of Teletubbies, In the Night Garden and plenty more of those staples of the pre-school scene - to introduce a new First Steppers initiative.

The idea was to add more diversification to the pre-school sector. Its concept: to target the younger end of the pre-school sector with the aim of alleviating some of the pressures felt in that overcrowded and sweeping category.

“Pre-school is one of the most crowded and challenging sectors in the licensing industry,” Charlotte Hill, senior brand manager at DHX Brands, explains.

“Children develop faster between the ages of six months and five years old than at any other point in their lives, and the developmental differences between the higher and lower end of this demographic are vast.

“In contrast, the industry tends to present all products, content and brands for children in this age band together as ‘pre-school’, with little differentiation.”

It is the belief of Hill, along with Fundamentally Children’s Gummer that in rethinking this “broad category”, bigger opportunities for licensees, retailers and brand owners will present themselves. Alongside this, it will benefit this vitally important consumer group as it continues to wade through the reams and reams of content, toys and branding that is presented under the one umbrella.

The sentiments are not isolated to those that sit in the content creation sphere; far from it. On the front line, retailers are calling out for a strategic reformation of what we know and believe to be ‘pre-school.’

Sam Broad is the owner of the independent Cambridge toy shop, Lighthouse Toys. As such, she is well-positioned to place what the broad age-range the term ‘pre-school’ covers in very real terms for retailers.

“The span of ages within that frame is just too wide,” she tells ToyNews.

“Within our shop and website, we display the toys according to age. Newborn up to 11 months, then one year olds, two year olds and three years plus. We have found that parents won’t buy a toy labelled three years plus even if, developmentally, it is suitable.

“On the other side, I would prefer toys that are more suitable for six year olds not to be labelled three years plus. We need, as an industry to go away from putting ages on toys.”

It’s timely in that case that the First Steppers initiative from DHX Brands and Fundamentally Children is singing from the very same hymn sheet. The concept itself introduces a new sub-category, between nursery and pre-school, for brands which meet the socio-developmental and entertainment needs of children aged six months to two and a half years.

Thanks to brands like Teletubbies, In the Night Garden and Twirlywoos - all aimed at First Steppers - DHX boasts an “intimate understanding of this age group”. It also believes that this knowledge of the new sector will eventually feed into product development.

“I think toy companies also need to understand how children of all ages engage with content, and to have a clearer break-down on the age of the children watching the show - their cognitive and physical development needs to play a key part,” continues Hill.

“The difference between how a two and a half year old and a four and a half year old plays is huge. For example, plastic characters need to be a lot chunkier than those at the upper end of pre-school as very young children are not as dextrous.”

But just how far away is this from implementation? Well, the concept has only been in play for around ten months, but already it has received backing from the British Toy and Hobby Association, as well as those at LIMA - the licensing industry body - and Brand Licensing Europe.

OK, it’s not earth shattering, yet, but with industry experts behind it, the initiative is only looking to pick up momentum.

“We are very excited about the possibilities that First Steppers could have on the industry,” says Hill.

"We have begun the dialogue and, while we are only at the beginning, we are hopeful that it will start to be considered more by the industry and eventually taken as a new demographic.

“We firmly believe that every stakeholder benefits from this preschool segmentation. By understanding children’s needs, the needs of their parents and their shopping habits, we can better meet them.”

Together, Hill and Gummer are looking to broaden the licensee base to provide “extra choice which, along with improved products, will encourage retailers to make it easier for parents to find what they want,” all, they suggest, “leading to increased sales.”

But let us not forget the key catalyst behind this pre-school explosion in the first place, the new kind of playground that technology has brought to the toy sector itself. It’s no surprise that ‘screen time’ has and continues to drive a divide among those in the toy industry.

Lighthouse Toys’ Sam Broad laments what she cites as a ‘growing dependency of children on screens’ in favour of traditional play time.

“My concern is that pre-school children are being entertained by screens and they are not playing with toys,” she decries. “3D play is more important to a young child’s development than a 2D screen.

“Children need to be talked to and communicated with by their parents and other adults. We get saddened by some customers who ask for toys that the children can play with on their own…”

However, we have to ask, just how big an issue is the notion of ‘screen-time’ really? Brands like Little Tikes - perennials in the pre-school market - for instance, have found the new platform for entertainment to be an empowering one, for brands and consumers alike.

“Babies and pre-schoolers are being born into a world where consumption is constantly increasing, as is the pace of everything around us,” Michelle Lilley, head of UK marketing at Little Tikes tells ToyNews.

“On-demand viewing gives us the authority to be ever-selective, plus the time and capacity to watch and do more. At Little Tikes, we embrace technological advances and modern media as it creates new routes to engaging with our consumers and giving them more control than ever before.”

Of course, Little Tikes will forever be rooted in traditional play with a mission statement of bringing innovation through via the kind of concepts that over the last few years have found themselves truly embedded in the pre-school fold.

“The pre-school sector is constantly and consistently developing, which presents immense opportunity for classic and innovative toys alike. At Little Tikes, we have launched many new products in this category over the last two years, with ranges such as Light ‘n’ Go and Wheelz - and the most recent being STEM Jr,” continues Lilley.

“Our pre-school range aims to build imagination and create new memories. Educational toys are at the forefront of the category and our STEM range is leading the way, with products such as the Wonder Lab and the Builder Bot, which introduces youngsters to engineering through play.”

Lilley would be the first to accept the competitive nature of the pre-school sector. However, it is by striking the balance between the traditional and the digital that she believes retailers now have a “fantastic opportunity to engage with consumers.”

“Online merchandising can be met with in-store theatre and POS demonstrations,” she says, “and the constant mix of licensed and core branded products available now offer a huge assortment for retailers to choose from.”

But what of the fears of what ‘screen time’ is doing to the traditional concept of ‘family time’? Is it truly distancing parents from their children? Not if you are of the same train of thought as AR technology developers Weyo, the team behind a new preschool app game that utilises the advancing Augmented Reality technology to “enhance family play time.”

The app is called Fun Time with Faces. It’s a new technology that aims to immerse children into songs, stories and games with their favourite entertainment characters for an interactive AR experience. It’s goal is to deliver something more than the simplistic ‘tapping and swiping of screens’ that presents interactive experiences to allow kids to ‘develop confidence through experimentation, and to use their imaginations to sing, act and role play.’

“We ask children to ‘wonder who they will be’ and, through the magic of AR, they become their favourite characters with the ability to do the things those characters would do,” explains Baz Palmer, co-founder and CEO of Weyo.

“In the Fun Time with Songs house, the child is automatically edited into Wiggles videos with AR masks added to their faces, so they become one of the characters in our videos.”

What Palmer loves about the concept is the way Weyo and the technology can help bring families together at a time in which screens are so often seen as the enemy.

“Whether it’s jumping into the video or photo, wearing fun masks or creating unique content together with their child, then being able to save these videos and photos to your iPhone or iPad to view them back together, or share with other family members is all key to the experience.”

The possibilities that AR presents in the pre-school sector, or indeed any toy category, are exciting. As Palmer suggests: “AR lets you be the character and that freedom allows you to go beyond the you that you are…”

Are we nearing an age in which this kind of technology is considered a fundamental part of the pre-school offering? Palmer believes so, yes. What’s more, he wants to ensure Weyo is leading the way for it.

"This is just the start for us, we have many more tricks up our sleeves. The more immersive we can make those experiences become, the greater the possibilities for opening up other avenues to explore the way children learn,” he says.

"Our future product roadmap is insane in a fun, but also an educational way.”

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