The Underconsumption Core Trend and Its Impact on the Toy Industry
The Underconsumption Core TikTok trend has rapidly gained traction in 2024, resulting in major impacts on the toy industry. Underconsumption Core, a term coined by Gen Z and millennials on TikTok, is characterized by making every dollar count by being more selective and mindful of your spending by searching for products that provide lasting value. Driven by the increase in living costs and widespread budgeting efforts, this trend is almost a reflection of what we saw in the 2008 recession when low-cost, high-value toys and games were the heroes of the toy industry. The only difference? Customers aren’t just looking for cheap thrills. They want toys that matter, worth the effort they’ve put in to get them.
The 2008 Financial Crisis
In February of 2008, an article by NBC was released that stated that as the economy fades, toymakers stress play value. They covered what kinds of products the toy industry was releasing at the time before anyone had an idea of what was to come.
During this period, toy manufacturers released their items at high prices, such as Hasbro’s talking parrot for $69.99 or Leapfrog’s tag reading system for $49.99. There were even products up to the $300 range, such as Hasbro’s robotic golden retriever for $289.99 or power wheels cars at $289.99. This was due to the toy industry’s heavy bets on highly innovative, high price, and heavy robotic items, though analysts believed most parents were not going to be spending that kind of money on their kids.
Moving forward, on September 15th of the same year, the market crashed, conveniently at the start of the biggest quarter for the toy industry, Q4, when the industry generated 70% of its revenue. During this time, toy industry sales dropped 3%, but building sets and plushes saw growth of 26% and 22% respectively. However, vehicles dropped 16%, electronic sales 17%, and dolls 10%. This matches up to changes in the toy industry during the COVID-19 pandemic when we saw an increase in sales for squishmellows and other comfort plush toys.
Why was it that the industry managed to not suffer too much after a major financial crisis, with our 2009 numbers showing that the market was less than 1% down from the 2008 numbers? What were people spending on?
Resilient Categories
Regarding the 2008 financial struggle, certain categories performed better, known as resilient categories. These included arts and crafts, building sets, and games and puzzles, all of which weathered the 2008 financial storm, suggesting these could be strong contenders for future toy releases. To elaborate, during this period, there was an increase of 26% for sales of building sets and 7% for arts and crafts toys. These items are those that have open-ended play patterns, extended entertainment values, as well as attractive price points, all of which perfectly align with a customer’s needs during times of financial struggle.
Nonresilient Categories
On the other hand, electronics in the toy industry saw the largest decline of 17% in 2009, followed by plushes. The latter may have been due to the fact that the majority of the plush in the market at that time was electronic plush, not the low price point, collective plush of today.
What we can learn from the events that transpired in 2008 is how consumers are likely to react in the case of unfortunate events. Consumers are more likely to not spend till Q4 and even then, would want discounts. They will also tend to take an interest in arts and crafts, building sets, and plushes that offer real play value rather than just being for comfort. Due to economic instability, consumers are becoming more discerning and are mostly drawn to high-quality, multi-use products, which is where Underconsumption Core comes in.
The Rise of Underconsumption Core
To reiterate, the underconsumption core is a trend driven by a desire for lasting value due to the challenges of a high cost of living and focus on budgeting, resulting in the demand for durable, multi-use toys and the “Underconsumption Core” aesthetic. It is a movement gaining momentum rapidly on TikTok due to its nature of being environmentally and financially aware, combating the problem of over-consumerism. People want to be more mindful in their consumption while also being aware of sustainability issues and the impacts their purchases have in the long run.
The underconsumption core trend started off when TikTok users posted videos of them repurposing products they have around their house, previously owned or thrifted. They were showing off how even very old products could still come in handy and be worth their value. There were also videos and images being posted of baby accessories and toys, which became widely loved under the underconsumption core trend for the baby side of the toy industry. Baby toys are moved on from quickly due to how fast kids grow at that age, and this repurposing and passing-down of toys was loved for being a great, sustainable option for parents.
Some people in the toy industry thought they could use the underconsumption core trend to their benefit with their current products, but were proven wrong. Plan Toys tried marketing through the Underconsumption Core trend, by posting some of their wooden toys and how they are used under the trend. The video received little attention and even got snarky comments from users for not understanding the trend.
Due to this, the toy industry must actually research why consumers care about underconsumption core, what that means, and then market products that align with these values.
Underconsumption core in terms of the toy industry would be a product that a person can look at and see how it can live in their home for years and have multiple, useful uses.
The Impact on the Toy Industry
When it comes to the specific impact of Underconsumption Core on the toy industry, the trend may manifest into a demand for toys that are built to last and offer multiple forms of play. These could be products such as high-quality wooden toys to be passed down through generations or toys that both teach you and help you play.
As a whole, the underconsumption trend may serve as an encouragement for the toy industry to think more carefully about the use of our products by multiple age groups. This means having products that are high quality enough to be used in multiple scenarios and by both our children and other family members. For the toy industry, underconsumption core means being able to show the timeline or lifecycle of a product to our consumers.
To give an example, the toy industry currently packages products to show the product and a kid of one age, two genders, and maybe two ages playing with the product. Now, there may have to be a shift in packaging to market materials to kids of multiple ages or create stories involving multiple generations.
The toy industry must now focus on the underlying movement and missions of our customers, or ideal target market, specifically concerning underconsumption core. What do our consumers want? What are we not delivering that they feel they need to not buy new toys? What is it that we are not delivering to them in our messaging and product development? These questions need to be answered to somehow create products and marketing efforts that withstand the underconsumption core trend while also creating a lasting impression on the target market.
The Future of the Toy Industry
The toy industry must be prepared for anything, whether it be underconsumption core and worsening of the financial situation of consumers, or what needs to be done if it does stabilize. For the former, this means creating high-quality, versatile products with real value or affordable, collectible items. For the latter, it might mean the emergence of a new aesthetic in toys- a weathered and used look to reflect the earlier underconsumption of core products.
The bottom line is, the surge of Underconsumption Core has made it more than just a TikTok trend, and the toy industry must show their consumers that they create products of high quality. Rather than being ridiculously innovative, consumers will now be more likely to trust the companies that graced their lives with high-quality products, rather than the ones that immediately broke or served no purpose other than the one.
So, toy makers, take your time to really assess your ideas, think long-term, and ride with the underconsumption core trend in order to succeed in this ever-changing market. To learn more about underconsumption core, tune into Episode 232: The Underconsumption Core TikTok Trend is Shaping the Future of Toys by The Toy Coach to gain valuable insights regarding the impact of the Underconsumption Core trend on the toy industry through various lenses such as pricing strategies, revenue growth, and overall consumer behavior.
