The kids industry faced its fair share of difficulties this year, but 2020 also highlighted bright spots of ingenuity. Rob Corney, CEO of UK-based Bulldog Licensing, believes this resourcefulness will lead to significant growth next year in the consumer products space, in spite of ongoing complications related to the pandemic. Check in tomorrow for his roundup of some potentially big opportunities of 2021.

Manufacturing and shipping

Unsurprisingly, delays in getting goods into the hands of consumers topped Corney’s list of 2020 obstacles. February saw manufacturing and shipping shut down in China first before spreading globally. In March, Amazon prioritized in-bound shipments of essential items to its fulfillment centers in order to receive, restock and ship products like medical supplies and household staples more quickly. Throughout the spring and summer, many retailers were forced to close their doors due to lockdowns.

And recent data shows these logistical issues aren’t about to end any time soon, with shipping delay rates for the 2020 holiday season expected to be twice as long as any previous year.

“There was a lot of confusion due to lots of different tiers of regulations across different territories,” Corney says. “That has caused real problems from a planning perspective. Our industry generally works 12 months in advance, so all of the plans we put into place last year were put on hold. It caused all manner of chaos in terms of having to rewrite paperwork.”

Moving forward, this will continue to be an issue for the industry, and IP owners and toymakers must budget for increasing fees related to shipping.

“I heard recently that the normal cost of a [shipping] container would be US$1,400, and companies are now being quoted US$9,000,” Corney says. “Some of the shipping companies have introduced ‘touch and go’ policies, which means that if your logistics aren’t ready when they arrive, they will take your products away with them again and it will end up at another port. Then you’ll have to pay forwarding costs. I don’t imagine these issues will be resolved until the middle of the year.”

China’s influence

While the kids industry is global in terms its reach, Corney points out that the world of consumer products is often very regional.

“When it comes to the creation of products, it’s basically China,” he says. “With everything originating in China, the shutdown happening there first had a huge effect on the supply chain. In fact, we’re still facing big logistics challenges.”

Toymakers and IP owners were forced to relocate their manufacturing efforts, consolidate through acquisitions, and implement costly new health and safety measures in order to restart the CP pipeline.

Some IP owners, like LA-based game maker Exploding Kittens, moved manufacturing earlier this year in an effort to avoid lockdown-related closures. As the pandemic spread globally, however, it became clear that manufacturers around the world were likely to deal with shutdowns at some point. Moving forward, it’s possible that companies will look to manufacturers closer to their consumers—not to avoid lockdowns so much as to cut down on shipping costs and times.

Content creation

The entertainment IP pipeline was equally impacted by COVID-19. Safety concerns forced live-action production to shut down for much of the year, though many animated projects were able to continue remotely. And global lockdowns meant theaters were shuttered, forcing a number of films to be pushed to 2021.

“One of the great ironies of this year is we’re consuming more content than ever, but the pipeline has been frozen,” Corney says.

With so many movies being delayed, the open shelf space that was created means toymakers with properties that don’t rely on content have an opportunity to increase their in-store presence. The early numbers are highlighting the trend: Market research firm The NPD Group shows that while sales for the US toy industry increased 16% in the first half of 2020, the movie-reliant action figures segment was down 12%.

Once theaters do re-open, that shelf space will be at a higher premium than ever. This will likely result in smaller toycos being pushed out of brick-and-mortar retail as the focus swings back to big brands and their tentpole toys.

In the meantime, content makers are working to get back on track, with a focus on streaming. NBCUniversal announced in March that Universal Pictures would make select movies available on-demand on the same day they were scheduled for theatrical release. Trolls World Tour was the first of Universal Pictures’ day-and-date release, and it went on to break digital records.

The House of Mouse is also turning its attention to streaming as the pandemic continues to adversely affect its parks, experiences and products category. And Warner Bros. announced earlier this month that its 2021 film slate will be available day-and-date on HBO Max.

“It’s something no business has ever planned for,” Corney says. “You plan for good years and bad years, but no industry ever plans for this. That makes it a very interesting moment.”