The age of the Millenials comes with multiple changes in the customer buying patterns. This generation is known to be filled with smart and practical spenders. This is because we are growing up in an economical crisis, wherein the price of living doesn’t match the common man’s income.
Hence, consumers are on the constant lookout for new ways to keep their expenses down. This has given rise to the latest trend in the consumer market; subscription services. Currently, this industry is dominated majorly by clothes, easy-to-make meals and even transportation like cars and motorcycles. Literally, there are very few items that you can’t have delivered to your doorstep and then exchange for something else.
However, now the industry has moved into a new market and has started targeting a younger demographic with toy subscription services.
Providing subscription-based services for children is actually a brilliant strategy as these young consumers are growing rapidly and need new products very often. Right from outgrowing clothes to getting bored with toys, parents are constantly purchasing new items for this toddle tots.
However, by opting for a toy subscription service, parents don’t need to spend money on toys that their children will forget about in a month, and children get the constant excitement of playing with a new toy every week or month.
The benefits of launching a toy subscription service are vast, hence, this industry is brimming with potential and perfect for a billion-dollar business. In this article, we will discuss the market potential of this industry and how you can make the most of it.
The Market Potential
The need for subscription boxes is growing phenomenally. In the past five years, the subscription box market has grown more than 100% year-on-year, and experts have further analyzed that the growth of the industry is unstoppable in the near future. In fact, in 2018, there were over7,000 subscription box companies present worldwide.
Moreover, according to a recent study, out of the five product categories that drive the most growth in subscription boxes; lifestyle, food, beauty, pets and kids, children subscription boxes is the one category that has grown tremendously lately. Pinterest too reported a 441% hike in the number of toy-sharing searches that took place on their site last year.
Hence, it goes without saying that the market for subscription boxes for toys is on the rise. However, similar to every industry, this niche has a certain room for improvement as well. Especially considering the amount of competition present and the sensitivity of the industry as it’s related to children.
The Gap
While the toy subscription industry surely comes with its own set of perks, there are some issues too. For example, multiple parents have ceased to use toy subscription services because they have complained of receiving dirty or broken toys. Moreover, a very common complaint has also been that once they’ve returned the toys back to the company, it’s taken a lot of time for a new box to be delivered. Not only does this make the child impatient, but it also eats into the subscription period.
Moreover, companies have faced massive losses as when it comes to toy subscription boxes, there is no sense of ownership among parents and kids. Hence, the toys returned are often damaged. More often than not, the company has to bear the charges of repair or replacement in such cases.
Lastly, a major gap in this industry is immense competition. There are many subscription services offering almost the same toys at various price ranges. But, that’s not all. Businesses in the niche also need to bear the brunt of competition from brands like Amazon that deliver good-quality products at low prices almost everywhere.
Hence, it’s incredibly difficult to create and sustain a loyal customer base for a business in this niche.
However, a good entrepreneur knows how to effectively tackle these situations and create a full-proof business plan that ensures the company does exceedingly well and turns into a billion-dollar empire.
The Opportunity
Ideally, the idea of a toy subscription box is pretty straightforward. A customer signs up for the subscription and receives a box of toys for a month. Then, they return the box at the end of the month, wherein they get a new box.
However, to make a mark in this overcrowded industry, you need to understand the importance of targeting the parents and the kids. This service is for both of them, hence your offering should be focused on both. Right from marketing your service to the features you offer, you must provide benefits for both the target audience if you want your business to stand out of the crowd.
For example, instead of forcing parents to clean the toys before returning them, you can offer proper cleaning and sanitizing services before sending the toys to a new child. This ensures that the parent doesn’t have to take any extra effort, and they can rest assured that the toys are clean and safe for all their children to play with.
Moreover, you should bifurcate your toys into different categories and allow parents and children to choose which toy they want to play with. This will ensure that the toys delivered to match the requirements.
Many-a-times, subscription companies assume what type of toys children want to play with. For example, boys get cars and girls get dolls. However, not every child is the same. Moreover, parents are making gender sensitization a must, as parents are encouraging their children to participate in activities that are typically associated with the opposite gender.
Hence, you should leave the choice of toys in the hands of the parents and the child instead of using stereotypes.
Another added benefit you can offer that will help you garner a larger audience is the variety of toys. Almost every subscription service offers the same toys, with a few exceptions. Instead, you should add a balance of the new and the old. For example, toys are greatly beneficial in helping children become more imaginative and creative. Hence, you should use toys that help enhance these skills in children. Don’t forget to add some classic toys too, to ensure there is a balance between learning and fun.
In all, a toy subscription service is highly beneficial as it provides a great variety of toys for children to play with, without parents having to purchase them. If executed well, a toy subscription service can surely become your billion-dollar empire!
For more business ideas and tips and tricks to become a successful entrepreneur, keep reading The Money Gig.
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