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Suzy Davidkhanian: Hi, everyone. Today is Wednesday, September 2nd. Welcome to EMARKETER's weekly retail show, Reimagining Retail, an EMARKETER podcast made possible by Verk. This is the show where we talk about how retail collides with every part of our lives, and I'm your host, Suzy Davidkhanian. On today's episode, we're talking about kidulting, the growing business of adults who play games.[00:01:00]

Suzy Davidkhanian: Joining me today are podcast regulars, Principal Analyst Carina Lam. Hey, Carina.

Carina Lamb: Hi, Suzy. Great to be back.

Suzy Davidkhanian: Nice to have you. And Zak Stambor. Hey, Zak.

Zak Stambor: Hi, Suzy. Hi, Carina.

Carina Lamb: Hi, Zak.

Suzy Davidkhanian: Okay, so the global toy market hit 123 billion last year, and adults are becoming an increasingly important part of that business. In fact, according to Circana, in the US, adults 18 and older drove 35% of toy industry growth through April just this year.

Suzy Davidkhanian: But adults playing games and buying collectibles isn't new. What's changing is how intentionally toy companies are going after them. Lego has Botanicals, Crayola launched All Grown Up, and this summer, even Play-Doh introduced an adult toy, Blooms, a floral crafting kit designed specifically for adults. So today, we're getting into what kidulting actually means, why this longtime behavior is getting so much attention right now, and how far can brands [00:02:00] take it before smart growth strategies feel a little too gimmicky.

Suzy Davidkhanian: But okay, before we get started, I want to ask each of you, what's the last game you bought for yourself? And here, because maybe you have not been participating in kidulting, I'm okay to go with stuffy or memorabilia, cards, some kind of fandom thing. Carina?

Carina Lamb: Okay. So, so not just games, we're including kind of toys more generally.

Suzy Davidkhanian: I mean, because I don't peg you guys as buying toys-toys.

Zak Stambor: Yeah. So I bought a Lego set. Um, my younger son is very, very, very into Legos right now. Um, in particular, like, the very complicated, like, modular sort of Lego sets, like just behind me is, like, a whole city of stuff. Um, and so for Father's Day, we got a set to do together.

Zak Stambor: So we built, um... You know that, like, lamp [00:03:00] that's the Pixar, like, logo guy? Oh, yeah. Yeah. We built that as a Lego set, and it was great. It was very fun and a, a great activity to do together.

Suzy Davidkhanian: A present for you. It was

Zak Stambor: a... Yeah. Yeah, I-

Suzy Davidkhanian: But it kind of feels like, mm, I don't know. But this is a good thing, 'cause you know what?

Suzy Davidkhanian: Me too, Carina, I haven't bought myself a toy. Yeah. I don't know if playing games on my phone counts as kidulting. I'm not really sure, but maybe that's the great way to start, which is like, what is- I- Yeah, go ahead. Did you-

Carina Lamb: Oh, I was just gonna say, I will say that I s- I probably don't buy toys 'cause I spend all of my money on my horse, and that, uh, that's probably also me living out my childhood dreams, right?

Carina Lamb: Oh. Taking my horse to, like, pony club camp. So I think I'm kinda doing it, just with a more expensive toy.

Zak Stambor: It is kind of a similar sort of- It's the same thing ... yeah, you're hitting the same-

Carina Lamb: Yeah ...

Zak Stambor: note in a different way.

Suzy Davidkhanian: Yeah. Well, let's talk about that then. What, when we talk about kidulting, what is it that we're actually talking about?

Suzy Davidkhanian: Is it that adults are buying toys, like you guys did, Zak, that are intentionally made for children, [00:04:00] or are brands making new toys, they're creating things for adults specifically for that experience?

Carina Lamb: I think it's both and all things. So I think it's adults buying toys that were kind of traditionally associated with children for themselves, and some of them might be collectors, but I don't think it's just limited to collectors.

Carina Lamb: I think adults do also just buy toys sometimes for themselves. And then I think you also now have a toy industry that's recognizing them as a really potentially valuable market and making toys that are intentionally designed for adults.

Suzy Davidkhanian: And Zak, do you think some of that has to do with nostalgia? The toys that are what we once used as children that are now coming up.

Suzy Davidkhanian: Like, I am really stuck on the Play-Doh Bloom crafting situation. Like, what adults are buying Play-Doh if it's not specifically targeted to them to make crafts?

Zak Stambor: Yeah, I think it is 100% nostalgia. I also think it's the, um, [00:05:00] the way in which nerd culture and fandom culture, um, have just gone mainstream. They used to be these niche sort of things, but as they've moved into the mainstream, it has become just kinda normalized that people are into Star Wars and they wanna, like, collect Star Wars figurines and, um, collect baseball cards and, and do all these sorts of things that, like, they did as kids, but now y- they're finding new ways to do them as a- as adults.

Carina Lamb: And I think social media has something to do with that as well, doesn't it? It becoming kinda more mainstream, more culturally acceptable now. People who perhaps have collected these things and have kind of thought previously that perhaps it's behavior that's slightly childish, they've now found a whole community of other people doing it, and it's all become much more socially acceptable generally, um, to, to still buy toys as an [00:06:00] adult.

Zak Stambor: I think that's right, and I think, like, the pandemic also brought some of this to light as people were looking for things to do just to, like, occupy their time. They might have bought a Lego set and found that they liked building Legos. It's relaxing. It's fun. It's engaging. Um, and in some ways it's also about connection.

Suzy Davidkhanian: Mm.

Zak Stambor: You know, like Pokemon cards. The, you can go to a Pokemon... the, these trading card stores and it's, like, really a, a point of connection to open cards, trade cards, engage with other collectors and, and, like, build deeper connections around this thing.

Carina Lamb: Yeah.

Suzy Davidkhanian: So it sounds like it's three different sort of avenues, if you will, right?

Suzy Davidkhanian: It's folks that are older than 18, not children, that are playing random games, like board games, game night. Not new. We've been doing it for a long time. There's this idea around fandom and collecting, like you said, the Pokemon cards with the app, that you're collecting them as you're traveling. [00:07:00] That's not new, but it's this maybe this idea around nostalgia and buying things that are made for you, but that remind you of your youth.

Suzy Davidkhanian: And so is that what toy companies are paying more attention to? Why now?

Carina Lamb: I just think it's got to the point that it's kind of such an important valuable part of the market that they can't really afford to ignore it anymore and not completely capitalize it on a, on a, as a trend. Um, so if you look in the UK, I think kidults, although they do, to kinda classify them as over 12s in the UK, um, but roughly one in every three pounds spent on toys is spent by over 12s for themselves.

Carina Lamb: And if you look at the, like, fastest growing categories, building sets are the fastest growing category last year. Um, and that was things like Formula One and Lego Botanicals, so it is those sets that are perhaps aimed at a slightly older audience. Um, and similarly, collectibles was also a really [00:08:00] fast-growing segment.

Carina Lamb: So, and while that's over the age of 12, I think there was some more data of nearly half of UK adults, so that's 18 plus, have bought a toy for themselves or another adult during the year. So it's this really kind of fast-growing part of the toy market which is showing the most momentum, and toy companies have realized now that there's an opportunity in that, and that they can make more by kinda creating toys that are specifically aimed more at the adult market.

Zak Stambor: Yeah, the opportunity is really what it's all about. These people have credit cards. They have disposable income, and they're ready, willing, and able to spend all year long. You know, traditionally, toy sales have been largely concentrated in the fourth quarter. But these people who are, who are buying adult coloring books or Play-Doh or collectibles, they're, they're just doing this all year long.

Suzy Davidkhanian: Right, and it feels like They were doing this all [00:09:00] year long. They've been doing it... Apparently kidulting is from the 1950s, so it's not something new. I know, I couldn't

Zak Stambor: believe that.

Suzy Davidkhanian: Right? So it's not something new. They've been doing it all along, but all of a sudden, maybe toy companies are like, "Oh no, kids' birth rate is declining."

Carina Lamb: Yeah. "

Suzy Davidkhanian: I need to figure out how to capitalize on this new," as you guys are saying, "this sort of newer segment," which is intentionally creating something for you versus encouraging you to go play Dungeons & Dragons more. And for me, one of the things I saw Mattel do was these UNO parties. Did you guys hear about that?

Suzy Davidkhanian: Where they're finding select markets and throwing parties for people to go play UNO.

Carina Lamb: Oh, wow. Cool. Love a game of UNO.

Suzy Davidkhanian: Yeah. Me too.

Zak Stambor: And that gets back- Yeah ... to what I was saying about, like, finding points of connection- Mm ... and using these as a means of, of deepening relationships and engaging with people.

Zak Stambor: And I think- UNO is fun. It's fun to play UNO, and, like, I, I would go. I would go play that.

Carina Lamb: Mm. And I think unplugging too, right? Like, getting off [00:10:00] our screens, getting off our phones, having something which is, um, reminiscent of our youth when we didn't have all of those things. Um, and I think especially in the world that we live in today, um, there's kind of times of economic difficulty.

Carina Lamb: People are having their income squeezed and things were already stressful, and toys give this kind of escapism. They give some joy, and they're a relatively inexpensive purchase, so you've also got that kind of lipstick effect going on. It's people cheering themselves up with a little treat, which, you know, compared with a lot of other things that you can buy or a night out, is, is really affordable.

Suzy Davidkhanian: It's like a perfect storm. The- they're already doing it. They have the money to do it, and they're all stressed. And like we're seeing in retail, a lot of people are going back to stores and stop sec- second screening to go back to stores and live experiences, and so now they're turning that... Sort of the toy companies have understood that and are turning it into tactile experiences, whether it's in your home as a group, out [00:11:00] at a food court.

Suzy Davidkhanian: There's a food court by me that has... I mean, it's a New York food court, so it's not a mall food court, where they do game nights, and I've been seeing them playing games forever. And it's everything from Risk to card games. It, it really is something that's ballooned in a way that I just hadn't ever noticed before.

Suzy Davidkhanian: So if it is ballooning, what do toy companies need to do? How do you decide which are the brands that matter? Or, like, what products do you lean into and you have permission to keep moving from a child's toy to an adult toy with the IP from that, from that toy company?

Carina Lamb: I don't think that you just being kind of an old or a toy from your childhood is enough.

Carina Lamb: I think you need to have that kind of enduring emotional relationship, but also a kind of credible adult use case. So is it something that's gonna give some creative satisfaction, or relaxation, or a challenge, or connection, like Zak says? So I think you need both elements there really. I [00:12:00] don't think you can just take a child's toy and slap on, you know, put the price up and slap on an over 18 and, and there you've got it.

Zak Stambor: I think you kind of can, though. I mean, and I- Right? I mean, I, you, you... I look at, like, what Play-Doh is doing, and I, I look at, like, what Cray- Crayola has done, and it's certainly not the exact same thing, but it is a slight twist, and it's like an upscaling of the experience, whether it's an ad- an adult coloring book or playing with Play-Doh.

Zak Stambor: Um, but it's not markedly different from what it, what those things are for children, right? I

Suzy Davidkhanian: mean, I think the underlying... I mean, you have to be sort of true to your brand promise, right? So the underlying brand promise, Crayola Creatives, you know, it's the same, but it does feel like an elevated, you know, experience for an adult audience, no?

Zak Stambor: Yeah, I mean, I, right. You can't, uh, uh, to Carina's [00:13:00] point, y- it can't be exactly the same. But I, I think you, you take those, um, those signals that, that... or the, um, you take that experience that people are familiar with, that they engaged with as a child, and create something new and build on that. And I think that's what w- whether it's, like, arts and crafts brands or other brands, um, leaning on, on IP, I think that's the path forward, is you take something that's familiar and you build on it for an, uh, an older audience.

Carina Lamb: I mean, adults will buy toys that are just staying for children, right? Because that's why this happened in the first place. So this was happening before toy companies were making toys aimed at adults. So I think, Zak, you're right in that you kind of can do that. People will buy them. But I think if you want to expand your adult audience that are gonna buy toys, then you need to add something else.

Carina Lamb: So, like, the Lego sets for adults perhaps just have that added [00:14:00] layer of complexity. So again, I think it's kind of both, isn't it? Like, there will be adults who just buy the toys because they want the toys, but if you wanna have a bigger adult audience, you need to maybe layer in something else.

Suzy Davidkhanian: Some smart extension.

Carina Lamb: Yeah. But like Zak said, it's kind of sticking true to the ethos of the

Suzy Davidkhanian: brand Yeah. And that's what makes it renewable versus a one-time chasing a trend.

Carina Lamb: Yeah.

Zak Stambor: Right. It just needs to make sense, essentially. It, it, it, it can't be dissonant with the brand. It needs to, to link arms with what already exists.

Suzy Davidkhanian: And do you guys feel like marketing and maybe even merchandising plays a bigger role to try and target this? Because it's that net new consumer, right? They might be buying the LEGO sets for their kids and also doing the LEGOs with their kids, but then there are these much harder sets that are truly aimed for an adult.

Suzy Davidkhanian: Is it all about the marketing and the merchandising, then? [00:15:00]

Zak Stambor: I think so. I mean, one of the stats that really stood out to me in the Circana data was that, uh, adult-only households accounted for 55% of toy sales, which was up 16% year over year. So that's households that do not have a child in the house, so they are not like me doing this set with my son.

Zak Stambor: They're just people doing a very complicated set, which there are many of them that are explicitly labeled 18 and older, 16 and older, whatever it might be, and they have, like, 10 gazillion parts. Um, and they are very squarely aimed at adults. Um, and so I think the, the marketing toward that audience and with, um, auxiliary pieces like, uh, to, to, uh, with LEGO, like the TV show, LEGO Masters, showing adults building with LEGOs, models that behavior and shows how [00:16:00] it's actually kind of fun and engaging and intellectually stimulating to, um, to build-

Carina Lamb: Yeah, and I think you've got some brands making that kind of segmentation quite explicit between their adult toys and their children's toys.

Carina Lamb: Um, Build-A-Bear has a Bear Cave, which is intended for shoppers aged 18 plus, and all of its kind of bears aimed at over 18s are in that separate area of its website. Um, so I think we are seeing brands start to do that kind of explicit segmentation a little bit.

Zak Stambor: And Crayola, too. I mean, it, it's like alcohol-based markers that, like, look and feel and function very differently than the rest of their marker, um, products.

Suzy Davidkhanian: I do think so. You have a different product in this instance, right? It is important to think about how you're marketing to them, and Carina, you talked about this up top. It's like using social, you know, thinking about the [00:17:00] experiences that you're creating, pop-ups that are geared towards an adult audience versus a mixed audience perhaps.

Suzy Davidkhanian: Um, I'd, in doing research, 'cause you know, this Play-Doh Blooms is really, has struck me in a way that I just can't quite get. But it turns out that they worked with The Whitney Museum, and so they, like, launched on TikTok and through The Whitney Museum, sort of like a one, two, three, and then it- the third being retailers.

Suzy Davidkhanian: And so I think it's thinking through how you're gonna reach that new potential customer in a way that speaks to them, too, is probably helpful.

Carina Lamb: And I don't think I'm that surprised by Play-Doh. Do you guys have Hobbycraft?

Suzy Davidkhanian: No

Zak Stambor: No

Carina Lamb: In the UK- Okay, so Hobbycraft is a retailer here, and they sell just loads of arts and crafts and sort of- Oh, like Michael's

Carina Lamb: every different art craft. Oh, like Michael's, yeah I'm sure you guys have the same thing, right? Mm-hmm. And that's been huge for ages. And again, that's, it's that same use case. It's the creativity, unplugging, doing something with your hands. Like, I think it's something that people have always enjoyed as adults.[00:18:00]

Suzy Davidkhanian: Definitely crafting-

Carina Lamb: Yeah ...

Suzy Davidkhanian: is not a new-

Carina Lamb: No

Suzy Davidkhanian: Yeah, that's, that's for sure. And then the other thing we were talking a little bit about earlier, this idea around the collectibles, the blind boxes, the easy, you know, like find different ways, you were talking about the Lego and the, the adults building Legos and folks watching them build Legos.

Suzy Davidkhanian: Is that also part of it? It's like finding things that are sort of energizing for adults in ways of introducing?

Zak Stambor: Yeah, I think the element of surprise and, and delight is, I, people love gambling, right? Like, and this is low stakes gambling. Um, but it, it ele- it creates, uh, an element of fun when you don't know what is in the blind box, when you open a pack of baseball cards, when you open a pack of Pokemon cards.

Zak Stambor: It, it's, it's [00:19:00] fun, and it's, uh, uh, it's also, um, something to talk about and engage with because there are likely other people who also like doing this behavior, and you can share that sort of experience. And, and when you do strike on something that is great and a, a valuable baseball card, um, it's something that you're proud of, you wanna share, you wanna highlight, you wanna talk about, and it creates that, again, that connection.

Suzy Davidkhanian: I think that's a great place for me to ask you two rapid fire questions. So if you are not a toy company, what do you learn from this trend? What's the one thing a non-toy brand could learn around finding or building or creating an adjacent product to bring in a new customer?

Zak Stambor: I think the m- most basic thing is identif- [00:20:00] l- looking beyond how you have traditionally thought about your category.

Zak Stambor: You know, toy companies had long thought like, "Oh, we're a toy company. We serve kids." And then y- you start to look into your data, and you start to see some adults buying Legos. Um, and you leaning into that, um, that overlooked customer and then building on that and, and introducing different ways to reach that audience.

Carina Lamb: Yeah, I, I completely agree. I think the most important lesson here is don't be blinkered when you're kind of defining your customer base. I think it's very easy to make assumptions and think about the customers that you have. And I think that, that another kind of interesting comparison here is the, I think we call it sometimes the silver pound in the UK.

Carina Lamb: Those kind of the fact that you have baby boomers who have really high disposable income, really good brand loyalty, and yet you [00:21:00] get a lot of brands who are just obsessed with the kind of Gen Z and mille- millennial audience base. So it's really paying attention as to who's actually buying your brand, and like Zak said, if there is a kind of niche group, if there's a smaller group that are buying your brand, find a way then to make it relevant to them.

Suzy Davidkhanian: So with that then, what's one thing brands can learn from how the toy industry has made an age-old behavior feel new again? Carina.

Carina Lamb: This is a really hard question. Um, I think the, the kinda toy industry haven't invented this adults playing thing. As we know, this is a behavior that's stretched for a really long time.

Carina Lamb: But what they've helped do is that kinda cultural relevance, that social permission, by reframing it as something else. So it's kind of stress relief, it's unplugging, rather than immaturity or child- childishness. Um, so I think any brand that's perhaps sitting on a behavior that people are already doing [00:22:00] but might feel a bit sheepish about has that same opening and that same opportunity.

Suzy Davidkhanian: It really is about leaning. For me too, it was about, like, find that cultural moment that you can plug into. Yeah. So maybe it's digital detox. Yeah. And, and lean into that. Yeah. Zak, what about

Zak Stambor: you? Yeah, I really like this idea of, like, the Lego Masters in, in modeling the behavior, like, quite literally just showing how people are doing something that you, you might not have recognized that, like, people are doing.

Zak Stambor: And once you see people doing a behavior, becomes far more acceptable for you to then say, "Hey, maybe I'll go buy some Legos and start building," 'cause that does seem kinda fun and creative and engaging.

Suzy Davidkhanian: That's a great place to end. Thanks so much, Zak.

Zak Stambor: Yeah, thanks for having me.

Suzy Davidkhanian: Thanks, Carina.

Carina Lamb: Thanks, Suzy.

Suzy Davidkhanian: And thanks to our listeners and to our team that edits the podcast. Please leave a rating or review, and remember to subscribe. I'll see you for more Reimagining Retail next Wednesday. And on Friday, join Marcus for another episode of Behind the Numbers, an  [00:23:00] EMARKETER podcast made possible by Verve.