The Economic Upside of Diversity and Inclusion in the Toy Industry

by Cheryl Ann Wong

The toy industry has long been a source of joy and imagination for children worldwide. As society evolves, however, so too must the products we create for our youngest consumers. Embracing diversity and inclusion (D&I) in the toy industry is not just a matter of social responsibility; it's also a smart business move.

Delving into the positive merits of creating toy products from a diversity and inclusion agenda, shedding light on the economic benefits and long-term sustainability of this approach, requires first and foremost — an open mind.

Reflecting the Real World

Toys are not just playthings; they are often a reflection of the world around us. When toy manufacturers embrace diversity and inclusion, they create products that better mirror the diverse society in which we live. This approach allows children to see themselves represented in their toys, fostering a sense of belonging and self-worth. Moreover, it provides opportunities for children to learn about and appreciate different cultures, abilities, and perspectives from a young age.

 When thought of as an agenda — or a checkbox issue — the power of the underlying affects are typically missed from the overall assessment of producing D&I toy products. The goal is to not simply placate the population and score some public relations points. If that’s the underlying drive to pursue D&I products, it’s best to not pursue such development. The public will see through this approach — and companies can get “called-out” for patronizing truly worthy societal factors.

 Simply, from an economic standpoint, reflecting the real world through diverse toy offerings can lead to increased sales, without question. But does the potential added cost offset the additional revenue stream to justify such development and investment?

 Clearly, when children see toys that resemble their own backgrounds and experiences, they are more likely to connect with and desire those products. This translates to higher demand and stronger sales figures for toy manufacturers. By appealing to a broader customer base, companies can diversify their revenue streams and reduce their reliance on a single demographic. If the cost to do so is equal to the investment, it should still be championed because of the long-term positive social impact such a strategy makes on the world at-large. But what if the investment costs more than the immediate return? What then?

Tapping into Niche Markets

The toy industry has traditionally focused on catering to a mainstream audience. By embracing diversity and inclusion, however, companies can tap into niche markets that have been underserved for far too long. For example, toys that cater to children with disabilities or neurodiverse traits represent a largely untapped market. There are over 1.5 billion people worldwide with disabilities. That should be a seriously attractive “niche” market, no matter how one assesses the benefits and fallbacks on development costs. Creating inclusive toys that address the unique needs and interests of these children (and adults) not only fulfills a societal need but also presents a lucrative business opportunity.

 Moreover, the global market for toys extends beyond Western countries. By creating toys that celebrate diverse cultures and traditions, companies can access international markets more effectively. This approach allows for the expansion of a company's customer base, resulting in increased sales and revenue.

Building Brand Loyalty

Incorporating diversity and inclusion into toy design and marketing can help build brand loyalty from an early age. Children are impressionable and form strong emotional connections with the products they interact with daily. When they see brands promoting inclusivity and celebrating diversity, they are more likely to develop a sense of loyalty that can last a lifetime.

 This brand loyalty extends beyond childhood. As children grow into adults, their fond memories and positive associations with inclusive toy brands can influence their purchasing decisions when they become parents themselves. By investing in D&I initiatives today, toy companies can secure future generations of customers.

 So the answer to the question of immediate returns is to stay the course. The benefits far outweigh the initial investment in pursuing D&I toys. Smart executives will engage as their company warrants and can absorb the investment if pursued in a strategic manner.

But again, the corporate heart in the equation must be there. The visceral response to D&I must be taken into account: Does it feel like the right thing to do? Not to score points or profits, but to extend a positive image for not just the company, but the people it touches — and society as a whole. Any initiative that launches without this attitude baked-in is doomed to fail. Don’t do it for the checkbox, the PR, or the glory. Do it because it’s the right thing to do. If one doesn’t feel it, then don’t pursue it. Stick with what you know to be true and what feels apropos for your company.

Promoting Innovation

One factor that may get one to “feel it” is that diversity and inclusion fosters innovation by bringing together individuals with different perspectives and experiences. In the toy industry, this innovation can lead to the creation of groundbreaking products that capture the imaginations of children and parents alike. When diverse teams collaborate to design toys, they draw from a wider range of cultural insights and ideas, resulting in more creative and appealing products.

Innovation also translates to product differentiation. In a highly competitive market, unique and innovative toys stand out. When toy manufacturers prioritize diversity and inclusion, they are more likely to develop products that set them apart from the competition, leading to increased market share and profitability.

The economic merits of creating toy products from a diversity and inclusion agenda are undeniable — if one feels it. By reflecting the real world, tapping into niche markets, building brand loyalty, and promoting innovation, toy companies can thrive in an ever-evolving industry. Beyond financial gains, embracing D&I in the toy industry has the power to shape a more inclusive and empathetic society, fostering a brighter future for children and adults alike.

As consumers increasingly demand diverse and inclusive products, companies that fail to adapt may find themselves left behind in a rapidly changing marketplace. The time, therefore, is now for the toy industry to fully embrace diversity and inclusion, not just as a social responsibility but as a smart economic strategy. And those companies that do not may very well “feel it” eventually in the marketplace as society progresses. That’s yet another way to change hearts and minds — which should all be opened to the compassion to do the right thing, even when such a decision may take time to pay off in dividends.