See 2026 UK and European toy market data: AI shopping trends, kidult growth, and full-funnel Amazon strategy for the holiday season.
If you sell toys on Amazon, the last two years have not been easy to read. Budgets tightened, the algorithm kept moving, and "just run Sponsored Products harder in November" stopped being a strategy. But the toy category is growing again, and the shopper behind that growth looks meaningfully different than it did even a year ago.
We recently hosted a session on exactly this with our partners at Etopia and Amazon Ads, bringing together toy brands from across the UK to dig into the category's biggest shifts. Here are the key trends and takeaways for any toy brand selling on Amazon this holiday season: where the UK and European toy market stands today, how the shopper is changing (especially with AI), and what a full-funnel Amazon strategy actually looks like heading into peak.
After a rough stretch, toys are back in growth. The UK toy market grew 6% in 2025, the first growth year since the Covid-driven surge in 2020, reaching a total value of £3.9bn. Europe remains the world's second-largest toy region behind North America, inside a €106bn global toy industry.
Most of that growth is happening online, and Amazon is where it's concentrated. Amazon is the UK's largest online toy retailer, ahead of both Argos and eBay, and continues to gain category share. Between 25% and 30% of all UK toy sales now happen online, making it the fastest-growing channel in the category, and Amazon leads it by a wide margin.
For a toy brand, that's the headline: if you're not treating Amazon as a primary growth channel rather than a secondary listing, you're increasingly out of step with where the category itself is moving.
Christmas budgets in the UK are tighter. Average spend per person on Christmas gifts fell to £514 in 2025, down from £596 the year before. But toy sales are still growing, which tells you something important: shoppers aren't cutting toys from the list, they're being more deliberate about where the money goes. That's a different problem to solve than "shoppers have less money," and it changes what wins: clearer product content, stronger reviews, and being visible earlier in the decision rather than just cheaper at the point of sale.
At the same time, who's buying has shifted. Kidults, adults aged 12 and up buying for nostalgia, collecting, or their own enjoyment, now account for 31% of all UK toy spend. On Amazon specifically, the buyer breaks into four distinct personas, each requiring a different approach:
Treating all four as one generic "toy shopper" is where a lot of Amazon strategies quietly underperform. A message built for a decisive parent doesn't land the same way with a gift-giver who needs guidance, or a kidult who's evaluating dozens of products before they buy.
This is the shift most toy brands are still catching up to. In Q1 2026, 67% of UK consumers used AI tools to research or plan a purchase, up sharply from the year before, and adoption is generational: 77% of Gen Z and 75% of Millennials have used AI while shopping, compared with 29% of Boomers.
On Amazon specifically, Rufus, Amazon's AI shopping assistant, has now been used by more than 250 million shoppers, with interactions up 210% year over year. Shoppers are more than 60% more likely to buy on a trip where they use Rufus, which means its shortlist genuinely shapes what sells, not just what gets seen.
That has a direct implication for product content. Traditional keyword SEO isn't going away, but it's no longer the whole game. Answer-engine optimization, structuring product data, titles, and content so an AI assistant can confidently match a product to a real question ("a toy for a 6-year-old who loves dinosaurs") is becoming just as important as ranking in search. If your product data isn't structured clearly enough for an AI system to parse and recommend with confidence, you're effectively invisible to a growing share of shoppers, regardless of how good the product actually is.
The single biggest mistake toy brands make on Amazon isn't underspending. It's running Sponsored Ads and DSP as two separate strategies, judged by the same metric, when they do fundamentally different commercial jobs. Sponsored Ads capture demand that already exists. DSP creates and shapes demand before a shopper starts searching. Judge DSP on the same ROAS you'd expect from Sponsored Products, and you'll defund the thing that's actually building your future search volume.
Amazon's own aggregated advertiser data backs this up. Upper-funnel DSP investment grew 72% in Q4 2025 alone, while the cost of that inventory actually fell 24%, making full-funnel increasingly accessible to brands who assumed DSP was reserved for bigger budgets. Shoppers are 25 times more likely to purchase when they see DSP and Sponsored Ads together rather than sponsored ads alone. Brands that add DSP to their mix see 21% more new-to-brand sales, exactly the buyers a growing brand needs. And advertisers using four or more Amazon ad solutions across the funnel see 13.2 times more growth in brand awareness than those running a single format.
The direction of travel across the industry is consistent: full-funnel outperforms format-by-format, and it's no longer just a big-budget play.
The practical takeaway: peak isn't a moment, it's a four-month arc.
Then once the season's over, understand what actually drove growth, so next September starts smarter and cheaper.
There are five common ways this breaks down, worth checking your own plan against: starting DSP in November instead of September, judging every campaign on ACoS alone, running DSP and Sponsored Ads as disconnected strategies, creating demand your budget can't afford to capture later in the funnel, and advertising products that aren't retail-ready (out of stock, weak content, lost Buy Box).
If you work with a retail media agency, holiday season is a good moment to talk through a few things together: are you reaching buyers beyond search, or only capturing demand that already exists? Is your product content built for AI discovery as well as keyword search? Do you know who's really buying, using AMC to separate new-to-brand shoppers from repeat buyers?
None of this requires a massive budget shift to start. It requires treating DSP and Sponsored Ads as one connected plan rather than two, and being honest about which metric measures each stage of the job.
Is Amazon DSP worth it for toy brands with a limited budget? Yes, and the data suggests it's specifically underused by smaller and mid-sized toy brands. Shoppers are 25 times more likely to purchase when they see DSP and Sponsored Ads together rather than sponsored ads alone. The key is running it as an always-on complement to Sponsored Ads, not a separate, peak-only campaign.
How is AI changing the way people shop for toys? AI tools are increasingly involved earlier in the decision, not just at the point of purchase. 67% of UK consumers used AI to research or plan a purchase in Q1 2026, and Amazon's Rufus assistant has over 250 million users. This means product content needs to answer real shopper questions clearly enough for an AI assistant to confidently recommend it, in addition to ranking well in traditional search.
What percentage of UK toy sales happen on Amazon? Amazon is the UK's largest online toy retailer. Between 25% and 30% of all UK toy sales now happen online, and Amazon leads that channel by a wide margin, ahead of Argos and eBay.
When should toy brands start their holiday Amazon advertising? September, not November. The brands seeing the strongest full-funnel results build demand through DSP starting in September, move into Sponsored Brands and category search in October, keep capturing intent through November with Sponsored Products and hero ASINs, then convert hard in December with urgency and delivery-deadline messaging. Starting DSP in November is one of the most common ways brands underperform during peak season.
What is AMC and why does it matter for toy brands? Amazon Marketing Cloud (AMC) lets brands see the full customer journey, not just last-click sales, including which channels and touchpoints actually contributed to a purchase, who's new to the brand, and where shoppers drop off along the way. It's the layer that lets brands judge DSP and Sponsored Ads on what they actually contribute to a sale, rather than on a single campaign-level number that a standard report wouldn't capture.
Who are kidults, and why do they matter for toy brands on Amazon? Kidults are adults aged 12 and up who buy toys for themselves, for nostalgia, or for collecting. They now account for 31% of all UK toy spend. On Amazon, they're a smaller share of buyers than parents but the highest-value and most loyal segment, making them a meaningful growth opportunity for brands that adjust their messaging and targeting to reach them specifically.
This recap draws on insights shared at a joint toy industry session hosted by Xnurta, Etopia, and Amazon Ads in London, alongside Circana's UK Toy Industry Report 2025 and Amazon's 2026 Toy Report. Sessions like this run periodically for toy brands selling on Amazon; get in touch with Etopia or Xnurta if you'd like to be in the room for the next one.
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