Things Toy Stores Won't Say
by AnnaMaria Andriotis
Wednesday, January 5, 2011
In total, consumers spend around $13.2 billion on toy purchases during the holiday shopping season, according to the NPD Group. Most of this spending occurs on weekends when consumers are in a frenzy, waiting on long lines at the register to buy the toys on their kids' wish lists before they're sold out. Why not shop on a weekday when there's less competition and more elbow room? Because you might not find what you want: there's often less of a selection on weekdays, especially for toys in high demand, says Jim Silver, an independent toy industry analyst and editor in chief of TimetoPlayMag.com, which researches toys. During the holidays, stores keep hot toys in their back room and bring them out for sale on the weekends, beginning on Friday evening, because toy stores expect weekend shoppers to spend more money than the time-pressed and more efficient lunch-hour or after-work shopper, he says.
"Retailers are trying to manage inventory and the flow of consumers in their stores," says Reyne Rice, toy trend expert for the Toy Industry Association, a trade group. Small businesses are the least likely to time shelf stocking. "None of our retailers have time for some crazy strategy," says Kathleen McHugh, president of the American Specialty Toy Retailing Association, which represents 550 small business toy stores. And a Toys "R" Us spokeswoman says they don't hold back stock and parents have a good chance of finding what they want any day of the week.
2. "School yards are the new advertising mecca."
For the past year, Lisa Reynolds' 6-year-old son was asking for his own collection of Bakugans, Japanese Transformer-like action figures. Reynolds was baffled -- her son had not seen television or print ads for the toys -- until he told her his classmates brought the figures to school. Seven months later, Reynolds, a Northville, Mich.-based 42-year-old mother of two who runs coupon-tracking site RedPlum.com, gave in, buying a set of six Bakugans.
It used to be that children's wish lists were largely determined by multi-million dollar ad campaigns. But recently the power of the school yard has gained steam. "School is the ultimate social network for toys," says Richard Gottlieb, CEO of U.S.A. Toy Experts, a toy industry consultant. Silly Bandz, for example, launched online in 2008 and landed in its first brick-and-mortar (in Birmingham, Ala.) in 2009. As kids noticed their friends wearing them, the animal-shaped wristbands were fast in demand, landing in more than 8,000 stores across the country within a matter of months. The rubbery bangles generated more than $100 million in annual sales in 2009, company founder Robert Cloak told the Wall Street Journal last summer. Most of these schoolyard fad toys are also part of a larger set, which helps boost sales for stores; once children get one of them, they want the rest so they can outshine their schoolyard mates, says Gottlieb.
3. "We purposely make your children pester you into purchasing our toys."
Ashlea Konecny knows a thing or two about toy store tantrums. Konecny, a 27-year-old mother of two and accountant, recently walked into a Toys "R" Us where a Diego DVD was placed at the entrance. Her four-year-old son immediately grabbed it and started crying -- eventually screaming -- when Konecny said she wasn't going to buy it. Stressful? Yes. But not unexpected by retailers. Toy stores anticipate and capitalizeon this sort of kid behavior. A Toys "R" Us spokeswoman says the stores have "feature shops" at their entrance, and the focus varies throughout the year. "What's hot or appealing to a nine-year-old girl likely won't be the same product that catches the eye of a 4-year-old boy," she says.
Stores depend on several key areas to boost sales. It starts at the entrance, where a display of toys is often tied to a big movie release (e.g. Harry Potter, Toy Story or Transformers) or TV series (like Dora the Explorer). The goal is to get children excited so they'll nag their parent to buy the toy throughout their time in the store, increasing the chances of a purchase, says Gottlieb. (Rice contends that the aim is more innocent: the display cases, she says, are meant to help consumers find what they're looking for quicker.) Then there are the end caps -- the displays that face the main traffic aisles. Toy manufacturers will often pay retailers -- several hundred dollars per end cap at a large retail chain, says Gottlieb -- to get their product into that high-traffic space because more eyeballs usually means increased sales.
4. "You won't decide next year's hot holiday toys -- we will. And we'll do it by summer."
Couldn't quite understand how Disney Dance Star Mickey became a must-have this year for the under-two set, especially since most are still too young to understand the concept of a "hot" toy? That's not by chance -- and consumers can expect the same next holiday season. More than 7,000 toys are introduced each year, and up to 60% of toy purchases occur during the last three months of the year, according to the TIA. During the holidays, shoppers rely, in part, on "hot toys" lists to decide what to buy Junior. Most lists are released to the public by early October, but they are assembled about three months earlier. To make the list, retailers typically poll manufacturers about what toys they'll be releasing, get details on new-movie release dates -- and the toys that will accompany them -- and gather information on new toys tied to hit TV shows, like, for example, Dora the Explorer, says Rice.
With the exception of obvious hits like Toy Story and Nerf products, some toys become popular only because they're placed on these lists, says Silver. With these lists, retailers create a sort of hysteria around the product that boosts its sales by 10 to 100 times per week during the holidays, he says. The list is a "self-fulfilling prophecy," he says. Toy industry reps argue that the lists help consumers who would otherwise be overwhelmed by the plethora of toys, particularly grandparents and other relatives who might not know exactly what to buy a child and use the list as a guide.
5. "And we make sure there aren't enough to buy."
Last year, Kevin Makler, a 43-year-old industrial engineer in Raleigh, N.C., didn't realize the Monopoly Star Wars edition board game his now 10-year-old twins Jessica and Jonathan requested last year was among the most in-demand toys, so he waited until early December to buy the game. That's when he discovered it had sold out in store and online. "It was tough to explain that to my kids," he says. Toy analysts say hot holiday toys for 2010, like Lego Harry Potter, Monster High Dolls and Squinkies, were sold out in some locations by November.
That's not entirely accidental. If a toy is in demand, big retailers will usually try to order enough units, says Rice. But it doesn't always work out if there's a manufacturing delay or not enough of a product to go around (remember those long 4 a.m. lines just to have a chance to buy limited supplies of the Nintendo Wii a few years back?) Toys have a higher chance of selling out when they're on several hot lists, and because once empty-handed Makler, don't want a repeat of disappointed kids, by mid-December, parents have just a 10% chance of finding them, says Silver.