Will Santa be bringing as many toys this holiday?

Discussion
Photos: Walmart
Sep 08, 2020
Tom Ryan

Walmart this year introduced an online focus group of kids to rate toys, rolled out an interactive tool that lets kids and parents try out toys virtually and came up with a “hottest toys” list influenced by pandemic-related behavior shifts.

“Toys play a critical role in families’ lives as they spend more time at home and parents seek ways to keep kids engaged with learning-based play,” said Steve Ronchetto, Walmart’s VP of toys, in a statement.

Walmart’s “hottest toys” list includes some suited to kids spending “more time at home” as well as those promising “limitless outdoor play” and to keep kids “busy and engaged for hours without a screen.”

Building on efforts in recent years, the retailer launched an online tool, Walmart Wonder Lab, to enable kids to “unbox, test and play with this holiday season’s hottest toys without leaving home.”

The industry’s big three toy sellers are Walmart, Target and Amazon.com, the latter recently agreeing to provide fulfillment for toysrus.com.

Toys have seen strong momentum with kids confined to their homes amid lockdown measures. The NPD Group reported toy sales in the U.S. climbed 16 percent in the first half, led by online purchases. The strongest global gains were in games and puzzles, up 37 percent; outdoor & sports toys, 27 percent; building sets, 14 percent; and arts & crafts, 11 percent. The top toy property was Disney Frozen, followed by Star Wars, Little Tikes, Barbie and Lego Star Wars.

Conservative inventory planning, however, may inhibit gains. Mattel and Hasbro reported strong POS growth in the second quarter, but cautious steps by stores to replenish stocks and subsequent shortages restrained wholesale gains.

Innovation may spark holiday selling. Fisher Price recently introduced a “My Home Office” playset featuring a pretend laptop, headset and a to-go coffee cup to align with the work-from-home trend.

Retail sales may also benefit from parents wanting to make their kids happy amid 2020’s disruption. Speaking to CNBC, Brad Bedwell, Walmart’s merchandising director of preschool toys and omni merchandising, said, “This is really a category that can spark some joy for our customers and kind of deliver on what makes staying at home fun.”

DISCUSSION QUESTIONS: Are you more optimistic or pessimistic that the toy category will see gains this holiday selling season? What factors appear to be working for and against the category? What adjustments may be necessary?

Please practice The RetailWire Golden Rule when submitting your comments.
Braintrust
"Every friend, every retailer I know, and the people I have met who work in retail are optimistic about the holidays."
"Headwinds would include product availability and high unemployment/economic stress for many families."
"This is going to be a great year for the toy business. Everyone is looking for something to do to make them feel good about the last 6 months."

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19 Comments on "Will Santa be bringing as many toys this holiday?"


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Neil Saunders
BrainTrust

In volume terms, I think toys will perform reasonably well this year. With kids staying home more, buying them things to keep them entertained will remain important. However in value terms, the gains may be less impressive. As ever, I suspect there will be very fierce competition in toys over the holidays and this, as it always does, will result in a lot of price-matching and price-lowering. But overall, this won’t be a terrible year for toys!

Ben Ball
BrainTrust

What’s left that parents haven’t already bought in the struggle to entertain isolated kids? Manufacturers will need to have plenty of innovation ready to go this year if toy retailers are going to capture all the holiday dollars they could.

Richard Hernandez
BrainTrust

The unknown is a big deal going into the holiday season. I don’t think it will completely hamper toy sales, but I think parents will be more judicious in how they spend their money and what they spend their money on. I also see retailers starting to hawk toys any day now.

Cathy Hotka
BrainTrust

If I were Walmart I’d make a very big deal about the kids online focus group. Kids love knowing what other kids like and will trust that recommendation. Imagine the competition: will the car toy win, or will the video game?

Gary Sankary
BrainTrust

I’m curious how changes in the way families are consuming media these days will affect holiday toy buying. As more and more families stream content from providers like Disney and Amazon Prime, kids (and parents) will see fewer ads for the “hot” toys, which I suspect will impact demand. If kids are more isolated, will they be exposed to their friends’ input on what toys are must-haves? How will that affect trend and demand? I will be very interested to see how the 2020 holiday season unfolds.

Lee Kent
BrainTrust

I don’t have children or grandchildren so what do I know about toys? Not much except that kids are always in the know about whatever the latest thing is, whether there is a pandemic going or not. They have always and likely will always, love to play and toys will fit the bill. Do I think toys will see gains this holiday season? I think toys will continue to do as they usually do. And the pricier the go-to for this year’s toy is, the more gains the space will see. For my 2 cents.

Georganne Bender
BrainTrust

Every friend, every retailer I know, and the people I have met who work in retail are optimistic about the holidays. 2020 has been such a dismal year in so many ways we need something to look forward to, no matter how we celebrate it.

We are all at home so much we need things to keep ourselves and our kids occupied. Sales may not be crazy this year but I think they will be good. And I am crossing my fingers that the toys advertised on TV and online will be readily available. Store aisles are still empty where I live, but I am hopeful that by the time holiday 2020 rolls around shelves will be stocked with the toys kids want.

Gene Detroyer
BrainTrust
I gotta scratch my head on this one. What is a toy? Are electronic learning systems for kids toys? Not in my mind. What about electronic games, even? Are books toys? They aren’t either as far as I am concerned, electronic or not. Call me a Scrooge. The traditional toy market has been flat or declined for over a decade. To me that is a positive. The traditional toys of past holiday seasons have a half life of less than a week. Sometimes less than that Christmas Day. I would love to see more focus on more valuable products. Not more valuable to the retailer or manufacturer, but more valuable to the kids. And let’s not forget experiences — even for kids. The experiences are something they will always remember as the toys are put in the recycle bin. Of course this season, experiences will be limited. But museums are open, restaurants are serving, and transportation is available. Net-net, I see no growth in the toy market, even with the COVID-19 environment. And we haven’t… Read more »
Raj B. Shroff
BrainTrust

I am optimistic about toy sales as parents try to overcompensate for what many kids, and families in general, have been putting up with this year. Factors working for the category include pent up stress from 2020 and a desire to create some normality. Headwinds would include product availability and high unemployment/economic stress for many families. Adjustments could be to ensure availability, bringing top picks to the front of stores so when consumers are in store doing BOPIS they see items, and heightening top picks and tying them in with YouTube stars to pitch items. There should be heavy digital efforts, too.

As for the Walmart Wonder Lab, I’m curious what ages it targets. Parents would have to force their kids to be on that for more than five seconds; it seems like a waste of money on Walmart’s part — something executives loved but would be a real bore for kids. Mine would be out of there in seconds, over on YouTube watching videos and wanting things from ads or influencers.

Jeff Sward
BrainTrust

I’m guessing more, or at least a larger share of, market relative to other choices. And hopefully there will be toys that challenge thinking and creativity — multi end-use toys like LEGOs. I love to think in terms of kits: Assembly required. Imagination required. Here are the pieces. How many shapes, sizes, configurations are possible?

Bindu Gupta
BrainTrust

Toys were always a hot selling item during the holidays and will remain so even more amid this pandemic. I anticipate more demand for indoor toys with the change in season as well. As a parent, I definitely want non-screen educational options which will keep my kids entertained for at least an hour at a stretch. The focus should be on promoting such toys with an emphasis on learning.

Scott Norris
Guest

My company produces mainly educational games, puzzles, and flash cards for classroom environments and we’ve seen those kinds of products skyrocket this summer, purchased by families wanting to supplement learning at home. We’ve got next-to-no budget for consumer marketing, but I’ve been refining and expanding descriptions nonstop and adding photos and other content to make them sticky to search engines – I’m hoping we continue to see this kind of demand all the way until the holidays!

Steve Montgomery
BrainTrust

I don’t foresee overall industry gains. The market will be bifurcated into two groups of consumers. Customers for whom the pandemic’s impact on their employment was simply a change from working in an office to work from home will buy more toys and the market will see gains from them. The parents will be seeking to help their children cope with the changes this has made in their lives.

For those parents for whom the pandemic meant a reduction in their income or losing their jobs, they will do what they can to make Christmas feel like Christmas, but will have to limit their toy buying to conserve funds for other needs.

natalie.walkley@deckcommerce.com
Guest

From what we are seeing from customers and trends overall, I think the toy category will see gains. Why?

  1. Overall, this has been a tough year and people will look for some excitement to finish off the year;
  2. Many children missed birthday parties, social activities, in-person school, sports, etc. so “Santa” might make up for losses and disappointments;
  3. Many parents spent some time during quarantine “purging” closets and toy boxes — making room for new items.

In order to have a smooth peak season during the holidays, toy retailers should button up their omnichannel technologies to ensure a seamless customer experience. (It’s worth noting that omnichannel shoppers tend to spend more both in transaction size and lifetime value, so it is a worthwhile effort!)

Rich Kizer
BrainTrust

Lucky day. I took my computer with me to Starbucks this morning and read this article. I immediately noticed six ladies having coffee together. I stopped and asked them if they thought toy sales will be strong for the holidays. My guess, everyone was between 28 and 38 years old. The answer was an overwhelming YES. As one said, with the agreement of all the others: “Our children have been living in a strange world that has scared them and kept them from the fun they should have as children. You bet this holiday season will be a time to find happiness and fun for them. And that means we will be buying more than normal to assure that!”

Craig Sundstrom
Guest

Wait, toy sales were up 16%, i.e. 3-5 times as much as the economy overall? That seems hard to believe.

Anyway, the economy is still a question mark, and toys can’t escape that. Toys aren’t at the bottom of most priority lists, but they are behind food and shelter … still problematic in some households. There’s also the question of holiday promotions — many already cancelled — and while those aren’t 100% necessary for sales, it’s hard to believe they don’t help … why else would we have them?

jbarnes
Guest
We are fortunate to have a leading toy retailer in Canada as a client. They leverage our OMS and drop ship platform to enable their omnichannel fulfillment. Hence we have a lot of data on what is selling and what is not right now. We are optimistic about toys and the demand data illustrates that specific categories are up (60% to 100%). The biggest challenge is not demand but supply: 1) manufacturing capacity in low cost countries (LCL) is being impacted by COVID, 2) there are container shortages from ASIA and 3) parcel carriers in North America are clamping down on their capacity to deliver D2C. What we are seeing is a massive shift to curbside pickup and pick up in store. Retailers are nudging customers through the use of promotions, same-day pick-up (speed) and scarcity strategies to pick up merchandise in stores vs home delivery. It’s working, it is cost effective, it is faster, and if executed well is a win-win for the customer. The challenge with BOPIS and curbside is “uncontrollable” order cancellations.… Read more »
Mel Kleiman
BrainTrust

This is going to be a great year for the toy business. Everyone is looking for something to do to make them feel good about the last 6 months. Toys and games make us all feel good.

Kai Clarke
BrainTrust

No. As a country we will have a lower “consumer spending,” because more people will be unemployed, there will be fewer companies hiring as fewer companies return to work and open their doors, with fewer employees. Less jobs, less consumer spending, means fewer sales. Add to this the continuing impact of the COVID Pandemic and its human toll as we keep violating the rules of medical common sense, and the return to a high performing economy is at least a year or two away, after we get a well-tested vaccine which won’t occur until mid-2021 or later. We haven’t even tested a vaccine for a full portion of the phase 3 clinical trials, let alone determined how long COVID antibodies last. We don’t know if a vaccine lasts 6 months or a year, since we haven’t even had this pandemic for that long!

wpDiscuz
Braintrust
"Every friend, every retailer I know, and the people I have met who work in retail are optimistic about the holidays."
"Headwinds would include product availability and high unemployment/economic stress for many families."
"This is going to be a great year for the toy business. Everyone is looking for something to do to make them feel good about the last 6 months."

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