April Berthene
Source: www.digitalcommerce360.com, September 2019
The holiday season is crucial for online toy sales.
For example, more than half of Amazon’s toy sales are generated in the fourth quarter, according to ecommerce analytics platform Profitero Ltd.
Amazon’s toys and games category sold 3.4 times more toys on Cyber Monday (the Monday following Thanksgiving) than on an average day in 2018, and 2.3 times more toys than average on Black Friday, according to Profitero. Amazon announced in 2018 it sold more than 18 million toys worldwide on these two days combined. Profitero also noted a spike in toy sales larger than the one on Black Friday on the Sunday before Dec. 25, a Tuesday, in 2018. Profitero’s data is based on technology that monitors product content, search ranking, ratings, reviews, inventory, pricing and promotion changes across more than 8,000 retailer sites and apps in 50-plus countries.
The 2019 holiday season, however, looks a lot different than last year. With Toys R Us relaunching its ecommerce site for the holidays, unknown tariffs and Amazon’s continued stronghold in the toy subcategory, online toy merchants face a tough holiday season.
“It’s a more uncertain fourth quarter than I’ve seen in a long time,” says Keith Anderson, senior vice president of strategy and insights at Profitero.
The balancing act between the three key stakeholders—the manufacturer, the retailer and the consumer—and who will absorb tariffs is unclear, Anderson says.
“The tariffs seem to be changing a little bit week to week, and that uncertainty makes it harder for the economists and financial analysts to model costs and quantity and some pretty important things,” he says. “And that means it’s harder to plan promotions and price discounts. How much [of the tariff cost] the manufacturer is going to try to get the retailer to accept is a big question and how much the retailer is going to pass on to the consumer to absorb is a big question.”
Toys R Us attempts its 2019 comeback
Adding to this uncertainty is what role Toys R Us will play in holiday sales online. The toy retail giant filed for bankruptcy in 2018 after years of declining store sales, although Internet Retailer reported it had grown its online sales by double digit percentages in the three years prior to its bankruptcy. Toys R Us was reborn in early 2019 with a new parent company, Tru Kids Inc., which is the parent brand of more than 20 consumer toy and baby brands.
To read the rest of this article, which details the current state of the online toy category, along with Internet Retailer data estimates, and Profitero survey data, please sign up for a free membership below or sign in.
