Nov 19, 2018

’Tis the Season for a New Toy Story as Retailers Compete to Fill the Toys "R" Us Void

Toys "R" Us stores in the U.S. closed their doors in June, much to the dismay of not only children, but their parents and grandparents who had shopped at Toys "R" Us for decades. However, just this month, the company that owns the toy giant’s corporate brand names and intellectual properties announced that it will offer about 35 Toys "R" Us private label brands this holiday season.

Geoffrey’s Toy Box, a collection of brands based on the Toys "R" Us longtime mascot, will be available at nearly 600 Kroger-owned stores. Because the new brand is a bit late to the 2018 holiday shopping party, the full scope and impact of the Toys "R" Us comeback probably won’t be known until 2019.

In the meantime, brands and retailers have already launched their strategies for filling the multibillion-dollar void created by the initial bankruptcy and closings of Toys "R" Us stores. More importantly, shoppers have been forced to look for alternatives for holiday toy shopping.

Let’s take a look at where consumers plan to shop for toys, how online vs. offline shopping affects toy sales, the impact of circulars and catalogs, and what brick-and-mortar retailers are doing to claim as big a piece of the toy-shopping pie as possible.

Amazon, Target and Walmart Are the Top Destinations for Toys

Our Numerator OmniPanel Holiday Shopping Survey asked shoppers where they plan to shop for toys this year and, not surprisingly, three big names topped the list of responses. Amazon was named by more than three-quarters of respondents. Target and Walmart were in a virtual dead heat in second place, with Target having a slim lead for brick-and-mortar and Walmart having a similar edge for online channels.

  • Amazon (76%)
  • Target (63%)
  • Walmart (61%)
  • (38%)
  • (36%)

InfoScout OmniPanel data show that heavy online toy shoppers spend more than 2.7 times more on toys than heavy offline toy shoppers who don’t shop online for toys ($476.07 vs. $174.07). More than 60% of heavy online shoppers’ toy spend goes to online channels.


Amazon Goes Old School with Printed Toy Catalogs

One way Amazon is attempting to fill the Toys "R" Us gap is by publishing a traditional toy catalog. The 68-page guide, complete with QR codes for featured toys, is being shipped to millions of American households.

It shouldn’t be a shock to see Amazon take a page out of the brick-and-mortar playbook. After all, families eagerly anticipated receiving the Toys "R" Us holiday catalog every October, and the Sears catalog was a staple of the holiday shopping season for years. Also, Amazon saw a boost in market share when it published an online toy catalog for the first time in 2007. A pdf version of this year’s catalog will be available as well.

Of course, Target and Walmart will continue to offer their own printed toy catalogs for the holiday shopping season as they look to keep shopping in-store and claim as much Toys "R" Us market share as possible.

Circulars Matter for Toy Shoppers

Despite all the talk about researching prices on smartphones, circulars are still very much sought after by holiday shoppers. According to our InfoScout OmniPanel Holiday Survey, 81% of toy shoppers actively look at store circulars for the best deals on holiday gifts.

In fact, the number of toy circulars from late October to the middle of December jumped more than 40% from 2016 to 2017 according to Numerator Promotions. Circulars promoted deep discounts that averaged 29%. We expect to see even more toy circulars in 2018 given the absence of Toys "R" Us.

Numerator Promotions data also tell us that the number of print promotions for toys has already increased from the period of July to September of 2018 compared to last year, with CVS, Lidl and Rite-Aid ramping up the most.


How Target and Walmart Are Gearing Up for the Toy Push in 2018

Target is repeating last year’s cadence and theme in its “Bullseye’s Top Toys” flyer drop. Target is promoting $10 off purchases of $50 or more and $25 off purchases of $100 or more, replacing 2017’s “save up to 25%” offer. These deals include 20% off Minecraft and Star Wars toys, which have been promoted since mid-September. Target is also devoting an additional 250-thousand square feet of space to toys in stores.

Never shy about making bold claims, Walmart has dubbed itself America’s Best Toy Shop in a two-page flyer dropped on October 12, 2018. In addition to launching a toy book this quarter, Walmart is working hard to improve the in-store experience. Walmart added detailed digital store maps to its mobile app to help shoppers find what they need. Store associates will also be outfitted with mobile scanners so customers who buy large, bulky items can check out on the spot and skip the register.

Key Takeaways

The battle for toys is in full force. Although more and more holiday toy shopping is moving online and Amazon is the early leader, shoppers are turning to print catalogs to figure out which toys to buy, and they’re turning to store circulars to find the best deals.

With Toys "R" Us out of the picture, if only temporarily, billions of dollars in toy spending are up for grabs, and the market is changing dramatically. The problem is, legacy panels aren’t capturing the shift to emerging, non-traditional channels.

If you’re relying on legacy panel data, you’re operating in the blind spot, and you risk making decisions based on incomplete, inaccurate data. Numerator combines path data with purchase data to provide a complete, real-time view of the omnichannel market, including online, offline, traditional and non-traditional channels.