For many retailers, Toys are arguably the most crucial category of the holiday season. Recently, 360pi released Unwrapping Holiday Toy Strategies, the first report its illustrious Holiday Insights Series. Here are just a few key insights from the report and some tips on how you can keep up with some of the largest Toy competitors including Walmart, Target, Toys “R” Us, and of course, Amazon.
1. Strategize on your product assortment this holiday
Retailers are employing a number of tactics, with assortment at the crux of this year’s strategy. With distinctive product variants and packaging, and adapted product exclusives and private labels, retailers are padding their shelves more strategically than ever before — creating opportunities to play competitively without sacrificing margin. In 360pi’s recent report, when comparing official press releases of four of the most dominant retailers offering top holiday Toys this season, there was virtually no product overlap between retailers. In fact, as of October 31, 2016, only 7% of Amazon’s Top 100 Best-Selling Toys were listed by other retailers as top trending Toys.
2. Make sure to track this year’s trending products
Who’s stocking what? What Toys? What brands? What colors and sizes? With a lot of weight on assortment this holiday, it’s more important than ever to ensure your assortment is meeting consumer demand. Looking at this year’s top Toy trends, 360pi found a few new contenders, including newly sprouted Hatchimals, produced by the ever-popular brand, Spin-Master. However, due to demand, Hatchimals have been out-of-stock at traditional retailers like Walmart. In fact, select marketplace sellers were capitalizing on the retailer’s out-of-stocks on the favored Hatchimals products, charging 4X the initial price of the product. However, it was also found that a number of this year’s retailer exclusive products are analogous versions or expanded offerings straight from last year’s top Toy lineup, like Pie In the Face Game, Zoomer Dino and Bunchems.
3. Consider marketplace advantages, but exercise caution
Marketplaces are at the root of what made Amazon one of the biggest game-changers to hit retail and the advantages of its marketplace is quite evident this holiday season.1 For example, Amazon illustrated the second highest percentage of unavailable products (18%) in the sampled selection of self-reported top Toys. When Amazon’s marketplaces were factored in, however, the number of unavailable products dropped to 0%. Conversely, Target, offering no marketplace environment, exhibited the highest percentage of unavailable products (32%) – that’s roughly one third!
However, marketplaces can present negative repercussions such as shaping brand reputation. For example, while Walmart did not meet the demand on Hatchimals products, the retailer’s marketplace sellers were found to capitalize on the out-of-stocks, charging 4X the initial price of the product.
4. Continue to closely monitor competitive prices
While there has been more of a focus on assortment this season, price still remains a crucial component in the shopper path to purchase. In 360pi’s analysis, Amazon and Walmart were found to be in close competition by mirroring each other’s price changes. Despite Amazon changing prices on 10% more of the sampled product set than Walmart in the month of October, on average, Walmart moved in lockstep with Amazon’s price change movements, indicating that the retailers are likely closely monitoring each other.
This holiday, retailers should look to valuable retail analytics tools to fuel their strategies, sales and margins. Partnering with a provider to track trending products, competitive prices, and availability to garner new opportunities is key to a successful holiday.
To download the full Toys report and to receive more critical insights this holiday season, sign up for 360pi’s fourth annual award-winning Holiday Insights Series. Subscribers receive weekly reports on holiday product and pricing trends across several major retailers, including Amazon, Walmart, and Target.