Editor’s note: Juli Lennett is senior vice president, industry advisor for market research firm NPD Group’s U.S. toy division. This is an edited version of a post that originally appeared under the title, “The holiday landscape without Toys “R” Us."
A lot has happened since the big announcement that Toys “R” Us would be liquidating its stores in the U.S. Based on some of the news reports in mid-March, when this was first announced, you might have predicted that the sky would have fallen by now and the toy industry would be a shell of itself.
That didn’t happen. But why not?
As I wrote in my blog back in March, NPD found that when parents bought a toy last year at Toys ‟R” Us, over 70 percent of them were purchased for a specific occasion like a birthday or Christmas. In addition, 70 percent of toys purchased at Toys “R” Us were purchased because kids asked for the specific toy or brand. Even without Toys ‟R” Us, Christmas and birthdays aren’t going away and kids will continue to ask their parents and grandparents for their favorite toy and get it.
As we move into the most important time of the year when nearly 50 percent of all U.S. toy sales occur, the question is, what impact will the liquidation have on the U.S. toy industry’s holiday season? After all, parents bought a lot of toys during the 16 weeks of the liquidation and are hoarding them to give away at Christmas, right?
Well, yes, but to a small degree.
In a recent study that NPD conducted in the U.S., 83 percent of consumers who bought a toy during the liquidation at Toys “R” Us reported that they already had or would give the toy away by the end of September. That leaves only 17 percent who reported that they would be giving the toy away some time in Q4. And, interestingly, the No. 1 occasion that the liquidation toys were purchased for was for a birthday. Christmas came in third place, behind “no special occasion...