Halloween may be upon us, but all the ghosts and goblins are no match for a more fundamental seasonal shift at play. Behind the Halloween solutions and displays, key retailers are elevating their positioning for the holidays. While Costco is no stranger to displaying Christmas trees and ribbons as early as August, Walmart, Target, Home Depot, Amazon, Kohl’s, and many others are already diving headfirst into the holidays. While much of this holiday presence aligns to home décor at the moment, it is already quite extensive and cross-category (Figure 1).
Figure 1. Key Retailers Leaning Into Holiday as of Oct. 2
Source: Kantar, toysrus.com, Disney
Though they might appear subtler, the shifts impacting toy are even more notably strategic. Sales data from 2018 suggests that a large portion of toy market share disappeared the first season without Toys R Us in the picture. Some of this share went to video games and esports, and retailers like Amazon became more creative in their approach to toy (e.g., Amazon’s physical “A Holiday of Play” catalog). However, toy as a category — and as a retail shopping experience — still had many gaps last year.
This year, a different toy story is taking shape. The innovation in toy already emerging at retail is positioning key retailers particularly well to compete for holiday dollars and to become primary destinations — online and off — for holiday shopping.
- The retailer making the most noise at the moment is Target. The retailer has launched mini Disney stores in select stores and relaunched Toysrus.com through which it will fulfill purchases. These steps, along with its ongoing partnerships with social influencers, brands, and entertainment platforms, should help Target elevate its appeal to the shopper segments driving the most holiday shopping and spending growth: Gen Y parents (and grandparents) who are spending more online for the holidays.
- Amazon is taking a greater lead on toy offline than online right now. While Amazon’s approach to toy online is not much more than surface level (e.g., its Toy Shop), it is ramping up this category quite strongly in its physical banners like Amazon Books and Amazon 4-Star. Indicative of an earlier play on toy beyond its website, Amazon Books, for example, is already showcasing its top toys for the season as well as holiday gift guide displays. Toys displayed as “customer favorites” are also featuring prominently at checkout, perhaps to spur impulse buys.
- Barnes and Noble is leaning into toy year-round, and those efforts are worth attention, especially as we head into the holidays. This retailer’s ability to integrate a toy experience that leverages cross-category and age- and activity-relevant products is notable compared with its more scaled counterparts. This year, it is showing even more sophistication with toy and entertainment solutions tailored to select subsets of shoppers, from the Harry Potter fanatic to the Japanese toy and manga enthusiast – all while continuing to take a stronger stand on toy as whole.
My take: Despite their efforts last year, retailers did not fully take advantage of the toy void left by the demise of Toys R Us. The efforts we have seen so far this season, particularly by Target, show a willingness to put some new and early skin in the game — a game whose objectives have changed. Toy as a category is undergoing an existential shift that other retail categories should attune to. It is less about the functionality of toy as a product, and more about the entertainment experience or activity as an outcome. This shift makes the toy category particularly ripe for either disruption or innovation from technology, gaming, and esports platforms. It also makes toy an incredibly powerful vehicle for retail experiences and connecting to shoppers.
Whether you play in toy or not, consider how you are linking to these experiences this season, and stay tuned to Kantar Retail IQ for our series of seasonal analyses, including our upcoming Halloween recap and Toy Tracker. In the meantime, sense check your holiday performance expectations with our holiday forecast, and reach out if you would like to better apply holiday retail growth opportunities to your portfolio.
For more information, please contact:
Sara Al-Tukhaim, Executive Vice President