By Beth Pinsker, Editorial Director of dealnews
Poor Kota the dinosaur. The $400 ride-on toy that made all the hot lists in 2008 is the Gordon Gekko of the current recession, standing in for all the excess spending of years past. How things have changed in marketing, especially for toys: This year, it's hard to find a toy that's heavily promoted that costs more than $50.
If you browse through the massive Toys "R" Us Toy Book, Walmart's Christmas Shop, Amazon's Hot Toy List or Target's Hot Toy section, you will quickly spot that under $50 seems to be the magic price point this year. On Amazon's massive list of 444 items and on Toys "R" Us' and Target's smaller lists, the ratio is a whopping 75% under $50. On Walmart's list of 42 items in its Christmas Shop, only eight cost more than $50. The most expensive item on any of the lists was the $359.99 Razor Dune Buggy at Amazon. (All lists include multiples of some items, in different colors or styles).
"It's great for them to push for lower priced toys. Kids flip through those toy books and pick out lower-priced items, which makes parents able to get them," says Pam Goodfellow, a senior analyst at BIGresearch which studies consumer trends. "So everyone's happy."
Take the case of Matchbox's Stinky the Garbage Truck. This is one of the toys on the bubble — at the beginning of November, it's just over $50 from some retailers, but discounted by Walmart to $49.97 and $49.99 at Target. How low will it go as retailers enter into the holiday toy price war? You'll likely see it drop temporarily, but perhaps shoot back up if it goes out of stock quickly at a discount price. The key is to know where the bottom is, but there really is no trick to that.
"It really is a game of chicken as to what price point will hit," says Goodfellow, who points out that retailers have gotten much better in the past two years at controlling their inventory, so prices are less variable. "In 2008, there was so much extra inventory after Christmas that consumers have had upper hand the past couple of years. We just expected everything to go 75% off and it did."
And what will be the fate of this year's high-priced items, like ImagiNext BigFoot the Monster, which retails for over $80 ($84.99 at Walmart and Target, $86.99 at Amazon, and $89.99 at Toys 'R' Us)? This is one of those classic "cool" toys that sounds great, but also reminds you of that scene from Big where Josh Baskin starts imaging toys that he could afford as an adult, but not as a 12-year-old. Sure, it's cool, but do you pay $80 for a toy robot for a preschooler? Big Foot could be the next Kota, even at a price point way lower than the extinct dino.
"It's going to depend on the household," says Goodfellow. "For one family, if that's going to be the gift, it might work, but another parent may think it's nonsense to pay that much for any toy."
Based on the early "out-of-stock" warnings on retailer sites, what is definitely working this year are toy sets where individual pieces are priced low, but shoppers are encouraged to buy in bulk. This means lower prices for parents on individual items, but maybe not overall. Who can buy just one Sing-a-Ma-Jig? Priced around $10 (some as much as $17 from resellers, but as low as $7 on sale if you can find them), retailers want you to pick up a couple at a time.
"It behooves manufactures to split the item up like that now when they might have sold them bundled a few years ago for $75," says Goodfellow. "Parents can buy in multiples, but it's also great for grandparents and uncles who may want to contribute."
Since last year's hottest toy, the Zhu Zhu Pet, is still on hot lists this year in new variations — and LEGOs and Barbie are perennial best-sellers as toy sets — this strategy might be locking in for a long stay.
Beth Pinsker is dealnews' Editorial Director. She was most recently the Editor of WalletPop.com, and has been a life-long bargain hunter. Follow her on Twitter — @bethpinsker. You can also sign up for an email alert for all dealnews features.
Photo credit: amazon.com