Amazon to start new Christmas tradition with its own toy catalog

Discussion
Source: Toys "R" Us
Jul 05, 2018
George Anderson

Toys “R” Us is gone and there’s a market void to be filled. Bring on the Amazon.com toy catalog.

Bloomberg reports that the e-tailing giant is looking to make a big move for the Christmas selling season with the publication of a catalog that will be mailed to millions of homes across the U.S. and distributed by hand at the company’s Whole Foods stores.

The Toys “R” Us “Big Book” once heralded the coming Christmas holiday season when it arrived every year in October. Rivals Target and Walmart also produce catalogs that many children like to hold onto to make their Christmas wish lists.

With Toys “R” Us being history, plenty of retailers are looking to grab a share of the toy giant’s sales revenue, which totaled $6.5 billion in U.S. last year. Party City announced last week that it planned to open 50 Toy City temporary stores in early September alongside its Halloween City pop-ups located across the country. Party City is also expanding its selection of toys online.

“The creation of a Toy City concept to complement our temporary seasonal retail strategy is a logical extension of our brand; one that will allow us to leverage our existing pop-up store capabilities and capitalize on the category whitespace that has recently been created,” said Party City CEO James Harrison.

Amazon will not be the first e-tailer to utilize a print catalog to raise its profile and drive sales. Last year, Wayfair produced a 92-page catalog that featured 775 items unique to the site, including bedroom furniture, custom upholstery, lighting, rugs, lighting, sofas and more. The e-tailer said at the time that product selection for the catalog was based on “quantitative and algorithm-based insights” from its own proprietary tech used to assess its advertising effectiveness and with data from media brand partners, including HGTV, This Old House and others.

DISCUSSION QUESTIONS: Do you think Amazon is making the right move with the publication of a printed toy catalog ahead of the Christmas selling season? How, for example, do you think the catalog will affect the site’s pricing practices?

Please practice The RetailWire Golden Rule when submitting your comments.
Braintrust
"There are plenty of possibilities for Amazon to benefit from their ecosystem this season with the void left by Toys 'R' Us!"
"This is yet another channel that incumbent retailers thought Amazon couldn’t or wouldn’t enter."
"I love it when Amazon goes against mainstream thinking and an expensive print catalog with harder to measure ROI is certainly against the tide."

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34 Comments on "Amazon to start new Christmas tradition with its own toy catalog"


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Art Suriano
BrainTrust

There is nothing wrong with producing a catalog, and there will be some parents and children who will enjoy using it. Pricing will be an issue if they print prices because Amazon will change them as they get closer to the holiday. So I think the opportunity here through technology is to make the catalog interactive with easy-to-scan SKUs for a customer’s phone or tablet. This way customers can get the price on the item they’re interested in and immediately place it in their “Wish List.” Today it’s all about the experience, and a significant part of that experience is convenience. Make the catalog a fun must-see item for kids and easy for parents to use and you’ll have a big win.

Kiri Masters
BrainTrust

Great point about dynamic pricing. I wonder if they will take a cue from the dynamic pricing in Amazon bookstores and include something like a QR code.

James Tenser
BrainTrust

Well observed, Art. The dynamic pricing issue is one of the more intriguing aspects of Amazon’s proposed toy catalog. It would be fairly easy to discount off printed prices on the website (“member pricing” or personalized), but near impossible to increase margins on high-demand items late in the season.

Amazon could publish a “wish book” without prices. Either option leaves the question of how will it engineer a seamless link from paper to online purchase. Bar codes might work, but it’s a clumsy experience at best. Will an Amazon app update be part of the experiment?

As Ryan observes, Amazon can afford to treat this as a large-scale experiment, even allowing for the cost of printing and distributing the catalog. Will we see millions of newspaper inserts? Direct mail?

One thing seems certain — Amazon’s toy catalog will drive significant share during the pre-holiday season.

Neil Saunders
BrainTrust

Everyone will be vying for a slice of Toys “R” Us’s market share this holiday season. Amazon will gain, come what may. However, to drive as much share as possible it has to compete with a lot of physical retailers including Target, Walmart and even Kohl’s who are ramping up their play in toys. A catalog helps them to reach new audiences and consolidate their presence among exciting customers.

Given Amazon’s dynamic pricing model, it will be interesting to see whether items are priced or whether shoppers have to visit the website for the latest pricing.

Paula Rosenblum
BrainTrust

Great point on the pricing topic, Neil! The implications are interesting.

Ryan Mathews
BrainTrust
Amazon is relentlessly innovative. Some of its innovations work. Some of its innovations fail. And of course, some of its innovations never seem to make it past the “Press Release/Patent Application/Very Limited Beta,” phase. So why not experiment with a printed catalog to promote the holiday selling season? Toy catalogs’ primary targets were always children and parents unsure what it was their children wanted. Trying it one year isn’t a lifetime strategy. If it works, I assume they will continue it. If it doesn’t they’ll kill it and try something else next year. As to pricing, we’ll have to wait and see. There are a lot of Toys “R” Us customers who will be looking for a new source of toys. Amazon could use the catalog to promote “hot” prices on high-demand toys — although figuring out which toys will “pop” is clearly still more art than science. Or it could normalize prices between the catalog and the webpage. Or it could try something else. One thing is certain, they probably asked themselves this question… Read more »
Lyle Bunn (Ph.D. Hon)
Guest

What would our consumer Christmas be without one more “wish book” to browse through! Pity the product providers who are expected to pay to play in these many marketing options centered around retail supply. Catalogues are a marketing building device and when a retailer is seen as a source of reliable supply, that retailer becomes the sourcing option. Consumers are simple. Retailers can get wrapped up in themselves, an ailment that Amazon suffers from and has been destructive to retail at large.

Jeff Sward
Guest

This is a great move by Amazon. Mom and dad are already shopping Prime. This is the perfect way to let kids not already hooked on Prime browse and suggest. The local toy store just closed? No problem. Browse away. It’s certainly not the same experience, but a great way to pull a new generation into Amazon’s orbit.

Cathy Hotka
BrainTrust

Catalogs work (ask Restoration Hardware) and toy catalogs provoke a special kind of longing in children. This is an overt move from Amazon to assume the mantle from Toys “R” Us, and I’ll predict that it brings great results.

Gene Detroyer
BrainTrust

Is the RH catalog really successful? They send it to us, but it goes directly to the recycle bin. Never makes it to the apartment.

Mohamed Amer
BrainTrust

For Amazon, business does not move in a linear and predetermined direction. It’s more circular because unlike machines, humans have emotions — memories, relationships and experiences are difficult to incorporate into an executable algorithm. Adding a paper catalog serves to link the online brand with a physical object that can help customers imagine new possibilities while simultaneously adding to Amazon’s trove of data and assessing the value of catalogs in their marketing mix.

Amazon is also looking at the departure of Toys “R” Us as a vacuum that needs to be filled. The online and physical worlds are coming together in retailing and Amazon is making sure the company will be top-of-mind eventually in every lifestyle scenario no matter how customers approach the purchase journey.

Bob Phibbs
BrainTrust

Individual toy stores’ catalogues are staples so this isn’t surprising. Let’s face it, Amazon is going to devolve into a regular retailer more and more albeit with different trappings.

Jeff Sward
Guest

” … devolve … “? It seems to me they are teaching the rest of the universe how to use old tools in complete synergy with today’s consumer shopping habits.

Bob Phibbs
BrainTrust

Publishing a catalog and opening brick and mortar stores are nothing new.

Jeff Sward
Guest

Right … “old tools.” I have to respect that Amazon instantly recognized a vacuum and filled it. BAM. They didn’t over-think it. They saw an opportunity for market share with a relatively easy way to execute. BAM. A very familiar shopping tool woven into a VERY familiar shopping platform. The wheel did not need to be reinvented here. A perfectly good wheel was taken off of a jalopy and put on a race car … or should I say bulldozer?

Anne Howe
BrainTrust

It’s never a bad idea to serve a newly underserved market!

Ricardo Belmar
BrainTrust
There is no denying that a print toy catalog is a proven successful vehicle for driving holiday sales. Amazon is making a smart move to help consumers with the discovery process. Kids have always enjoyed looking through the Toys “R” Us catalog and Amazon surely hopes to capture some of that emotional attachment that is sure to drive parents to make purchases. Being Amazon, however, I expect some sort of a twist to the normal print catalog that better ties items on the page to their mobile app, especially knowing that Amazon will adjust pricing as we near the holidays. Perhaps they will work with some of the toy manufacturers to drive unique online content they can push via a scan of the page from the Amazon app. I would not be surprised to see some Alexa tie-ins as well — you see an item you want in the catalog and you ask Alexa about it and she prompts you to make an instant purchase with an added discount. There are plenty of possibilities for… Read more »
Kiri Masters
BrainTrust

As other experts have pointed out, I’m curious to see how the prices will be advertised in the catalog given Amazon’s marketplace model.

This is yet another channel that incumbent retailers thought Amazon couldn’t or wouldn’t enter. Amazon didn’t do brick-and-mortar retail — until they started opening bookstores. Amazon wouldn’t spend big bucks on media campaigns — until they took out a Super Bowl ad. Now they are dipping into the direct mail channel and giving catalog retailers a run for their money. Any retailer that resists the idea that Amazon will disrupt their channel or category should take heed (again).

Phil Masiello
BrainTrust

Amazon is certainly going to take advantage of this void in the market and they have the best ability to contact the customers. They have the mailing addresses of every person who has ever purchased on the site. That is a powerful list to mail to. They also know the purchase behavior of their customers. So they can directly target toy purchasers.

I don’t think it will affect the pricing practices on Amazon.com. They can use coupons and Prime discounts in place of price reductions. This will be about the convenience of shopping over the holiday season.

Ken Morris
BrainTrust

While digital shopping is becoming the norm, for many people creating Christmas wish lists has historically been done by perusing a catalog and folding corners or circling items they like. The merging of the physical and digital worlds are complementary.

Amazon already has an extensive mailing list of Prime members and they can identify which customers have children based on what they have purchased. Regarding pricing, the catalog shouldn’t impact online prices, as long as the online prices never exceed the catalog prices. The catalog prices should be the ceiling and Amazon can offer special online promotional pricing for extra savings.

It will be interesting to see if Amazon expands the catalog concept to other product categories.

Max Goldberg
Guest

Amazon should use the toy catalogue to its advantage, by highlighting the breadth of its toy offerings, while heralding the coming holiday season. Having prices in the catalogue will limit the company’s ability to dynamically price. This move makes the statement that Amazon is the place to shop for all of your holiday gifts.

Paula Rosenblum
BrainTrust

Amazon is making noise in the toy business. That’s a good idea, but they also will in effect be creating a “showroom” that parents can use to help kids decide what they want (and what the “base price” is).

Good for the toy business … not so sure it’s so good for Amazon.

Georganne Bender
BrainTrust

When you think about it, the Sears catalog was the Amazon of its time. And now Amazon holds the title of retail behemoth.

People still love catalogs, especially kids, who pour over the pages, hoping those cool toys will land under their tree on Christmas morning. Amazon is smart to start a new toy tradition – and make a lot of noise about it. The Whole Foods personal connection with shoppers is huge. Get that book into their little hands early so mom and dad can have Alexa take care of the holiday shopping hassle for them.

All that’s missing is the magic of discovery on the sales floor. Yep, I still like to brave the holiday crowds. #lostbreedofshopper

Gene Detroyer
BrainTrust

Great comment about Sears. When I teach corporate sustainability, I describe the Sears catalog to the students and then ask them what that reminds them of today. Of course, the answer is Sears. They the next question is why didn’t Sears become Amazon? Following questions, why didn’t Sears become Home Depot with their DIY legacy. Next, why didn’t Sears become Best Buy with its appliance legacy. Great study in company myopia.

Doug Garnett
BrainTrust

History shows that printed catalogs increase the size of orders and the number of orders. Zappos found this to be true when it came to shoes.

So it makes complete sense for Amazon to print and send out a toy catalog. What’s fascinating is how much Amazon is becoming — just another retailer.

Fascinating but not surprising. Despite the Sturm und Drang about retail difficulties, retailers built smart promotional programs based on what works. Now, as Amazon follows what works, the “disruptor” looks more and more like the “disrupted.”

Camille P. Schuster, PhD.
BrainTrust

Experimenting with a catalog to fill a void in the marketplace is a great idea. Whether or not Amazon prints prices, consumers are likely to check prices when getting ready to purchase. Possibly a base price might be in the catalog along with a statement to check online for daily sales. This is certainly good for the toy catalog experiment.

Shep Hyken
BrainTrust

I love the blend of high-tech and low-tech, or digital and analog, or website and catalog. If families, especially kids, take to the catalog the same way I did when I was a kid, then Amazon will have extended their promotion in a way that will emotionally connect with with their customers. Isn’t it fascinating that Amazon is opening brick-and-mortar book stores and sending out catalogs? I guess the old saying is true. “Everything old is new again.”

Gene Detroyer
BrainTrust

I remember as a kid the excitement of getting the FAO Schwarz catalog. I’d go through it and mark off what I wanted from Santa. That is the value I see here. It is for the kids. As a Christmas toy shopper for my grandkids, I go straight to Amazon and take care of eight of them in about an hour and a half.

Mark Price
BrainTrust

This move to send holiday toy catalogs makes sense for Amazon for a number of reasons: 1.) A specific consumer segment uses a catalog for wish lists for their children, which works the best when the children can browse rather than look online; 2.) Catalogs serve as persistent reminders and credibility builders for Amazon toys (since consumers don’t necessarily associate Amazon with kids toys), and 3.) A catalog can be a vehicles for content-based marketing (stories that engage consumers and their children).

Given that Amazon incorporates dynamic pricing on the site, I believe they will have to go to the lowest price available rather than lock consumers into the catalog prices, which could be higher.

Ed Rosenbaum
BrainTrust

Betting against Amazon is like betting against Golden State in basketball or New England in football (most years). In fact, Amazon is fast becoming the “sure thing.” Amazon is smart (understatement) in jumping in to the void left by Toys “R” Us. They will be successful. How large it becomes is yet to be determined. The pricing model decided on will be the determining factor. What’s next?

Peter Charness
BrainTrust

Looking for some BrainTrust contributions to this…. Don’t recall the percentage, but Amazon gets a good/high percentage of its sales from shoppers who already know the item that they want to purchase. For this crowd, the path to purchase is research and discover the product elsewhere and then buy on a site that’s easy to use, and trusted both for price and friction-less transactions with a great return/service guarantee. As a I have no idea what I want, or I got sent a coupon or offer to stimulate my demand and then let me browse the Amazon website to find something, well the shopping experience from that standpoint is not necessarily that fabulous.

So perhaps a catalog (and the odd brick and mortar store) really does add to the front part of the equation. The “help me get interested in a product first”… the buy part of the equation is already there.

Richard J. George, Ph.D.
BrainTrust

Another pre-emptive move by Amazon for all of the noted reasons in the article. Makes good sense from their focus on convenient customer solutions. In addition to the printed catalog, I assume Amazon will offer an electronic version as well.

Don’t believe you will see any negative pricing implications. If any retailer has learned how to price right products it is Amazon.

Sterling Hawkins
BrainTrust

Amazon is focused on delivering value. First with books online. Then general eCommerce online. Next physical stores. Now magazines. And everyone else is playing a game of follow the leader vs. working on delivering value themselves. This game is not about technology; it’s about seeing value and being 100% focused delivering on it.

Jeff Miller
BrainTrust

I love it when Amazon goes against mainstream thinking and an expensive print catalog with harder to measure ROI is certainly against the tide. If Amazon was concerned about ROI or marking a profit from a print catalog marketing campaign then I would question the move but since quarterly profits are not the the goal and dominating yet another industry like Toys over the long haul is the goal then I can see this fitting squarely into that strategy.

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Braintrust
"There are plenty of possibilities for Amazon to benefit from their ecosystem this season with the void left by Toys 'R' Us!"
"This is yet another channel that incumbent retailers thought Amazon couldn’t or wouldn’t enter."
"I love it when Amazon goes against mainstream thinking and an expensive print catalog with harder to measure ROI is certainly against the tide."

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