Late Shoppers Find OOS on Hot Toys

Discussion
Dec 15, 2005
George Anderson

By George Anderson


Shoppers who wait until Christmas draws closer may find they get better deals on some goods but, as many others are discovering, they may also be faced with the reality that the item they are looking to purchase is no longer in stock. This is especially true of the hottest toys and games on the market.


According to a report by The Associated Press, toys sellers are running short on hot items such as Amazing Amanda, Dora’s Talking Kitchen, I-Dog, ChatNow and Shell Shocker. And Xbox 360 as they say in parts of the New York metropolitan area: “Fahgetaboutit.”


The season, overall, has been pretty good for toy sellers, said Sean McGowan, an analyst at Harris Nesbitt. He estimates that holiday toy sales will be flat to up to two percent. While those may not sound like glowing numbers, toy sellers will take them, considering past years where sales have declined.


While the season may bring a moderate increase for traditional toy retailers, it is proving a boon for eBay. The online auction and sales site is selling 85 toys a minute, according to Jim Migdal, a senior category manager for toys for the company. Last week, 2,350 units of I-Dog were sold (a 68 percent from the week before) and 1,600 units of ChatNow (+45 percent from the previous week) were purchased on eBay. 


Moderator’s Comment: What is your assessment of what is going on in the toys and games category? What does the growing presence of eBay mean for traditional
sellers of games and toys?

George Anderson – Moderator

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4 Comments on "Late Shoppers Find OOS on Hot Toys"


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Bernice Hurst
Guest
15 years 2 months ago

eBay could, conceivably, be seen as an opportunity for traditional retailers. Frequently – and I’m guessing this applies especially frequently to popular items – individuals grab what they can off retail shelves and immediately put them up for sale on eBay in hopes of making a profit. Frequently the strategy works, which means it will continue until retailers wise up and promote the fact that they are selling at rrp while eBay sellers deliberately inflate prices. Lesson for consumers? Get in early if you want to buy for a reasonable price rather than trying to play chicken in case you can buy cheap when, in fact, if you wait you may have to go online and buy at a premium.

Mark Lilien
Guest
15 years 2 months ago

Last minute shoppers often blame the retailer. A few feel guilty because, deep down, they know they could’ve bought the stuff earlier. One Christmas Eve early in my career, I worked at the Herald Square Manhattan Korvettes until 11 pm (they stayed open later than anyone else that night.) I was struck by the significant number of drunk shoppers, clearly guilt-consumed, who were shopping at the last minute, and feeling awful about it. Even though they felt bad, they didn’t hesitate to take it out on me and my fellow retail clerks. Hot toy shortages occur every year, with no exceptions, so any adult who cares knows these shortages will occur. It ain’t no surprise.

Matt Werhner
Guest
Matt Werhner
15 years 2 months ago

What does the growing presence of eBay mean for traditional sellers of games and toys? I do not know the specifics of the toy industry but this is a good question that can apply across all retail channels. Message to retailers: eBay will continue to be a strong presence, especially this time of year. Keep your product in stock. A big part of your sales come this time of year (you already know this). Easier said than done. Message to consumers: don’t shop at the last minute and expect to have everything in stock. Easier said than done.

Somebody please break this vicious cycle…Oh that’s right, eBay has.

Don Delzell
Guest
Don Delzell
15 years 2 months ago
Let’s separate the issues. First, OOS on hot selling toys and games. For most major retailers, on most items, this is either intentional, or poor replenishment practices. Past clients have sold to all channels of trade, and all major players in the toy and game category. Most retailers plan their sales in some form or another. Many use some manner of replenishment algorithm to adjust those plans during the season. Many share these plans with manufacturers in the belief that this will enable the manufacturer to meet their expected needs. Here are the problems with the theory: 1. The retailer holds no liability in the case of over-estimating demand. The supplier is then “stuck” with excess inventory and no reasonably profitable channel in which to move them. The number of times this happens impacts the amount of inventory the supplier will hold in support of a given retailer’s plan or projection. 2. The gross margin cost to a supplier of having excess inventory in a non-evergreen product post-Christmas is very high. The retail community has… Read more »
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