Amazon's toy sales have rocketed — up 30% year over year in the third quarter at its flagship site and 15% year over year at its U.K. site — according to reports from e-commerce data and advisory group Edge by Ascential.
The toy categories of outdoor play, toys for adults (driven by 65% sales growth in grownup games to an estimated $100 million) and automotive toys are boosting Amazon to the point where it will celebrate the New Year as "one of the biggest toy sellers in America," according to the report.
The performance is likely to inspire Amazon to launch its own private label in the category next year, according to Edge by Ascential analysts. (Private label items that appear to be toys are actually preschool classroom supplies, Amazon told Retail Dive.)
Last year, Toys R Us was already hobbled by financial woes that interfered with its merchandising and marketing abilities at the holidays, but this year, with the chain gone, there has been a mad scramble for its market share, representing some $11.5 billion in annual sales.
Some of that, about 20%, is going to "simply evaporate," according to Juli Lennett, senior vice president, industry adviser for The NPD group's U.S. toys division. Still, the holiday season is when half the toys in the U.S. are sold, and most (83%) of those taking advantage of the Toys R Us liquidation sales earlier this year gave those toys away before the season, Lennett found.
Retailers have sent out catalogs and merchandised stores in order to take advantage of the opportunity, and Amazon is hardly the only one seeing toy sales rise. Major chains that already shared a slice of consumers with the toyseller (including GameStop, Walmart and Target) are attracting more toy shopping, according to a report from brand insights firm InMarket .
"Major retailers like Target, Walmart, Kohl's, and even wholesale clubs like Costco and Sam's Club have all expanded their toy departments, offering more toys and kids' products than ever before," Marissa DiBartolo, editor-in-chief of The Toy Insider, told Retail Dive in an email. "Amazon is a top contender ... Even grocery store retail chains like Meijer, Fred Meyer, and Kroger are starting to carry more toy offerings, including Geoffrey's Toy Box pop ups in Kroger stores. Consumers can also find incredible toy offerings at independent specialty toy stores in their neighborhood. Shopping small this time of year is always a great choice, and specialty toy store owners have so much knowledge about the toy industry and can really help consumers make great toy selections."
Indeed, Target Chief Merchandising Officer Mark Tritton told analysts last month that toy comps rose 20% in the third quarter, saying, toy sales "have exceeded their expectations in terms of sales and share," according to a transcript from Seeking Alpha. Walmart Vice President of Investor Relations Dan Binder was vaguer in his own comments to analysts last month, according to a transcript from The Motley Fool, noting "some strength" in toys in the third quarter, adding "[W]hen we look at Nielsen and the NPD Group, it is very clear that we are gaining share in multiple categories."
The brick-and-mortar merchants have something of an advantage this time of year when there's still shopping to do but a narrow delivery window for online orders. But Amazon's advantage may be that the way people shop at Amazon — using it to buy things when they know exactly what they want or need — is also the way people shop for toys. Last year, more than 70% of toys were bought for a specific occasion like a birthday or the holidays, and Toys R Us sold 70% of its toy merchandise because "kids asked for a specific toy or brand of toy," according to NPD Group's report.