It’s the peak of autumn, and I am writing this column from my home office in Illinois. It’s Halloween season, and festive parties and trick-or-treat events are populated by masses of kids, many of whom are decked out in costumes purchased at the local Spirit Halloween, a seasonal pop-up retailer that often inhabits the shell of a defunct retailer, like Toys “R” Us or Kmart.
Once one of the largest toy retailers in the U.S., Kmart recently closed its last full-line store after years of slow and painful decline, a cruel and unusual end to the legacy of S.S. Kresge. Meanwhile, Toys “R” Us, which closed its U.S. stores in 2018, is blazing a comeback trail by forging partnerships and opening new store concepts.
Nearly 10,000 miles away, in Australia, it’s the height of spring, and Kmart is doing booming business.
It’s stocked for the holidays and ready to delight shoppers with a wide array of trendy, exclusive merchandise. On the other hand, Toys “R” Us ANZ hasn’t fared quite as well, stalling in its efforts to rejoin the brick-and-mortar world while spinning its wheels in the digital realm of e-commerce, fighting for brand awareness.
While the opposites of life in the U.S., Australia, and New Zealand can feel like “The Upside Down” or “Bizzaroworld,” the reality is that we’re all headed in the same direction. The holiday rush is on, and Christmas comes on the same day, whether you’re in Sydney, Auckland, or Chicago.
Parents, grandparents, and other gift-givers are on the holiday hunt, looking for the perfect toy or game for the kids in their lives.
Here in the States, this holiday season is one peppered with uncertainty. Mixed messages regarding the strength of the U.S. economy and its job market loom amid the tumultuous political climate in a Presidential election year. While Christmas, Hannukah, and Kwanza collide in the same week this year, the selling season is five days shorter.
According to the National Retail Federation, overall U.S. retail spending during the November-December holiday season is set to grow between 2.5% and 3.5% compared to 2023.
While the organization doesn’t include toys in its breakdown, Adobe Analytics does and expects digital sales of toys — driven by what it’s calling “the first truly mobile-first holiday season” — to hit $8.1 billion, an increase of 5.8% over the same period last year.
Ultimately, the U.S. toy industry and its global peers seek a win this season.
Given the challenges of the past 6-7 years, ending 2024 flat to slightly down would achieve that goal as the industry looks forward to next year for a return to real growth. I expect skewed sales numbers reflecting fewer units sold at a higher price, continuing a trend of recent years.
With orders shipped and Q4 moving quickly, retailers are now responsible for much of this season’s success as the toys have been handed off. I always say that you can’t simply pile a bunch of toys and games on a shelf and expect them to sell themselves. No matter where you operate, basic retail fundamentals remain the same: a toy store or department should be well-stocked, well-merchandised, constantly maintained, and staffed by people passionate about the product.
Those key ingredients can move product and allow competition on more than price alone, but aggressive pricing is occurring earlier than ever, at least here in the States.
As the industry charges forth with the holiday homestretch on the horizon, now is the perfect time to check in with partners and collaborators to see how you can best support one another to ensure clean inventory channels on the other side of the holidays.
Being set up for success in 2025 just might be the greatest gift of all.
James Zahn, best known as The Rock Father, is the Editor-in-Chief of The Toy Book, the leading trade publication serving the North American toy industry since 1984. He is also a Senior Editor of The Toy Insider and The Pop Insider and is frequently called upon for expert commentary on the toy industry. He has been featured in The New York Times and Forbes, and has appeared on Yahoo! Finance, CNBC, BBC, NBC, ABC, CBS, FOX, CNN, and more. Connect with him on LinkedIn or follow him on X and Instagram @therockfather.
This article originally appeared in Edition 13 of The Toy Universe Magazine
