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Follow UsJackie Sindrich
NEW YORK: Play's the thing, recession or not. Toy sellers this holiday season
are managing to shrug off the "failed dot-com' label, as companies like
Toys "R" Us Inc. and K-B Toys boast promising online business, despite
languishing overall US retail sales.
"I wouldn't be surprised if online toy retailers were doing well this
holiday season," said Ken Cassar, senior research analyst for Jupiter
Research. "The video game consoles, notably GameCube and XBox, have sold
very well and I suspect they've driven up sales of a lot of other
products," he said.
Companies usually do not break out their online sales figures mid-quarter, or
at all, but top toy sellers said sales have been impressive.
"We're well above our plan," said David Novitsky, vice president of
merchandising for Kbtoys.com and eToys.com, the Internet arm of privately held
K-B Toys, one of the largest US toy companies. Novitsky said K-B started seeing
major gains in online sales around mid-October, and they have continued to
breeze by expectations.
"We're in great shape," he said.
Formerly Web-wary consumers are taking advantage of e-tailers' sometimes
better availability of hot items, free or low-cost shipping incentives,
guarantees of on-time deliveries and other special deals in a less fragmented
online market, analysts said.
Meanwhile, US retail sales at discount, chain and department stores slumped
during the first two weeks of December, after rising 4 per cent in November, as
reluctant consumers put off purchases until closer to next week's Christmas
holiday, according to Instinet Research.
Timothy Laseter, a former consultant for online retail giant Amazon.com Inc.
and partner with consultancy Booz Allen Hamilton, said online shoppers tend to
have higher incomes than the average shopper, which has helped e-tailers boost
sales despite the wider sluggish retail trend.
"And that's the last place people cut, on their children," he
noted.
Target.com 'way ahead' of last year
K-B, seeking to boost its online presence, bought the assets of dot-com eToys
Inc. last year. EToys had fallen victim to overcapacity and sliding sales,
forcing it into bankruptcy. K-B has since successfully integrated eToys by
managing inventory and cutting advertising expenses, Novitsky said.
Toys "R" Us, the No. 2 US toy retailer behind Wal-Mart Stores Inc.,
wouldn't comment on whether sales were above plan, but said it was pleased with
sales of big-ticket items, Harry Potter toys and family-oriented games.
Spokeswoman Jeanne Meyer, citing Media Metrix data, noted traffic to
Toysrus.com is also running nearly five times greater than at Walmart.com in the
toys and video games area, and 13 times greater than Bluelight.com, Kmart
Corp.'s Internet-based business.
Discount chain Target Corp. said its holiday online sales are tracking
"way ahead" of a year ago. "We'll be looking at doubling or
tripling last year's sales volume," said spokesman Douglas Kline. He said
he expected its toy sales to follow that same pattern.
Wal-Mart is also racking up solid sales via Walmart.com, as shoppers snatch
up Nutcracker Barbie, educational toys like LeapFrog, and the always-in-demand
video game consoles, a spokeswoman said.
eBay has hogwarts castle
Online auction site eBay Inc. has been particularly successful in snagging
shoppers on a quest for the items stores can't seem to keep on shelves, such as
Harry Potter's Hogwarts Castle by LEGO, which is in the running as this year's
"Tickle Me Elmo."
"Hogwarts Castle is virtually impossible to get anywhere else, but you
can find it on eBay," said eBay spokesman Jim Griffith. A search on the
company's Web site for the elusive Harry Potter-themed toy landed 268 items,
with most bids in close range of its $90 ticket price.
"It looks like a really good season, toys especially," Griffith
said of the holiday outlook for eBay, which has more than 35 million registered
users. "I could say better than last year."
(C) Reuters Limited.