For parents, finding the right holiday toy isn't all fun and games.
After a robotic hamster became the breakout hit last Christmas, the race is on to snag this year's hot toy. But what is it?
No front runner has emerged yet, but parents and kids have been buzzing about squishy pencil toppers, a Barbie equipped with a real video camera and toy musical instruments that can be played by lightly touching the paper surface.
"Part of what makes a toy the must-have toy is the scarcity in finding it," said Sean McGowan, a toy analyst at Needham & Co. "There's social currency attached to being the parent who can deliver it and the kid who gets it."
Toys may be a bright spot during what industry watchers are predicting will be another tough holiday season for consumer spending. Compared with other retail categories such as luxury and electronics, toys weren't hit as hard during the economic downturn for one major reason: Parents will cut back everywhere else before they deprive their children of that Buzz Lightyear action figure or the latest Bratz doll. Plus, toys are relatively cheap.
For those who haven't started shopping, prepare yourselves for bigger toy displays, more pop-up shops and better discounts as retailers boldly move into their most important time of the year. Many toys are priced around the "sweet spot" of $30.
Discount giant Wal-Mart Stores Inc. has expanded its toy assortment and inventory and added "Rollback Alley" to most stores, an aisle that features deals on toys. Toys R Us Inc. will operate 600 temporary holiday shops and 10 FAO Schwarz pop-up stores nationwide.
Target Corp. is featuring 10% more discounts and items in its annual holiday toy catalog. And Sears, which last year brought back in-store toy sections to 20 of its department stores, is opening 79 more this year.
Even though the economy has forced her family to cut expenses, stay-at-home mom Dianna Lynn, 40, said toys would still be at the top of her shopping list this Christmas.
"You still want them to have something to open and something to get excited about," Lynn said while browsing a Toys R Us Express store in Rolling Hills Estates recently. "Santa doesn't know about the recession."
Squinkies, Zoobles and Sing-a-ma-jigs, oh my
Because price will again be the most important factor for many shoppers, toy manufacturers have focused on making products that can fit into small budgets. Experts are predicting a strong year for "mini collectibles" — toys that are inexpensive but feature a full lineup of characters with different looks, sounds and personalities.
The collectibles category has performed extremely well in the tough economic climate, with Zhu Zhu Pets, an assortment of robotic hamsters, and Bakugan Battle Brawlers, a line of spherical, spring-loaded miniature toys, flying off shelves.
This year's newcomers are led by Squinkies, soft and squishy figures that can be worn as jewelry, used as pencil toppers or displayed in play sets; Zoobles, plastic spherical characters that pop open when placed in their "happitats" to reveal creatures inside; Sing-a-ma-jigs, plush creatures that sing, harmonize and chatter with one another; and Hot Wheels R/C Stealth Rides, mini-vehicles that fold flat inside cellphone-size cases that double as remote controls.
For parents, they are an economical choice, said Lydia Ho, a stay-at-home mom from Rolling Hills Estates. Her 8-year-old daughter, Elizabeth, particularly enjoys Silly Bandz, colorful rubber bands molded in different shapes; a pack costs just a few dollars.
"It's easy — it's not an investment if they lose it or it breaks," said Ho, 43.
Toy experts say collectibles appeal to kids, who like to accumulate different characters and trade them with friends. Owning the most items can be a status symbol, such as with the Beanie Babies phenomenon in the 1990s.
Barbie gets more (and bigger) rivals in the doll aisle
In recent years, the fashion doll category has become highly competitive thanks to a growing number of plastic figures with diverse images and personalities, whether cute, sporty, scholarly, glamorous or edgy.
This holiday season, new players such as Mattel Inc.'s Monster High — a line of characters, such as Frankie Stein and Draculaura, who are the offspring of famous monsters — and the relaunch of the saucy Bratz dolls by rival MGA Entertainment Inc. are heating up the closely watched doll battle.
Fashion dolls are always popular among girls, who like to emulate their favorites and dress them up in cool outfits and accessories, retail experts said. A trend within the category this year is the rising popularity of larger, 18-inch dolls (Barbie is 11.5 inches tall), which girls find more relatable, they said.
At a Toys R Us Express to redeem a birthday gift card, 8-year-old Elena Wingard passed by the smaller dolls, instead opting for a Dream Dazzlers styling head.