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Toy retailers get an early start on holiday season

Retailers stock their shelves with the latest toys and offer extra services to draw parents.

October 18, 2012|By Shan Li and Adolfo Flores, Los Angeles Times
  • Fisher-Price's Dune Racer, which may be among the year's hot toys, is displayed at a Wal-Mart in Rogers, Ark. Analysts predict the toy industry will see sales grow slightly or stay flat compared with last year’s holiday season.
Fisher-Price's Dune Racer, which may be among the year's hot… (Wal-Mart )

With the holiday season approaching, retailers are rushing to put the latest toys on shelves and roll out extra services, all to woo parents who may be spending a bit more on Junior this year.

Among the items ready to go are Lego Friends construction play sets, Monster High dolls, Batman Dark Knight action figures and collectible Squinkie Zinkies, all expected to be big sellers this year. A ghost of Christmas past — the Furby toy that resembles an owl — is reappearing this year, decked out with extra features.

It's too early for lists for Santa Claus, but high-tech toys that fly, talk and even get fed using smartphones are already getting attention from retailers and parents. Merchants say they are scurrying to cater to children's increasingly tech-savvy tastes with products including tablet computers such as the Leapfrog LeapPad 2 and Kurio, analysts said. Toys R Us recently stepped into this burgeoning market for the school-age set with its own $150 Tabeo tablet for kids.

"We're so tech-oriented that kids naturally pick up on that because we're always on it," said Charlene Shin, 32, a Glendale homemaker who expects to buy more digital toys for her two kids this Christmas. "There is a direct correlation between how much time parents spend online and how much kids are aware of technology."

Technology has crept into even classic toys such as a Barbie with a built-in video camera and battery-operated cars and helicopters that are controlled by smartphone apps instead of separate remotes.

Hasbro Inc.'s Furby — an electronic furry toy that made a huge splash in the late 1990s — is relaunching this holiday. With an accompanying app, for example, tablets and smartphones can be used to "feed" the toy by choosing food from a menu and flicking it from the screen into its mouth.

"This season will just be another link in this chain in a massive shift toward technology" in the toy industry, said Jason Moser, a research analyst at Motley Fool.

Aside from digital gadgets, kids are sure to ask for more traditional construction sets, dolls and toys linked to hit movies or TV shows, analysts said.

The economy will continue to play a key role in how much and when parents spend on their kids, with analysts predicting the toy industry will see sales grow slightly or stay flat compared with last year's holiday season.

With U.S. retail sales totaling $21.2 billion last year, toys are big business — especially during the final months of the year, when toy merchants can rake in as much as 40% of their annual sales. Shoppers this year will drop an estimated $586.1 billion during that time, according to the National Retail Federation, with a healthy chunk of that holiday budget going to toys.

Just this week Mattel Inc., the nation's largest toy maker, reported a strong third quarter, boosted by sales of American Girl dolls and Fisher-Price toys. The El Segundo company was upbeat going into the all-important holidays.

Merchants that carry toys typically spend much of the year researching the hottest trends, ordering and then planning promotions to persuade parents to open their wallets. This year, retailers say, consumers are likely to start seeing a blizzard of ads in the last half of November — after the presidential election wraps up and television is finally free of campaign commercials.

Price remains a primary concern among budget-conscious shoppers.

"Price points will still be an issue," said Laurie Schacht, co-publisher of gift guide the Toy Insider. "Toys that fit under the $50 category, under the $25 category and even under the $10 category will be popular."

Competition is already underway among retailers eager to court children and parents earlier than ever.

Best Buy Corp. promised to match prices of online competitors on select items. Target Corp. followed this week by also vowing to match prices from Web rivals Inc. and the online stores of retailers such as Toys R Us, Wal-Mart Stores Inc. and Best Buy.

The discount chain is also adding QR codes — digital bar codes that can be scanned with a smartphone — onto some of its hot toy picks so shoppers can order the plaything right in the store aisle and get it delivered to their homes.

Wal-Mart extended its layaway program by one month and slashed the fee for opening an account. It has also launched Toyland Tuesdays, when prices on select toys are reduced each week.

Wal-Mart spokeswoman LaToya Evans said toys are usually popular items for layaway as parents budget for the season.

"Last year millions of Americans relied on layaway at Wal-Mart to provide a great holiday for their families," Evans said.

Toys R Us also offers layaway and this year rolled out a reservation program for some popular gifts well before anxious shoppers start rushing to malls. Harried parents can reserve them in stores until Oct. 31, pay a 20% deposit, then pick them up and pay the rest by Dec. 16.

"We can provide customers added opportunities to alleviate stress during the holidays," company spokeswoman Adrienne O'Hara said. "This way, you don't have to wait in line or call the store every day" asking if an out-of-stock toy had been replenished.

That will be a big help for Nichole Joubert, 42, who is budgeting about $600 to buy gifts for her three kids. The Glendale resident, who is on disability, said her extended family is more financially stable this year and expects to shell out more money to ring in the holidays.

Two of her kids want their own laptops. A third wants a new Nintendo DS game console.

"She just got a DS and now she wants a new one," Joubert said. "I'm not getting it for her, but maybe her grandmother will."

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