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> To a certain extent, toys are a seasonal product. True there will be toys
> sales
> all year long, but the volume of toys sold is concentrated between
> November and
> February. I definately see this in my BL store (becuase I sell primarily
> sets).
> Toy sales at other times of the year do happen, but at a more modest
> level.
As it happens, there was a magazine article in (Australian) Business Review
Weekly this week primarily about the demise of TRU but also about Wal-Mart
as it is the category-killer's killer. What it says ...
Discounters [e.g. Wal-Mart] realised that they did not need to match the TRU
range. They simply needed to offer a good electronics range and cheap
popular toys. By focusing on fast-sellers, discounters achieved better floor
space and inventory efficiencies -- enabling price aggression. Attackers
[e.g. Wal-Mart] also better better handled two key factors that had always
existed [in toy retailing]: seasonality and anomalies. More than 45% of US
[toy] sales occur between October and December, and another 25-40% over
summer. And the top 10% of stock-keeping units account for 50% of sales.
These conditions are perfect for cream-skimmers, who can stock only the big
sellers and devote extra floor space to toys only during sales peaks. ....
As a result TRU has lost market share from 25% in 1988 to 17%. ... From a 2%
share in 1983, Wal-Mart dethroned TRU in 1998 and is today's clear leader
with a 22% market share. The discount format is dominant.
So, from the above, I would conclude that being April (and hence not
pre-Christmas or summer), Wal-Mart doesn't think there is enough toy sales
to warrant carrying much stock. I presume with computerised inventories,
they are able to know the level of sales in particular months for not only
categories like "toys", but also specific brands of toys, e.g. Lego, and
perhaps even specific products e.g. Harry Potter Castle (although specific
products might change too quickly to be able to get good data).
For the Aussies, you might be interested to know that, as the Christmas
season and summer coincide for us, the Australian toy sales market has a
single peak with 70% of toys being sold in December & January. Lego is not
yet sold by the rock-bottom "discount chains" here in Australia (the Crazy
Clarks etc), but my guess is that BigW and KMart probably have the closest
positioning to Wal-Mart in our market place although both of them seem to be
shifting up-market (towards a department store model) rather than
down-market (towards Crazy Clarks). I don't really see any major chain in Oz
dramatically altering the floor space allocated to product categories in a
seasonal way, more a case of more fully stocking the area they normally
allocate rather than turning over whole new sections of the store to one
category. Of course, this might be because the peak sales period for toys is
probably the peak sales period for a lot of other categories, and hence it
is difficult to significantly alter floor space allocation between the
categories.
Kerry
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Message is in Reply To:
 | | Re: What's up with the Wal*mart Lego selection?
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| (...) To a certain extent, toys are a seasonal product. True there will be toys sales all year long, but the volume of toys sold is concentrated between November and February. I definately see this in my BL store (becuase I sell primarily sets). Toy (...) (20 years ago, 8-Apr-05, to lugnet.market.theory)
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