The Online Toy Market is Big Business
Punching the word "toys" into just about any Internet search engine
will return an endless list of sites. Shopping has moved into cyberspace.
And some toy companies are struggling to keep up with the demand.
There are many ways to monitor who is shopping and what they're buying.
The National Purchase Diary (NPD) was formed in 1953 to collect all kinds
of buying data. With the advancement of online technology, the NPD Group's
own systems advanced as well.
Sarah Mulvehill is a corporate communications specialist for the NPD Group.
"During recent decades, we've expanded our data collection techniques
to include new methods, such as electronic scanning and the Internet," she
says.
Located in New York, the firm now does point-of-sale tracking for the toy
industry. According to the firm's Web site, leading U.S. retailers provide
the company with monthly inventory, pricing and sales information. This information
is put into a database and used by their clients for research and marketing.
The firm runs a consumer diary panel in the U.S. that tracks the purchase
habits of thousands of households each month. From the type of information
the group collects, they can publish monthly best-sellers about the toy market.
Using this information, online toy markets know what the consumers are
buying from a number of sources. They can market their products accordingly.
According to an e-Visory Report by the NPD Group, online toy sales increased
from $45 million in 1998 to $425 million in 1999.
But for Dan Aysan at Toad Hall Toys, his shop's site
was created as a way to save time and money. The family-run store has been
operating as a physical store for about 25 years. The Internet site was launched
in 1996.
Launching the site has taken Toad Hall to more customers than their single
retail outlet could ever reach. "We've shipped to every continent except
Antarctica, and upwards of 18 percent of our business now is Internet-based,"
says Aysan.
The company originally began the site because a virtual catalog is cheaper
than producing a print version.
"We realized it was a much more cost-effective and dynamic medium than
print catalogs, so we went straight to the Web. To do a print catalog and
distribute it to the audience we have now would have been a major undertaking,"
Aysan says.
Instead, they opted to spend $300 a month to have their catalog accessible
on a global level.
Still, for shoppers looking to have all the options at their fingertips,
shopping in person is still the only way to go. "We've got 26,000 items
in stock at any given time in the store, and only about 1,500 of those make
it to the Internet," says Aysan.
Hen adds that online shopping also curbs impulse buys that occur in the
store.
Though the site doesn't have a hit counter, Aysan says it has been
turning a profit since its first month in operation. With orders that range
from about $20 at the lower end up to a high end of four figures, Aysan doesn't
believe the online toy market is in any danger.
"For us, it's been triple-digit growth every year for four years.
I don't expect it to slow down any time soon."
He believes people turn to online shopping sources for convenience and
to save on long distance shipping costs.
Though some critics cite returning merchandise as a problem when shopping
online, Aysan disputes it. He says the only problems they have had have been
due to defective products, something that comes with the territory in retail
sales.
Instead, he says Toad Hall's biggest problem has been trying to get
all their suppliers on-board. He adds that one has banned any e-commerce of
their product.
Another problem with shopping online is that buyers can't see the
products they are clicking on. But Aysan says the industry has been moving
in that direction anyway. "We focus a lot on brands that are trusted, or items
that can be written up very well with good product descriptions," he says.
"But nine times out of 10 these days, when you go into a toy store, you're
only looking at a box. You don't actually get to look at the toy itself.
So it's getting easier because manufacturers are focusing their efforts
on packaging, so it translates very nicely over to the Internet."
Toad Hall Toys uses existing staff to fill orders and answer customer calls.
But Aysan believes the online market will create some new jobs. "The biggest
need for workers for e-commerce are warehouse people. But it's not a
high-end job and it's not going to pay a lot."
If existing stores launching a site won't create new jobs, launching
a site where there was no store will. Headquartered in Baltimore, Mom.com
created new jobs when it launched in mid-December last year. The Web site
is dedicated to providing moms with information, entertainment and shopping
links.
Laurie Miller is the shopping channel editor at Mom.com. She says the response
they have had so far has motivated the site to begin work on an expanded shopping
area. "What we have there now is just links to our affiliates, but it does
get a lot of hits."
Miller says toy, video, book and clothing purchases are the top sellers.
She believes moms shop online because it is easy and convenient. "Their time
is better spent on the Web rather than running out to stores and throwing
the kids in the car. It's easy to shop when the kids are in bed or at
school. It's quick."
By listing a variety of shopping links in one area, Mom.com has created
its own cybermall where moms can link their way through a number of sites
from one main page. Everything from L.L. Bean to Mattel can be found on the
shopping channel. Miller says the site also accepts suggested links from its
readers.
"I don't think moms can replace the value of being able to shop online.
The barrier at first is the insecurity of putting their credit card number
online. But once you make one purchase, you realize it's fine. And after
getting over that first hurdle, it becomes so easy you can't help it."
Convenient toy shopping reached its peak over the Christmas holidays, according
to an article posted on the Network World Fusion site. Apparently the millions
of e-shoppers caused unanticipated huge stresses on toy store sites. Toysrus.com
even had a five- to 10-minute delay just to get on the site.
The article says other Internet shops like eToys and SmarterKids.com were
able to keep up with their high demands without slowing down to a crawl. "SmarterKids.com
claims to have spent hundreds of thousands of dollars on e-commerce extras
such as caching, load-balancing, monitoring and backup," the article notes.
Customer service and warehouse jobs might be what e-commerce creates. But
it will also provide work for a number of high-tech firms who have to address
technical concerns and problems as demand and usage increases.
Links
Mom.com
A site for moms of all ages
eToys.com
A wide range of products to choose from
Amazon.com
An online seller of books, toys and more
Consumer Protection Association of America
Promoting good customer service
The NPD Group
With background, press info and links
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