Wal-Mart unveils exclusive toy list for holiday 2016, layaway begins Sept. 2

With just 115 days until Christmas, retail giant Wal-Mart Stores said it’s ready, set, go at its stores and online for hundreds of kid-approved gifts and several big exclusive deals it made with toy suppliers for 2016.

Anne Marie Kehoe, vice president of toys at Walmart U.S., held a press conference for the media Wednesday (Aug. 31) to discuss the retailer’s toy line up for the 2016 holiday season.

“Santa may know who is naughty and nice, but we know what’s on their list,” Kehoe said. “Santa’s workshop is hard to compete with, but we are confident our assortment hits the mark with kids of all ages.”

She said the retailer began using kids to test toys and pick their favorites a few years ago and while the kids don’t always pick the best sellers, they do pick more winners than losers and they also chose toys that the buying team may have overlooked. The complete Chosen by Kids Toy List can be found online.

“Children are, after all, toy experts,” she said

Kehoe said she is excited this year about several exclusive toy deals made with suppliers. She said where the retailer saw gaps in the market they worked with suppliers to develope toys they hope will resonate with children. Two products that fit the total exclusivity niche include a life size Disney princess carriage and a Superman versus Batman play set that features the Dawn of Justice Batcave. For the young entrepreneur there is also a My Life As a Food Truck toy exclusive coming to Walmart’s toy aisle.

Kehoe said if children want those items they will have buy them at Walmart, because no other retailer will have them. This year she said Walmart will have about 400 toy exclusives, six of which made the Chosen by Kids list.

In the highly competitive toy industry exclusives are one way Walmart, the nation’s largest toy store, can have a leg up on the competition. NPD reports that the U.S. toy market grew to $19.48 billion last year, with the majority of the 7% growth occurring in the holiday period.

Most toy categories showed year-over-year improvement with the exception of youth electronics and arts and crafts. Games and puzzles grew sales by 11%, while toy vehicle sales improve 10% from the prior year.  Building sets, dolls and outdoor/ sport toys also increased sales by 9%. Plush and preschool toy sales were up 2% and 6%, respectively.

The Walmart U.S. segment had net sales of $298.4 billion, and toys comprised about 4.5% of the retailer’s total annual sales, a business worth an estimated $13.4 billion according to industry analysts. It’s a category Walmart needs to grow.

EXCLUSIVE PLAY
“Exclusives definitely still plays a role in retail both on the product and brand side. At a time when consumers can hunt down and compare prices on like items at the click of a mouse, exclusives can be the only point of difference and a hedge against price wars,” said Carol Spieckerman, CEO of Spieckerman Retail.

She said this is true in a category like toys that is still dominated by ubiquitous major brands for the most part. Shoppers are also looking for criteria that will drive choice in a sea of options so the kid-tested and kid-chosen differentiators help that process along. Spieckerman said Walmart does a good job with exclusives but the competition is also playing that hand.

“Toys R Us has traditionally relied on exclusives, particularly during the holiday shopping season and Target made a bold move awhile back when it created its own toy lines and began to lean into toys provided by boutique providers,” she said.

Spieckerman said in more recent years It is less common – and arguably unwise – for brands to offer full-spectrum, long-term exclusives to a single retailer. From the supplier’s perspective she said there are too many options for expansion including e-commerce and direct to customer sales. In her opinion locking up a given brand with a single customer doesn’t make as much sense as it did years ago.

HOLIDAY LAYAWAY
Another issue for Walmart toy merchants is ensuring they buy enough of the toys that will be in hot demand because there will be shoppers on Christmas Eve looking for the perfect toy to surprise a child at home. To help shoppers get a jump on their holiday buying Walmart is opening its holiday layaway to the public on Sept. 2.

Kehoe said the holiday layaway has been popular with consumers and they are opening it early again this year because so many customers took advantage of the service in 2015. The program requires a $10 or 10% downpayment with final payment due by Dec. 12. She said there are more than 40,000 items in the store available for layaway. Online orders are not available for the layaway program.

Spieckerman said if Walmart is going to put a stake in the ground on layaway, it makes sense to get started early.

“Doing so will encourage sales of high-ticket items and potentially drive additional sales and encourage layaway customers to check more off of their lists when they visit Walmart stores. The administration of layaway programs isn’t for the faint of heart but Walmart no doubt has it down to a science at this point,” she added.

Kehoe said while many may think it’s a long time until Christmas, the early layaway gives families on a tight budget more time to pay their purchases.