The holiday season will be here before you know it, and with that comes a frenzied time of year for the toy industry. Parents will be looking for toys in stores; stores will be getting stocked up in preparation. Toy manufacturers, likewise, are stepping up their game. This year, though, there’s one key missing link in that supply chain: with Toys ‘R’ Us poised to go out of business in 2018, it will be tougher for the industry as a whole to deliver the Christmas loot kids are anticipating.
After Toys ‘R’ Us announced earlier this year that it was folding, other retailers quickly scrambled to fill the void they left open, particularly with the holiday season in mind. Walmart and Target, for example, prepared additional floor space in their stores for the extra toys they’d be able to sell. But as Fortune magazine reported, stores everywhere are struggling to adjust to the new industry landscape. With the end of the year rapidly approaching, it will be tough for the retail sector to iron out all the wrinkles.
“This year, more than ever, getting the right toys in the right stores at the right quantities at the right time is going to be the game,” said Steve Totzke, chief commercial officer at Mattel. “The companies that do it best—the manufacturers and retailers—are going to win the season.”
In 2017, when Toys ‘R’ Us was still trying to stay above water, it used an inventive strategy of holding back certain products until December, then selling them at a higher price once competitors had run out of stock. This helped Toys ‘R’ Us bring in $2 billion in total sales between November and December. This year, though, the once-iconic toy brand is definitively dying out, which means an unprecedentedly open market.
Separately, retailers this holiday season are worrying about another potential hiccup unique to 2018: the ongoing trade war between the White House and China. Fortune noted that 85 percent of all toys sold in the United States were originally made in China, which means that a fresh round of tariffs could end up having a huge ripple effect on the toy market.
“This could not come at a less opportune time for our industry,” said Rebecca Mond, vice president of governmental affairs for the Toy Association.
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