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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.

College Foundation of West Virginia (CFWV)

College for West Virginia (CFWV)

The Online Toy Market is Big Business

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