“The Amazon Effect” series breaks down specific product groups,

compares Amazon’s performance in that category to total retail sales

(online and offline) and considers the effect Amazon has on that

specific industry as a whole. The first in our new series explored the

effect Amazon is having on the Grocery industry; in our latest, we

explore how Amazon has impacted the U.S. Toys market.

Toys: The Amazon EffectBy Nathan Rigby, VP Sales & Marketing at One Click Retail

In the lead-up to the holidays, it was neither a secret nor a surprise that

Amazon dominated online shopping. The question is how much of a ripple

effect Amazon’s peerless success in eCommerce is having in the brick-and-

mortar world? The short answer is quite a significant one. To understand

the scope of Amazon’s impact on the U.S. Toys market, we need to

consider how Amazon’s sales stack up against the entire industry, both

online and in-store. Let’s take a look.

*Updated January 26, 2017

Amazon Sales vs. the Entire Industry

• $20.4 billion: The total value of the U.S. Toys market (2016).

• $4 billion: Amazon’s total 2016 Toy sales (2016).

• 5%: The YoY growth of the U.S. Toys market (2016 vs 2015).

• 24%: The YoY growth of Amazon’s Toy sales (2016 vs 2015).

According to figures released by the Toy Industry

Association, sales grew by 5% YoY over 2015,

bringing the 2016 U.S. Toys market value to $20.4

billion.

Based on these figures, Amazon’s share of the entire U.S.

domestic Toys market reached a whopping 20% in 2016, an

impressive number for any retailer let alone an online-only

marketplace. As the clear industry leader, it’s no surprise

that of the top 5 performing Toy categories, 3 have made it

into Amazon’s top 5 as well.

The differences in rankings tell us something about consumer habits.

The top 2 Toy sub-categories on Amazon were Building Blocks and

Board Games, categories where consumers tend to be looking for

something specific and the products typically come in a sealed

rectangular box. Meanwhile Dolls and Action Figures performed better

in stores, as those are products consumers are more likely to want to

pick up and examine prior to purchase.

Top 5: Total Market vs. Amazon

Building Blocks are consistently Amazon’s top seller, with nearly double the

sales of the next closest category each month in 2015 and 2016. LEGO leads

the category and is overall one of Amazon’s strongest and best performing

brands, with the ability to leverage its “infinite shelf” of product possibilities

(nearly 30,000 active SKUs on Amazon.com!). Similarly, Board

Games consistently ranks in the #2 spot, since consumers typically know

exactly what they’re looking for in this category and since it’s challenging for

brick-and-mortar stores to keep a steady stock of the most popular board

games, especially during the holidays.

1. Cozmo ($12.5M+)

2. Anki Overdrive Starter Kit ($9M+)

3. LEGO Star Wars Millennium Falcon

75105 Building Kit ($6.5M+)

4. LEGO Mindstorms EV3 31313

($5.5M+)

5. Hasbro Pie Face Game ($5.5M+)

Amazon.com Top 10 Toys in 2016

6. Osmo Genius Kit ($5.5M+)

7. Watch Ya’ Mouth Family Edition

($5M+)

8. Little Tikes Jump n’ Slide Bouncer

($4.5M+)

9. Little Tikes 3′ Trampoline ($4.5M+)

10. Catan 5th Edition ($4M+)

In fact, many toy developers and inventors see Amazon as the only

place to bring their products to market, which is especially

challenging for toys that need to be physically handled to capture

a child’s imagination. On Amazon, toy manufacturers are often

limited to selling to the parent, as the child is rarely the one

shopping.

The Sole Growth Spot for the Industry

While Toy sales are thriving on Amazon, showing 24% growth YoY,

former industry leaders like Toys ‘R’ Us and FAO Schwarz are shuttering

their flagship stores in New York City. Even department stores like Macy’s

and Kohl’s saw an unprecedented 2.1% drop in sales during the holiday

shopping season. Most of those sales seem to have gone online, with

department store classifications Apparel, Beauty and Health and

Personal Care all growing by more than 30% on Amazon during that

period.

The holiday season makes or breaks toys. While having a bad month

can, in most industries, be made up in subsequent months, a toy

manufacturer who has a bad holiday season has to wait a whole year

before they’re given another chance. In 2016, more than half of all U.S.

toy sales took place in the last 3 months of the year. On Amazon in

2016, more than a third took place in December alone, with the majority

of those going to first-party (1P) brands.

The trend is clear. While in past years brick-and-mortar stores experienced a

rush in the last week or two before Christmas, this year’s sales took a

downturn over that period. Consumers are increasingly turning to Amazon as

they become more comfortable doing their holiday shopping to

accommodate delivery times, saving themselves the headache of last-minute

trips to the mall. In-store holiday shopping is nearly flat-lining while, as toy

developers have said, Amazon is the sole growth spot for the industry.

Consumers are Increasingly Turning to Amazon

With 98% accuracy, OCR delivers the industry’s most accurate sales data to their brand

manufacturer clients selling on the world’s top eCommerce platforms. To get a glimpse of the

unique insights One Click Retail provides its customers, be sure to follow our weekly blog at

www.oneclickretail.com/insights, and following us on Twitter and LinkedIn.

One Click Retail (OCR) is a market leader in eCommerce data measurement, sales analytics and search optimization for brand manufacturers in North America, Europe and Asia. Thanks to our proprietary sales calculations that are 98.5% accurate down to the SKU level, OCR’s accuracy is unrivaled in the marketplace. The OCR Product Suite provides 1st and 3rd party business intelligence across the 30 largest retailers such as Amazon, Walmart, Target, Staples and Home Depot. The world’s top brands, such as Procter & Gamble, Panasonic, Nestle, Hamilton Beach and HP, rely on OCR insights to drive sales and profitability across eCommerce.

Founded in 2013 by eCommerce experts from Amazon, Walmart, Target, Overstock and other leading retailers, OCR was acquired in 2016 by Ascential plc (LSE: ASCL.L), a UK-based international B2B media company with a focused portfolio of market-leading events and information services products.

To learn more about how OCR can provide your brand with the competitive edge in today’s ecommerce marketplace, visit www.oneclickretail.com.

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