Seasonality of the Toy Industry

Author: Carrie Hood

The key selling periods for toy companies are: December, Easter then Back-To-School. One way to advertise the toy products is with “roto ads.” When you read the Sunday newspaper, such as the Los Angeles Times, you will find a plethora of ads from various retailers, such as Target, Kohl’s, Kmart and Macy’s. These ads are called “roto ads”.

During the holiday season, you will see more roto ads from Wal*Mart, Target, Toys-R-Us and Kohl’s featuring their toys on sales. The 4^th quarter (October, November and December) is a key selling period for toy companies because of the holidays in December (Christmas, Hanukkah, Kwanzaa, etc.). Toy companies are able to sell their higher-priced items during the holiday season because this is more of a gift-giving time of year.

Most of these retailers end their fiscal year in January. They sell-through their holiday inventory in December and January and start the new fiscal year in February. Retailers do not like to mark down their inventory because it lowers their gross margin and overall profit.

Another key selling period for toy companies is Easter. Easter usually occurs in March or April. Some of the toy companies run the same type of promotion during the same week as the previous year. This way, you are able to compare the sales from the previous year vs. current year. Easter is a good time to take advantage of the in-store foot traffic of people shopping for Easter baskets, Easter candy and outfits for Easter Sunday. Toys sold during the spring season (February, March, April) tend to be less expensive than toys sold during the fall season (holiday season) because people do not want to spend a lot of money on toys.

Back-To-School draws families and their children into the stores. Some people start shopping for school-related items in July and August. Toy companies will sometimes run a promotion during these months and call it a Back-To-School Special.

The next time you read the Sunday newspaper, take a look at the roto ads from the different retailers. Notice how the toy items that are advertised change in price and selection depending on the time of year.

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