Wal-Mart, Kmart Target Recession-Weary Toy Shoppers

By Ylan Q. Mui
Washington Post Staff Writer
Wednesday, September 30, 2009

Two major retailers are launching aggressive holiday toy campaigns as the industry gears up for the crucial shopping season.

Wal-Mart is expected to announce Wednesday that it will offer about 100 toys for $10 or less, expanding on a similar program that was successful last year. Meanwhile, Kmart unveiled its first list of 15 "hot toys" on Tuesday as it prepares to air commercials promoting its popular holiday layaway program.

The announcements come just two weeks after Toy R Us threw down the gauntlet by announcing that it will open about 80 temporary stores in malls across the country. Sears, whose parent company also owns Kmart, has installed toy departments in 20 stores in five major markets.

"I think they're all kind of planting the seed right now," said Jonathan Samet, publisher of trade publication the Toy Insider.

Though the holiday shopping season does not begin until after Thanksgiving for many consumers, retailers typically begin jingling the bells in October or earlier. Many were caught off guard last year by the deep downturn and stuck with pricey merchandise that had been ordered a year earlier, Samet said.

This year, the toy industry has had time to adjust to consumers' new frugality. Samet said his publication's annual list of the 20 hottest toys examined price as a serious consideration. Many of the products, such as the 12-inch Invincible Iron Man Action Figure, are under $30, he said.

"I still think that consumers are feeling the sting of last holiday," Samet said.

Wal-Mart said it is launching its toy campaign Wednesday because its research shows that 70 percent of toy shoppers begin browsing the shelves before Halloween. The company positioned itself well last year when it introduced 10 toys for $10 around the peak of the financial crisis.

This year, the behemoth retailer said it expanded the program to include 100 toys, some manufactured to meet that price and others simply discounted. For example, Wal-Mart said it created its own line of dolls called Little Dreams that can sell for $5 and $10. But it cut the price of the Play-Doh Burger Builder from about $15 to $10, said Laura Phillips, chief toy officer for Wal-Mart.

"We know that price matters," she said. "We also know that having what the kid wants matters."

Kmart is hoping to lure in shoppers with its first-ever list of 15 hot toys for the holiday season, which include the Littlest Pet Shop Adoption Center and the Bakugan Maxus 7-in-1 Dragonoid and range in price from $10.99 to $99.99. The list's release Tuesday was designed to accompany TV commercials encouraging shoppers to use layaway that will air throughout the holidays. Kmart reinstated layaway at its stores last year, and it became so popular that the retailer continued it.

"I think a lot of moms are doing the old-fashioned thing and planning and budgeting," said Julia Fitzgerald, Kmart's chief marketing officer for toys and seasonal products. "They really appreciate any tools we can give them . . . to delight the children and not break the bank."

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