Christmas 2009 – A prediction

I am going to predict that consumers are going to be aggressively looking for toys this Christmas. Here’s why:

Video game sales are off…way off. In fact, in Japan they were off 18% last 4^th quarter. Japan is a leading indicator for the rest of the world in terms of video game sales so I think we can look for an equally strong downturn here.

Video game sales cannibalize toy sales. As I have stated before: I believe video game sales hurt the toy industry last 4^th quarter far more than the recession. Those dollars that poured into Wii and other systems will be available for buying traditional toys. 

Consumer confidence is on the up tick despite continuing unemployment and some unresolved concerns regarding some of our major financial and corporate institutions. This means that shoppers will be ready to start buying again and toys, being feel good products that are relatively inexpensive, will be a prime purchase.

The only fly in the ointment will be the self-fulfilling prophecy that results from unfilled store shelves. Sales reps tell me that orders from retailers are coming in small this year. This, of course, results from cautious and maybe overly cautious buying. As a result, those shoppers with a strong desire to buy may not find products to purchase.

I don’t blame retailers for being careful but stakeholders (and that includes shoppers) may not feel too happy if being too cautious means lost sales and unhappy children come Christmas morning.