Online Toy Market Continues Rise
Online toy sales catapulted from $45 million in 1998 to $425 million in 1999, according to a report by The NPD Group, Inc. and Media Metrix, which predicts $1.6 billion in online toy sales by 2002.
| Top Web Sites Dedicated to Toy Merchandising Only December 1999 |
|||
| Site | Monthly Unique Visitors (000) |
Percent Engaged |
% Making Repeat Visits (> 2 visits) |
|---|---|---|---|
| etoys.com | 5,836 | 61 | 32 |
| toysrus.com | 4,425 | 61 | 27 |
| kbkids.com | 2,689 | 56 | 30 |
| smarterkids.com | 2,405 | 32 | 26 |
| toysmart.com | 1,805 | 42 | 15 |
| toytime.com | 1,665 | 61 | 32 |
| ty.com | 1,171 | 64 | 35 |
| gamestolearn.com | 1,124 | 14 | 23 |
| zanybrainy.com | 949 | 54 | 22 |
| wishbook.com | 807 | 52 | 9 |
| Total Toy-Only Sites | 13,728 | 61 | 32 |
| Source: Media Metrix | |||
Online toy sales catapulted from $45 million in 1998 to $425 million in 1999, according to a report by The NPD Group, Inc. and Media Metrix, which predicts $1.6 billion in online toy sales by 2002.
According to NPD, online sales accounted for 2 percent of all 1999 toy sales, which totaled $23 billion. Dollar sales in the overall toy industry grew 8.6 percent over 1998, about a $2 billion increase for the year.
NPD also found that consumer attitudes toward online toy shopping seem to positive, despite well-publicized outages and slowdowns during the December shopping crunch. More than 95 percent of consumers were satisfied, if not extremely happy, with their experience during the 1999 holiday season, and they would buy online in the future, NPD found.
Toy e-tailers appear to have overcome many of consumers’ barriers to purchasing toys online. In an NPD survey conducted in September of 1999, 55 percent of respondents said a reason for deciding not to purchase online was an unwillingness to pay shipping costs. By January 2000, that number had dropped 23 points, to 32 percent of respondents.
Consumers’ desire to see in person the intended purchase item was a reason not to purchase toys online for 46 percent of respondents in September and for only 29 percent in January. This shift may be attributed to marketers’ increased attention to providing comprehensive product information.
| Top Web Sites Selling Toys Share of Past Six Months’ Purchase Occasion Ranked by January 2000 |
||
| Site | January 2000 (% Share) | September 1999 (% Share) |
|---|---|---|
| amazon.com | 26 | 18 |
| etoys.com | 19 | 23 | toysrus.com | 12 | 9 | kbkids.com | 10 | 10 | smarterkids.com | 7 | 8 | toysmart.com | 2 | 2 | wal-mart.com | 2 | 3 | toytime.com | 2 | 1 | ebworld.com | 1 | NA | lego.com | 1 | 1 |
| Source: NPD Online Research | ||
Online return policies, which 25 percent of respondents cited as a reason for not buying toys online in September, were cited by half that number of consumers in January, a change that may be linked to an increase in click-and-mortar retailers permitting returns to physical stores.
“We’ve seen consumers’ confidence in e-commerce grow over the past year, much to toy e-tailers’ good fortune,” said Michael Redmond of NPD’s Toy Division. “In 2000 and beyond, they’ll have to continue to address technical issues and maneuverability in order to support all of the customers they attracted during last year’s holiday shopping season. Consumers want speed and convenience. Those will be the big concerns going forward.”
The online toy category had 13.7 million unique visitors to dedicated toy merchandising sites in December of 1999, up from 7.6 million in December 1998. Media Metrix ranked etoys.com, toysrus.com, and kbkids.com as the three most frequently visited sites dedicated only to toy merchandising in December 1999. Etoys.com’s 5.8 million visitors, 59 percent of whom were engaged visitors, helped the site claim the top spot based on December traffic. Media Metrix defines an “engaged” shopper as one who views at least three minutes of content within a site. According to Media Metrix, engaged visitors are the precursor to online sales.
Of all sites marketing toys online, not just those only dedicated to toy sales, January 2000 NPD Online Research data show Amazon.com, etoys.com, and toysrus.com garnering the largest share of purchases.
The top online toy merchandisers are poised for continued success, indicated by consumers’ future intent to purchase toys through these sites. Of January 2000 survey respondents who had purchased toys in the past six months and intended to purchase toys online in the future, 26 percent said they would choose Amazon.com. Eighteen percent said they would choose etoys.com, followed by toysrus.com with 11 percent, and kbkids.com with 7 percent. Wal-Mart.com came in fifth with 6 percent share of future planned purchases.
More E-Commerce Market Reports from NPD and Media Metrix:
