Feb 8, 2020 - Economy & Business

The great American toy slump

Photo: Axel Heimken/picture alliance/Getty Images

Americans are buying fewer toys in the post-Toys "R" Us era.

The big picture: As we've reported, the demise of the toy giant kicked off a war among U.S. retail titans Amazon, Target and Walmart to vacuum up its toy sales. But the end of Toys "R" Us dealt the multibillion-dollar American toy market a blow that it still hasn't recovered from.

  • Target and Walmart both added floor space for toys. And Target partnered with Disney to sell exclusive products in its stores.
  • Amazon attempted to dominate the online sale of toys. Its products topped 95% of online search results for toys in 2019, according to the research firm Gartner L2.

But all that wasn't enough to revive the toy market.

  • Toy sales fell 4% between 2018 and 2019, according to research from the NPD Group, cited by Retail Dive.
  • American retailers also sold fewer toys during the 2019 holiday season. That might be partially explained by the fact that last year's peak holiday shopping season — the weeks between Thanksgiving and Christmas — was unusually short, per NPD.

The bottom line: The American toy industry is likely to eventually bounce back, but it's a testament to the ubiquitousness of Toys "R" Us that it has temporarily dragged down the entire market.

Go deeper: The Toys "R" Us blame game

Go deeper

Walmart fumbles in the battle for wealthy shoppers

Illustration: Sarah Grillo/Axios

Walmart’s expensive attempt to woo wealthy shoppers is ending in failure.

Driving the news: Jetblack, Walmart’s personal shopping startup, is closing its doors, per WSJ. The service, which charged members $600 a year for a personal shopper whom they could text to get anything delivered — except fresh food — was costing the company thousands of dollars because it just never gained much popularity.

Why Amazon's bigger Go grocery stores matter

An Amazon Go store in Seattle. Photo: David Ryder/Getty Images

With the opening of its first large-format cashier-less grocery store in Seattle on Tuesday, Amazon is on its way to further expanding its physical footprint across U.S. cities.

The big picture: Amazon’s 2017 purchase of Whole Foods was never the end of its grocery ambitions — or its fight to win a bigger share of the whopping $700 billion per year American grocery industry. With its own network of stores, Amazon could attract shoppers looking for cheaper prices than Whole Foods and dramatically grow its brick-and-mortar reach.

Walmart tests rival to Amazon Prime

Photo: Joe Raedle/Getty Images

Walmart plans to start publicly testing its new membership program called Walmart+ next month in hopes of competing with Amazon Prime, Recode's Jason Del Rey scoops.

Why it matters: The paid membership program "would include perks that Amazon can’t replicate, in part to avoid a direct comparison to Prime."