Toys Shopping for the 2022 Holiday Season – Will we Shop Early or Wait Until the Last Minute?

There is some speculation that the 2022 holiday season might start early this year. Why? There are a variety of reasons, as well as some wishful thinking.

Consumers might be planning ahead out of supply concerns and as well as expectations of rising prices, while retailers might engage in aggressive promotional campaigns earlier in the year due to excess inventory. And if there is any truth to the rumors, Amazon could very well end up running another Prime Day event early this fall.

Amazon Prime Day's Impact in the U.S. and Europe

In the U.S., Amazon Prime Day has a lot of impact on industry sales. In 2020, Amazon Prime Day took place in the last quarter (Q4) for the first time. The event and associated retailer promotions helped increase sales by 56% for the week (week of October 11-17), a gain of over $180 million! That week was also followed by five weeks of consecutive growth, indicating that Amazon Prime Day kick-started the holiday season.

In Europe, Amazon's Prime Day in 2020 saw a mixed bag of sales results for toys and the second COVID-19 wave might be an explanation for some of that. The UK had an increase in sales of only 4%, which was surprising to me given the fact that U.S. and UK consumers usually share similar shopping behaviors, while France and Germany experienced respective increases of 20% and 33%. While strong, those increases were off a very small base and were not a game changer for the industry.

It's All About Timing

NPD's U.S. toys industry analyst, Juli Lennett, has been saying that she believes the industry will see a jump-start to the 2022 holiday shopping season starting with Amazon Prime Day and, as a result, the industry should expect to see sales decline in the weeks between Thanksgiving and Christmas. She expects strong sales in week 51 (Dec. 17 - 24) where we have an extra shopping day for that week before Christmas. This year, Christmas Eve falls on a Saturday, which leads her to think that many consumers will either get Friday, Dec. 23, off as a holiday, or they will take the day off, delaying a lot of shopping until the last minute. This will be especially true for lower income households living paycheck to paycheck.

My opinion on the timing differs. The last time Christmas occurred on a Sunday was in 2016, when U.S. consumers purchased later in the fourth quarter. Back then, the week leading to Christmas (December 18-24) was the largest week of the year, up 28% in the U.S., but this came at the expense of total shopping visits and overall holiday spend. That's why I think there's a distinct possibility that an early Christmas season is unlikely to happen this year.

In the UK, 2016 and its season were very successful, and these last-minute sales in the week running up to Christmas might have been, in part, incremental. But this year the context is very different. I guess UK retailers are not feeling so upbeat to expect incremental sales, but they need to be prepared for a late surge in any case; and that late surge will be happening in-store as consumers don't take chances with late online deliveries during that week.

Elsewhere in Europe, we didn't see the same extraordinary sales peak during that very last week before Christmas, but it was critical, nonetheless. As we know, trends from previous years are a good indicator and I believe that we are likely to see industry sales increase 30%-50% year-over-year for that very week thanks to the extra Saturday on the calendar pretty much everywhere.

With all of this in mind, I guess I should put away the flip-flops and start my holiday shopping list.

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