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Walmart will get inventive and digital as he plans to buy toys on trip

Toys for sale at a Wal-Mart location in Burbank, California.

Patrick T. Fallon | Bloomberg | Getty Images

Before each holiday season, Walmart gathers hundreds of children at a convention center near its Arkansas headquarters. The young testers try out many toys and choose the ones that they want to get from Santa Claus. This shapes the retailer's list of top toys and determines which ones they order in abundance.

That year, the company sent toys to several dozen children to be tested at home instead. This is just one example of how the coronavirus pandemic changed the norms for the holiday season – even before it really started.

The retailer's preparations for shopping for toys on vacation look different this year, said Brad Bedwell, merchandising director for preschool toys and omni-merchandising. Walmart needed to find a workaround for its toy testing group to compile the list of the top rated toys. An online tool has been developed that allows children to practically unpack, test and play with toys, as the pandemic prevents multiple children from driving around the same truck or playing with the same doll in store aisles or during demos.

With Walmart Wonder Lab, kids can try out over 100 toys and guide virtual hands to interact with them. It's an enlarged version of a tool that the company had for the past two vacation seasons.

Bedwell said this year Walmart has shipped more toys to fulfillment centers as many customers assume they will buy them online.

Toys sold this Christmas season hit shelves in August to see how things went, he said.

This year's top-rated toys range from classic toys like Lego to outdoor toys like scooters and hoverboards to unique products like Squeakee, an interactive balloon dog from Moose Toys that makes sounds and does tricks and sells for $ 59.88. Unlike last Christmas season, there will also be a number of items associated with the popular Disney + show "The Mandalorian," including a Bop It! The game was designed to look like The Child by Hasbro and retails for $ 14.88.

Toy sales have increased during the pandemic – a trend retailers hope will continue into the holidays. According to the NPD Group, the percentage growth in toy sales compared to the previous year has been in double digits since March. They jumped 37% year over year, especially in May when parents bought outdoor items from swings to water toys.

Steph Wissink, executive director of Jefferies, said "Toys have seen a renaissance" as many families spend time playing board games, riding bikes and solving puzzles during the pandemic.

More of these issues were online. About 25% to 30% of all toy sales were online in the U.S. before the pandemic, she said. More than 50% of toy sales were online at peak times – and it could be 35% to 40% after the pandemic, she said.

This holiday season, some parents will find themselves in need of money during the recession. Others may see the many toys they bought on the living room floor or in the back yard during the pandemic.

However, Wissink said a vacation habit will remain: parents will want to make the season special.

"When you know someone who has kids, how often do you expect them to sit their child down and say, 'No presents under the Christmas tree because you got them in March,'" she said. "It doesn't happen."

Therefore, she expects the toy spending to look the same as last year.

Walmart is the leading toy retailer in the United States. The market share is 25%, followed by Amazon with 20% and Target with 15% to 20%. This is evident from data shared between the companies and Jefferies.

Bedwell said he thinks the novelty of the toy on the shelves will boost sales. In addition, parents would want to make their children happy – especially in unusual and stressful times.

"This is really a category that our customers enjoy and can deliver what makes it fun to stay at home," he said.

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