This holiday season, stocking stuffers are becoming the main event, as big box stores such as Target and Walmart highlight the affordability of their holiday toy assortment, touting the number of items below $20 and $25 respectively.
“We recognize affordability is top of mind for many consumers this year, so we’re committed to delivering exceptional value,” Target spokesperson Emily Mackessy told Retail Brew via email. “This year, we intentionally increased our toy assortment to offer thousands of toys this holiday season with over half priced under $20.”
Walmart, meanwhile, said 25 of the 66 items featured in its 2024 Top Toys List are priced below $25. Items on the list range from $2.88 for select items from the Barbie Mini BarbieLand Collection to $24.97 for a 12-inch Wicked doll or a Creativity for Kids Grow N Glow Terrarium.
The pivot to cheaper toys has been in the works for the last year or two, James Zahn, editor-in-chief of The Toy Book, told Retail Brew. But it “hit a peak” this season, he said, as toy makers and retailers aligned around providing low-cost options to budget-conscious consumers.
Setting the agenda: Indeed, these cheap toys aren’t coming out of nowhere. Toy makers are responding directly to feedback from retailers, and churning out lower-cost toys to meet their needs.
“Consumers’ budgets are stretched. They demand better value and lower prices,” Isaac Larian, founder and CEO of MGA Entertainment—maker of Bratz, Pixel Petz, and Little Tikes—told Retail Brew via email. “In this regard, we work hand in hand with the retailers to ensure our toys are accessible to the widest possible audience.”
Retailers also influence how toys are developed and made: “Retailers’ priorities do play a role in how MGA develops, manufactures, and packages its products,” Larian added. He also noted that MGA also does its own research into consumer habits, which it shares with retail partners. to “determine the best possible holiday assortment.”
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MGA doubled the number of toys from last year that are priced below $15.
Mattel CFO Anthony DiSilvestro acknowledged this trend in the toy giant’s Q3 earnings call: “We know that price is important to many of those consumers, and I think we are well-positioned in that regard, and we offer quite a range of price points.”
Volume over price: The embrace of affordability extends to industry-watchers such as The Toy Insider. More than 75% of items in the news outlet’s holiday gift guide cost under $50, and 175 items cost under $25.
“The two sweet spots that are very important this season are under $10 and under $20,” Zahn said. “There’s certainly an endless assortment of more expensive toys out there with higher price points, but this price conscious consumer is really looking for a lot of bang for their buck.”
Retailers such as Target have always stocked some low-cost toys in bargain bins or on back walls, he added, viewing them more as stocking stuffers. But there has been a shift in mentality since discounters such as Five Below have “carved a niche of being trendy with hot new products that are affordable, but they don't look cheap.”
He said a good example of this is Mattel’s Barbie Mini Dolls. Sold at a lower price point than a regular Barbie, it’s easier for shoppers to buy and collect multiple dolls and accessories. “One character is great, but they really need an assortment to have that storytelling opportunity, to get that imaginative play,” he said.
This focus on cost, however, doesn’t undermine the need for quality and innovation, according to Larian. “To combat rising inflation, the toy industry needs consistent innovation and newness at an affordable price,” he said. “Parents and gift givers prioritize great toys over other expenses, cutting back from other areas to make sure kids have a gift under the tree on Christmas morning.”