Walmart U.S. CEO Greg Foran has made a bold prediction: toys will have their biggest holiday season in years.
Toymakers have finally learned how to make toys more interesting to kids: by stealing some of the thunder from the makers of electronics, whose products have commanded so much of kids’ attention in the last few holiday seasons.
Some toys Walmart (WMT) expects to do well this season include the Air Hogs Star Wars Millennium Flacon R/C Vehicle, the Disney Frozen Sing-A-Long Elsa Doll, and Fisher-Price’s Bright Beats Dance and Move Beatbo. Why? Because they integrate intricate electronics with the classic approach to toys.
“I think this department is probably going to be in for the biggest Christmas it has had in a long time. And we’re already starting to see it,” Foran told reporters on a tour this week of a Walmart in Secaucus, N.J. as he stopped in the toy section. “I think a lot of it is because of the electronic componentry now getting put into these toys, and they’re becoming interesting again for customers.”
While Walmart can expect aggressive competition from Amazon.com (AMZN), Target (TGT), and Toys R Us, the discount retailer will likely benefit from an industrywide bumper year for toys.
The NPD Group has said that in the first half of 215, U.S. toy industry sales rose 6.5%. And Juli Lennett, senior vice president of the U.S. toys division at NPD, fully expects that torrid pace to continue into the key holiday season, when about half of annual toy sales occur. In fact, 2015 looks to be one of the biggest years for toy sales in the last decade.
“Technology integrated into toys is bringing some of the older kids back into the toy market,” Lennett told Fortune.
While Foran has said he wants Walmart stores to look neater, he will allow the toy areas to overflow with merchandise for the eight-week holiday season rush. That is principally to avoid a backlog in stock rooms and allow more workers to be out on the sales floor helping customers rather than rushing back and forth to replenish the shelves.
Despite the anticipated bonanza, Foran expects competition on price to be tough this season. Last year, Walmart’s U.S. comparable sales rose only modestly during the holiday quarter, something the company wants to improve upon.
“We see customers using mobile phones, scanning items, and checking prices, trying to see whether we have the product on line, and probably checking some of our competitors online,” Foran said. “We’ve got to be really good at this.”
