Amazon's Entry Into Canadian Toys Sales Shaking Up A Weakening Category

Canadian e-tailers—or, more precisely, American e-tailers' dedicated Canadian operations—are making a major push in toys. This is happening even though sale of traditional toys—the ones you get to trip over in the living room—are falling as children turn to digital alternatives at an earlier age.

The latest move came Thursday (June 27) when Amazon.ca (NASDAQ:AMZN)  launched a new toys and games e-commerce site. Walmart Canada only started pushing online two years ago , with Toys "R" Us Canada the Canadian e-tail veteran, reports The Toronto Globe And Mail.

Overall Canadian e-commerce sales are expected to pick up by 14.2 percent to $24.25 billion this year, almost the same as last year's 14.3 percent gain and up from a 12 percent rise in 2011, according to researcher eMarketer.

Toys has historically been a category with many unusual characteristics. For example, it's a segment where a very high percentage of purchases are gifts and it's one where age recommendations are more critical than in almost any other category (books being the only other one that's close). Given that so many of the purchases are gifts being given by people who may not have an expert sense of what that child has and wants, online recommendation engines are crucial.

A related fact of the toys category is that the needs change predictably and reliably. Even a parent may appreciate the recommendations for a 5-year-old, especially if they are a first-time parent (who has no experience raising a child of this new age).

Also, specialized toy parts make the extensive inventory possible in online very effective. With so many niche products such as toy train parts, "it's a good example of where online sales can trump bricks and mortar sales," said eMarketer vice president Clark Fredricksen. "The breadth of products available online gives that category an edge." Amazon.ca's new toy site, for example, claims to carry 300,000 toys.

For more:
- See Toronto Globe And Mail story

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