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Pricing Strategy Teardown: Toys and Games Niche

In our pricing strategy teardown series, we look at how e-commerce stores in popular industries navigate the topic of pricing.

We look at the strategies they implement, the tactics they use and how they stack up against their competition.

For this post, we’re going to look at the toys and games niche.

Now if you’re a parent, you’ll know how lucrative this industry can be.

Advertisers put a great deal of effort into making the next best toys.

The Amazon Problem

One of the biggest issues independent e-retailers will face with navigating a store in the toys and games industry is the fact they have to compete with Amazon.

As you know, Amazon is a behemoth in terms of size. There’s pretty much something for everyone on there.

For most people, it’s their go-to.

Amazon Toys and Games Categories

And if you consider the number of categories Amazon has within their parent toy category, there’s a lot.

So if you really want to succeed with your e-commerce store, you have two options:

  1. You try to differentiate your store and your products and compete with Amazon
  2. You join forces with Amazon and adopt a multichannel strategy selling on both your own independent store and Amazon. This can be a great idea to capitalise on the extreme amount of traffic Amazon secures each month

Kids are the target but parents are the spenders

The way you present your products is important for two reasons: you’re catering to two different audiences.

Parents and children.

The children are your target market. They’re the ones you need to get excited about your products.

But the parents? They’re the ones who spend the money. So you need to appeal equally to both sets.

In this scenario, you need to do it differently or do it better. In the next section, we’ll look at why marketing your toys is super important, as well as getting them in front of actual children.

You could try and create education fun toys that appeal to parents and while this might encourage an initial spike in sales, if the children don’t find them fun, you won’t have any repeat buyers.

Marketing trumps prices

If you’re not a parent, you probably won’t know this specific type of video even exists.

But if you are, and your children have access to Youtube, you’ve probably seen them watching one of the many toy unboxing videos.

There are entire Youtube channels dedicated to filming children opening toys and watching their reactions.

Toy Unboxing Video

Sounds crazy, huh?

Well just look at the views. This video received 157 million views of a child unboxing a PJ Masks Headquarters playset.

Now imagine if this was your product?

How much do you think your revenue would increase with 157m eyes on it?

The point we’re trying to get here is that you can (and should) charge a premium for your products, but you need to make sure your marketing is stellar.

In the toy and games industry, marketing always trumps price.

If there is a must-have product that all the children are talking about, parents are going to buy it.

Premium or rock bottom

One of the key things to think about your pricing is how people buy toys online. Really think about the process.

Now consider whether your products are premium priced or rock-bottom.

Although parents are keen for a discount online, having an entire store dedicated to rock-bottom prices in the toy niche tends not to do as well.

Simply because most people equate price with quality.

When products are priced too cheaply online, people are wary that the quality is bad. What’s more, there are plenty of brick and mortar bargain stores people can go to instead.

But how does price segmentation actually pan out? Let’s look further.

If we compare the cost of a “Disney Frozen Castle dollhouse, there is a certain degree of disparity.

Frozen Disney Castle


On Hamley’s, this product would cost £140.00

But on Amazon, it’s actually more expensive at £164.11.

Disney Frozen Castle Amazon

For some this might be surprising as Amazon is supposed to have the lowest prices, right?

But Amazon consistently changes their prices to match demand.

Amazon Frozen Castle Price Index

At its lowest point, in 2016, this product cost only £61.00 and it’s the highest point £179.99

That makes sense though because it was sold for the highest price around Christmas, a time where people are happy to pay a premium simply because they don’t want their children to wake up disappointed on one of their favourite days of the year.

What can we learn from this?

Well, it shows us if Amazon understands the need to switch and alter product’s prices, you should too.

They appreciate and value the fact that “new and cool” toys aren’t new and cool for long.

Keeping your products prices stagnant means you could plateau in terms of sales when the want for that specific toy dies down.

Becoming a helpful resource

One thing most parents can relate to is the idea of struggling to find the perfect toy for their own child or for a loved one.

The problem is, the child would like one specific toy, but they already have all of the ones available.

So what do you do?

We’ve already established that Amazon has a load of different categories within the toy niche, you can understand how it could quickly become overwhelming.

Smyths Toy Store has an online gift finder that helps parents and others buy the perfect gift for children.

Smyths Store Gift Finder

You can segment the gifts by age and the price you’re happy to pay.

Let’s say we want to buy a a toy for a 4-year-old and we’re happy to pay up to £70

Toy Search Online

We’re now presented with a number of options suitable for the price and age we preselected.

Product Category

However, there are still 187 results to go through.

Search Results

What Smyths could do is add more filters to their gift finder search engine to help segment customers even further.

This way potential customers don’t need to spend an age scrolling through endless products and are instead presented with a shortlist of the perfect products for them.

Final thought – how to sell toys online

There’s no denying that trying to succeed as an independent store in the toys and game niche is tricky.

Not only do you have to market to both children and parents, but you need to compete with the likes of Amazon too.

With that said, it’s not impossible.

Follow the strategies used by some of the greatest toy stores online and you’ll do well.

Do you market an e-commerce store in the toy sector? What strategies do you use? Leave a comment below.

If there is another industry or niche you’d like us to analyze, feel free to reach out!


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