Tech Industry

Strike out online? Get the hot toys at auction

Many Harry Potter toys are doing a disappearing act--along with other popular toys--at several major online retailers, forcing customers to look to online auctions.

Many Harry Potter toys are doing a disappearing act--along with other popular toys--at several major online retailers, forcing customers to look to online auctions to find the toys in time for Christmas.

Amazon.com, Walmart.com and KBToys.com said they have sold out of some of the season's most popular gifts, from Potter toys to Pixter electronic drawing devices, as well as some Lego and K'Nex building sets.

As in past years, shoppers turned away from online stores are clicking their way onto eBay and other online auctions. Not only are the toys available there, but research also shows customers aren't necessarily having to pay a premium.

On Tuesday, there were almost 300 eBay auctions listing the Pixter, a handheld electronic drawing device from Fisher-Price, which is sold out at both Amazon partner Toysrus.com and KBToys.com. Walmart.com had them in stock Tuesday but had been sold out earlier.

The Pixter sells for between $38.88 at Walmart.com and $49.99 at KBToys.com, but according to research group Strong Numbers, customers have bought about 100 Pixters at auctions in the last month for an average price of about $50.

People can also find Lego's Manas Bionicle, a remote-controlled robot, in good supply at reasonable prices on auction. Toysrus.com was sold out earlier in the week and on Tuesday had just one left in stock. But consumers have bought about 100 of the toys, which normally sell for $99.99 on Toysrus.com, for about $70 each on auction sites such as eBay over the last month, according to Strong Numbers.

The holiday season has often been a chaotic one for online retailers. Two years ago, Amazon took a multimillion-dollar inventory charge related to its efforts to stock up its toys and electronics stores for the holiday season. Meanwhile, the Federal Trade Commission filed charges against a number of e-tailers, including Toysrus.com, for not meeting shipping deadlines.

Last year's holiday season went more smoothly, but many toy e-tailers sold out of the hot toys long before this year's season ended. While some people have found the toys on auction sites for about the same price they're offered in stores, others haven't been so lucky.

Paying through the nose
Customers are paying a premium this year for the hottest of holiday gifts: Microsoft's new Xbox and Nintendo's rival GameCube video game consoles. Over the last month, people have bought some 6,000 Xbox and 5,000 GameCube consoles at various auction sites, paying an average of $362 for Xbox and $241 for the GameCube, according to Strong Numbers. That compares with retail prices of $299 and $199 for the Xbox and GameCube, respectively.

People are even paying extra for the PlayStation 2, which Sony released last year. On average, consumers are paying $321 for a PlayStation 2 console, about $22 more than the retail price, the research group found.

But even those prices are relative bargains compared with last year. With the red-hot PlayStation 2 in short supply then, many consumers bid up to three times the retail price on sites such as eBay for the game device.

Compared with past years, retailers do seem to be doing a better job of managing and meeting consumers' expectations this year, industry experts say. By teaming with offline partners or tapping into their parent companies, Amazon, Walmart.com and other online stores have been able to expand their supplies of the hottest toys. Although consumers may find that a store is out of a particular item on a particular day, if they return a day or week later, they are likely to find that the stores have restocked their shelves.

Walmart.com, for instance, was out of stock on Xboxes earlier this week, but it is again taking orders for the game system.

"There have been some items that will fly off the shelves, but we are doing our best to keep them in stock," company spokeswoman Cynthia Lin said.

Meanwhile, Amazon and Toysrus.com have been removing item listings when they no longer have the item in stock and don't expect to get it anymore.

"There are items that sell through so rapidly when we make them available that it very often can disappoint a consumer," said Toysrus.com spokeswoman Jeane Meyer. "We're managing expectations."

The economic downturn also has some shoppers watching their pocketbooks.

Slow to spend
"People are shopping around a little more," said Rob Leathern, an analyst with Jupiter Media Metrix. "Instead of necessarily running into the first site they find and trying to find the item there, people are willing to wait a week or two, and get it from a different vendor. They're less willing to pay premium prices, even for hot toys."

Retailers are feeling the pinch. Gap recently reported that sales were down 25 percent in November compared with the same month last year. Circuit City reported a decline in same-store sales of 4 percent for the third quarter.

Several surveys this holiday season have shown that while online sales are up overall from last year at this time, the rate of growth is leveling off. Online holiday retail and travel sales will reach $11.9 billion this season, up 11 percent from last year, the reports said. But in 2000 it was up 54 percent from the year before, and up 125 percent in 1999.

Gartner researchers had predicted $11.86 billion in sales in North America this holiday season and more than $25 billion worldwide. Last year, e-commerce holiday sales hit $9.1 billion, according to several researchers.

Forrester Research issued a more pessimistic warning Tuesday, predicting that online sales this holiday season will be flat at best and noted a "considerable drop" in toy sales online this November compared with last November

Part of that is because of recent moves by some retailers to offer special discounts at their brick-and-mortar stores over their online counterparts, said Carrie Johnson, an e-commerce analyst with Forrester Research.

"While I do think that toys would be one kind of good that is insulated from the economic downturn, the amount parents are willing to spend and the lengths they are willing to go to get the hot toys has decreased dramatically," Johnson said.

"If you can get an item for 30 percent off in a store, why would you even bother shopping online?"