Pop-culture profiteers

To land hot holiday toys, some parents pay premiums to online hoarders, the latest players in the marketing game.

Jamie Fett fondly remembers the sales clerk who let her in on the big secret of the holiday shopping season: where the hot toys are.

While at a Toys "R" Us in Flint, Mich., last month, she was pulled aside by the clerk, who whispered, "You've got to go to eBay," referring to the Internet-auction website.

Ms. Fett, a homemaker in Owosso, followed the advice, went home to her computer, and scanned eBay's list of toys up for bid.

She hoped to find listings for a few dozen or so FurReal Friends, animatronic cats that toymaker Hasbro says look and move like real cats. But what she found looked like a robotic-kitty invasion. More than 5,000 FurReal Friends were up for bid that day, with an auction ending about every five minutes.

The bids ranged from $40 to $100. (They list for about $35 in stores.) Several sellers were auctioning more than 50 cats each.

After losing one auction, Fett raised her bid to $75 and won. Like many parents during the holidays, she was desperate to buy for her child the toy that everyone in America seemed to want.

"It's the only thing that she had asked for for Christmas," says Fett. "If anyone asked her what Santa was going to bring her for Christmas, she said, 'A cat with a brush.' " For more and more Americans, eBay has become a reliable, if expensive, final shopping option. Those willing to pay top dollar for a toy are almost guaranteed a fighting chance on the auction site, a fact for which many parents are grateful.

But the auction site's success has caused others to take a critical look at America's culture of toy giving. Enabling eBay's success around the holidays, they say, is the toy industry's growing practice of whipping consumers into a frenzy over a handful of toys, while failing to create enough for everyone to buy.

And parents who experience the imbalance firsthand are not happy.

"We got the fliers about FurReal Friends over Thanksgiving weekend, and by Dec. 5 they were sold out," says Fett. "The first people I'm angry with are the manufacturers."

For sellers, predicting which toys will sell well for the holidays has become easier.

"EBay has become a little bit of a barometer of hot toys," says Eric Johnson, professor of management at Dartmouth College in Hanover, N.H.

A speculator's tale

Bill Lam of Vancouver, British Columbia, searched eBay in early November to learn which toys were selling at a premium. When he saw that FurReal Friends went for about twice their retail price, he went to a local store and bought a few cats - 12, eventually.

Mr. Lam, a restaurant manager, says he then resold them online for about $50 each. Despite paying above retail, his customers expressed tremendous relief, Lam says. "One said that it made her Christmas."

Independent collectors have speculated and hoarded hot toys for decades, but Lam and the hundreds of other eBay vendors who are reselling hot toys this year are making a much bigger dent in the marketplace.

"These speculators have taken it to a new level, and can make it harder to find a toy in any given area," says Professor Johnson.

Their task is made easier by the toy industry's practice of promoting toys about eight months before they reach store shelves. At the first major toy conference of the year held every February, toymakers and retailers offer predictions of what the top holiday sellers will be.

By early fall, they have published dozens of "hot toy" lists that, along with television advertising, focus the public's attention on a handful of toys.

"Many lists are published by retailers with a self-interest or by magazines who promote their own advertisers," says Sean McGowan, a toy-industry analyst with Gerard Klauer Mattison, a New York investment firm.

Several eBay vendors began buying up hot toys in October after the website e-mailed them its list of anticipated top sellers.

The early marketing makes toy speculating easy, observers say. "To a large extent, advertising creates what's hot, and if something is hot everyone will want it," says Stevanne Auerbach, a child psychologist and toy expert in San Francisco.

While toymakers stoke demand during the summer and fall, they must hope that the estimates they made in February of how many toys to manufacture were accurate. They often are not, say experts.

"They make projections of sales. They have to decide what the run is going to be and how long the fad is going to last," says Eugene Fram, a marketing professor at the Rochester (N.Y.) Institute of Technology. "A lot can change in a year."

Because most toys are made in Asia, and require months for shipping, toymakers have little time to react if it looks like the public's demand will exceed supply. This fall, shipping snarls at West Coast ports caused added complications.

Such situations can easily be taken advantage of by eBay speculators. And the frequency of such incidents have become more numerous, say experts, as toy retailers, worried about being saddled with a flop, shave their inventories.

Shortages' silver lining

Yet toymakers are not entirely dissatisfied by their inability to meet customer demand. "It may not be such a bad thing for consumers to be fighting in the aisles for a company's toy," says Johnson. "Nothing can be cool if it's readily available."

Well-publicized shortages of popular toys, like Tickle Me Elmo in 1996, help give toys what marketers call "share of mind."

"These incidents get consumers to think about your product. When they see it, they recognize it, and are ready to buy it," says Mr. Fram.

If a true shortage does not exist, marketers will sometimes try to give the impression of one. "There are ways to create the illusion of a shortage that is part of the playbook of a hot toy," says Johnson.

By holding back a little bit of their product, toymakers aim to sustain consumers' interest in their product beyond one holiday season.

Experts say Hasbro truly did underestimate the popularity of FurReal Friends. But they say the company will benefit, over the long run, from current shortages.

"They'll probably try selling dogs next year, or smaller cats," says Mr. McGowan. "They'll be able to convince the retailer that there's still demand" for the genre.

The influence of marketing behind a handful of popular toys is difficult for children and parents to escape. And parents today may feel even greater pressure to fulfill their children's expectations for one of these toys, say experts, given that parents are spending less time with their children.

"This is one of the things you can deliver for your child," says Dan Cook, an advertising professor at the University of Illinois, Urbana-Champaign.

"If you're a parent, you want to deliver the goods and make a bond [using] the gift."

Relishing the hunt

But some experts also believe that parents are not simply reluctant participants in the hunt for the hot toy.

In his 1972 article "Why do people shop?", consumer psychologist Edward Tauber found that "status and authority" are key motives for consumers to buy certain products.

During the holiday season, in a hypercompetitive atmosphere of toy buying, "status and authority" become even more significant motivations. "So many people are looking so hard to find that one thing, that their feeling of power increases when they find it," says Barbara Stewart, a marketing professor at the University of Houston.

In 1986, for example, a significant number of adults bought Cabbage Patch Dolls for themselves because the toy had become a symbol of wealth and status. "You had to know somebody to get them. They became like a hot concert ticket," says McGowan.

The "treasure hunt" for a present, according to some experts, actually fulfills some parents' need to feel that they went to great lengths to satisfy their children's holiday wish.

"There is a sense that people want Christmas to be a little bit difficult," says Thomas Hine, author of "I Want That! How We All Became Shoppers." "[Parents] want to feel like they've made a sacrifice for their children."

They also may enjoy - to a greater degree than they let on - competing with their fellow consumers for a few select toys. For many shoppers, eBay presents a convenient forum for that challenge.

"What people are looking for is an opportunity to do better, to beat the system," says Mr. Hine.

"It's pleasure in the hunt," he adds. "But eBay also makes it easier than driving from mall to mall."

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