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Toy e-commerce to jump 268% from last year: Toysrus.com gains ground over rivals

While total on-line `98 toy sales were pegged at US$68 million, at press time, sales projections for `99 show that toy e-commerce will top the US$250-million threshold, according to Jennifer Lee, a research associate at Cambridge, Massachusetts-based e-com research firm Forrester...
January 1, 2000

While total on-line `98 toy sales were pegged at US$68 million, at press time, sales projections for `99 show that toy e-commerce will top the US$250-million threshold, according to Jennifer Lee, a research associate at Cambridge, Massachusetts-based e-com research firm Forrester Research.

Not lost in all the toy e-tail euphoria was the emergence of toysrus.com from cyberspace obscurity. Despite a turbulent year, which included numerous service glitches and a newly implanted CEO jumping ship, the embattled dot.com managed to draw more traffic than its archrival eToys. According to Web tracker Media Metrix, for the week ending November 28, toysrus.com attracted 1.6 million unique visitors (an increase of 355% over the previous year) compared to eToys’ 1.4 million.

Ursala Moran, a specialty retail analyst at Sanford C. Bernstein, credits the increase in part to TRU’s strong brand awareness as a bricks-and-mortar toy retailer and an aggressive promotional and advertising campaign, which included rewarding customers who bought toys from the site with added discounts.

Moran, however, was quick to point out that the uptick in traffic may not have translated into more customers. ‘It could turn out that eToys and Amazon, for that matter, convert a higher percentage of customers than toysrus.com and, frankly, I think they do,’ she says. ‘The good news is that TRU is aware of this and is working hard on the back end, by adding more servers and more capacity to try and improve the site and its search engines.’

In the week leading up to Thanksgiving, Americans who shopped on the Internet spent over US$61 million on toys, making it the second highest-grossing category for all products purchased during the period, according to a report co-authored by Web research firm PC Data and Goldman Sachs.

Conducted during the busiest shopping week of the year, the report also revealed that toys exhibited the highest buy rate (the percentage of people who visit a site and buy something), at 20.3%, of the 18 categories tracked. Since this was the first time PC Data monitored on-line toy sales for Thanksgiving week, comparable sales data for the same period last year were not available.

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