The Hottest Holiday Toy Is Not What You Think

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U.S. Consumer Product Safety Commission

Last year, there was no standout must-have holiday toy—no equivalent to the Tickle Me Elmo or the Cabbage Patch doll. For 2013, it doesn’t look like there will be a mad rush to buy any particular toy either. Are the days of the annual hot holiday toy craze gone forever?

Remember Zhu Zhu Pets? The last time you saw one, it was probably at your neighbor’s yard sale, with a $1 sticker attached. But in the weeks leading up to Christmas 2009, it was the peak period of Zhu Zhu mania, when the robotic hamsters were in extraordinarily high demand and online sellers were asking as much as $7,000 for Zhu Zhu collections.

The hot holiday toy—accompanied inevitably by loads of opportunistic entrepreneurs who snatch them up and sell them to the desperate for hefty profits—has a long history. In 1996, for instance, Tickle Me Elmo scalpers asked (and sometimes received) thousands of dollars for a doll that retailed for under $30.

There will never be a shortage of such people looking to make a quick buck. But they may have a harder time doing so by flipping traditional kids’ toys this year, and perhaps for the foreseeable future.

(MORE: From Tickle Me Elmo to Squinkies: Top 10 Toy Crazes)

Every year, retailers release a “hot toy” list, to clue in parents and grandparents (and maybe even kids) as to what should be under the tree come December 25. Last year, Toys R Us even went so far as to start offering a “hot toy reservation” system, in which customers could put money down on a toy as early as September in order to guarantee they’d have the item in the event it wound up being sold out on shelves.

For the most part, however, it wasn’t too difficult to find every toy on your tot’s wish list last year. So the idea of reserving a toy—that your child may or may not want—out of fear it won’t be available come November or December seems pretty unnecessary in retrospect.

Erik Karson, a marketing professor at the Villanova University School of Business, says that it doesn’t appear likely that anyone will need to reserve, overpay, or go to unusual lengths to get their hands on one specific toy—because there isn’t likely to be a crazed spike in demand for any one specific toy. “I’m not seeing it,” says Karson. “You look at the ‘hot toy’ lists from Target and Toys ‘R Us and the others, and nothing really jumps out. There’s another Elmo brand extension, but it seems like there’s a new one every year.”

What’s more, the annual tradition involving a mad rush on one hot toy seems to be fading. “Remember ‘Jingle All the Way,’ the Arnold Schwarzenegger movie?” says Karson. (The rather forgettable film featured Arnold as a dad forced to extreme lengths to get that year’s hot toy, Turbo Man, for his son.) “We haven’t seen that kind of behavior in a while. And we may never really see it again.”

One reason this is so is because it’s becoming increasingly unlikely that all, or even a majority, of American children are into the same thing at the same time. “Everything’s gotten so fragmented and targeted in the marketplace,” says Karson. “So you’re just not going have this big gotta-have-it toy.”

(MORE: 5 Signs This Holiday Season Is the Most Competitive Desperate Ever for Retailers)

The other reason is that there probably won’t be any one standout hot toy is that kids just aren’t as into traditional toys nowadays. Not when there are Xboxes, Playstations, Apple products, and all sorts of other gadgets drawing their attention.

According to the newest survey from BDO, 69% of retailers say that consumer electronics will be the hottest spending category for the holidays. Back in 2009, just 24% pointed to electronics as the top hot gift category. Over that same time span, the number of retailers expecting toys to be the hottest category decreased from 39% to just 3%. In another survey, from the shopping site, 88% of kids ages 12 to 17 said that they most wanted a gadget as a holiday gift, with the majority (69%) requesting some kind of Apple device.

This shift is taking place partly due to simple consumer preference: Kids are more apt to want to play games with the latest gadgets rather than regular toys. “It’s a pretty major shift,” says Karson. “Kids want to be networked and plugged in.” The other key factor is that retailers have a big incentive for pushing electronics over toys. “The margins are much better,” says Karson.

If there’s one other gift category that’s even hotter than electronics, it’s the gift that allows the recipient to do his or her own gift-shopping: the gift card. According to the National Retail Federation, nearly 60% of Americans want gift cards for the holidays, making it the top requested item. Gift cards also topped a Nielsen poll asking consumers what kinds of gifts they’ve be purchasing for the holidays. Tech came in second place in the poll, followed by toys,

(MORE: 5 Ways Retailers Are Trying to Snag Holiday Shopping Dollars Extra Early This Year)

Such poll results should probably make retailers happy. Considering that so many gift cards are never used, the margins on those sales have to be pretty good too.