YOUR MONEY-For hot toys, sale-watching is like playing stock market
NEW YORK Jan 17 (Reuters) - A few days before New Year's, my daughter came upon the free iPad app for the Furby Boom and fell in love with the toy.
I usually do not fall prey to her whimsical wants, but with her 6th birthday approaching, it seemed like good timing to buy the toy, which is an interactive stuffed animal that responds to human voices and commands from the app.
I thought I could pop into a discount chain and pick one up on a post-Christmas sale. Then I learned that buying a Furby Boom was like playing the stock market.
The roly-poly fuzz ball, which is the latest iteration of a craze that started in 1998, sells out at most stores. It trades online at a premium high above its manufacturer's suggested retail price of $59.
Since November, retail prices have fluctuated from a low of $29 to more than $100.
When is the best time to buy a Furby Boom? To figure that out, I assessed price data to identify the timing of the next sale.
Experts have access to up-to-the-minute price and inventory information, but consumers don't have much more than real-time price comparisons. It takes digging to find historical data, and you need a prognosticator to time the next price dip.
Conventional wisdom is that Black Friday is not a good time to buy toys because they go on sale in December, but that did not apply to popular toys during the 2013 holiday season. Some manufacturers kept inventory tight and prices high.
You probably paid more if you waited to buy toys like the bow-and-arrow set Nerf Rebelle; the Doc McStuffins Get Better Checkup Center, a souped-up medical kit; and Big Hugs Elmo, the latest mechanical Elmo creation.
Jim Silver, editor-in-chief of timetoplaymag.com, a toy information resource, is one of those experts who advise that Black Friday is not the best time to buy toys. Instead, he suggests buying in early November or late December.
"What I've always said is buy early and buy late," Silver says. The caveat: His advice does not apply to the most popular toys of the season.
Given advanced inventory control and big-data assessments of buyer behavior, conventional when-to-buy advice applies to a smaller amount of products each year.
"It's that Catch-22: If your child wants it, it's probably not going to go on sale," Silver says.
His assessment of my chance of finding a Furby Boom on sale in the near future: "Slim to none."
SHOPPING PRE-HOLIDAY SALES
With tallies now in, what happened during the holiday shopping period was that retailers shifted to offer good prices before the holidays rather than after, something consumers should take note for the next holiday season.
According to MarketTrack data for 2013, the week encompassing Black Friday was when most popular toys hit their low price for the holiday season. There were also several price lows in the weeks prior to Thanksgiving as retailers offered sales well ahead of the holidays.
As for the price trajectory of the Furby Boom, it hit its low price over the Thanksgiving holiday weekend at Walmart and Toys R Us stores. The price ballooned to $40 on Amazon.com, and has since gone into hockey-stick mode.
MarketTrack also determined that the prices of the majority of hot toy items increased after January 1, 2014.
One factor keeping prices high into January is low inventories. According to data from Panjiva, a data firm, Furby Boom maker Hasbro Inc did not produce a large amount of the toy in December, so stores have limited quantities.
January inventory numbers are not yet available, but Josh Green, Panjiva's founder and CEO, predicts that those numbers will jump. Prices, however, won't necessarily go down, he cautions.
"The really dangerous spot for retailers is when your competitors are able to restock and satisfy demand. But if everyone had trouble, chances are there will still be demand when Furby finally arrives," Green says.
High demand, of course, means slim probability of price slashing.
While prices will remain high for popular toys, retailers might have flash sales as they get shipments and try to entice customers back to stores. Target temporarily lowered the price on some Furby models (purple houndstooth, anyone?) to $49.99.
Otherwise, toy sales are possible around Easter, Silver says.
To find out when an item will be on sale, sign up for online price alerts. Online retailers, along with third-party aggregators such as dealnews.com and even Pinterest, track prices. Timetoplaymag.com, which has a price comparison tool for toys, is launching an alert feature next month.
As for my daughter, her chances of getting a Furby Boom for her birthday are looking pretty good. She is keeping her room clean and doing her homework, and while that's probably the only the deal I'm going to get, it's good enough for me.