Holiday Season Competitive Showdown: Toys & Games vs. Consumer Electronics

Holiday Season Competitive Showdown: Toys & Games vs. Consumer Electronics
December 21, 2015 Revionics

Monitoring Holiday Pricing Trends

Marketyze and Revionics recently published the first part of their 2015 Holiday Pricing Trends Report, analyzing competitive pricing data gathered from October 27 through December 5. The report looks at various aspects of the price positioning and behavior of four leading retailers: Walmart, Sears, Toys R Us and Best Buy, as well as four leading eTailers: amazon.com, ebay.com, jet.com and rakuten.com.

The seven popular holiday gift categories covered in the report are: consumer electronics, toys & games, health & beauty, sports & outdoors, arts, baby products, and home & kitchen. We highly recommend that you download the full report, but here we would like to share with you some insights regarding the comparative level of price competitiveness of toys & games vs. consumer electronics.

A Look at Toys & Games

The following graph shows the average prices over time of Toys R Us, Amazon, Walmart and Jet.com across an overlapping assortment of 111 toy & game products:

holiday pricing trends--toys games

It is clear from the graph that Toys & Games is a highly competitive category in which all the retailers are closely tracking each other’s pricing. The average price gaps are generally very small and, in this category, both Jet.com and Walmart challenge Amazon’s price leadership position. However, another parameter that is important for assessing competitiveness is dynamic pricing, i.e., how frequently a retailer changes prices during the report period, as shown in the following table:

holiday pricing trends-toys volatility

As we can see, Amazon is breathtakingly dynamic in its pricing in this category, having changed prices across ~97% of the assortment, with double the number of average changes per item (10.86) vs. Jet.com, the next most dynamic.

A look at Consumer Electronics

Now let’s look at the same graph and table for consumer electronics, where we tracked an overlapping assortment of 86 products for Best Buy, Walmart, Amazon and Jet.com:

Once again we see that the leading retailers in this category are tracking competitive pricing closely and maintaining relatively small pricing gaps. Walmart competes very closely with Amazon for price leadership in this category, with Best Buy and Jet.com also highly synchronized with each other’s pricing. In terms of volatility, Amazon is extremely dynamic in its pricing, having changed prices across ~97% of the assortment, with Jet.com and Walmart following closely.

Price Competitiveness Comparison

When comparing the price competitiveness of the two categories, we observe the following:

  • In terms of price leadership positioning, toys & games is far more competitive than consumer electronics. Whereas in consumer electronics Amazon is clearly in its usual price leadership position, in toys & games both Walmart and Jet.com give Amazon a “run for the money”.
  • Overall the consumer electronics category is more volatile than toys & games, with an average of 7.34 price changes per item vs. 6.04 changes per item in toys and games category.
  • Similarly, we see that in the average number of price changes per item, Jet.com competes more closely with Amazon in consumer electronics than in toys & games. In toys and games Amazon, on average, makes 48% more changes per item than Jet.com, vs 35% in consumer electronics.
  • Last but not least, it is interesting to note than in toys & games the retailers dropped their prices for Black Friday while in consumer electronics the average price actually rose. On the other hand, Cyber Monday was basically a non-event in toys & games, but highly competitive in consumer electronics.

So which holiday season category is more competitive – toys & games or consumer electronics? We would say it is pretty close to a draw but we would love to hear what you think.

Click here to download the full 2015 Holiday Pricing Trends Report: Part 1