Over the past several years, I’ve offered my opinion on market predictions for the U.S. toy industry during the holiday season. This year, instead of providing a specific metric, I’ll address my general thoughts related to market dynamics, challenges, opportunities, and various factors that I think will affect the outcome of the toy industry performance for the remainder of 2020.

Probably the most important and obvious factor is the impact of the pandemic on discretionary consumer spending. Since the lockdowns began, many consumers have snatched up toys to keep their children busy, as well as to provide entertainment for the family in the home. Some higher income families have had an excess of money to spend, especially with other entertainment options and expensive vacations being canceled. For lower income families, as well as under-employed and unemployed Americans, the second round of a government stimulus package that is currently being debated in Congress or tapping into their 401(K) accounts early through the CARES Act may be the only financial resource available to pay for holiday gifting.

Then there’s the impact that the pandemic will have on both in-store and online shopping. Will consumers who shopped in stores last holiday continue that behavior and impulsively fill their baskets with toys they think their child will like, will they want to get in and out of the store quickly, or will they do all of their shopping online and forgo in-store shopping entirely? If they opt to stay away from stores and do all of their shopping from home, online shopping does not provide the same opportunity for browsing up and down aisles to fill the basket, which leads to a reduction in additional purchasing, particularly the important impulse purchase. That said, this presents tremendous opportunities for online retailers to provide unique, “sticky” shopping experiences that will keep consumers engaged and spending.

In terms of when consumers shop, many may not wait until the week before Christmas to shop as they have in prior years, which will likely have a significant impact on sales. For example, last year we posted growth of $300 million the week of Christmas. This isn’t unusual as sales have been moving later into the season for many years. I’ve suggested in years past that this was because the deals during Black Friday and Cyber Monday/Cyber Tuesday have become so amazing that parents are spending their paychecks on themselves and have to wait until they get that last paycheck to spend on their kids. Not only am I concerned that paycheck spending may be limited, but I’m concerned that we will not see that last minute rush into the stores due to fears of COVID-19. Again, this type of challenge presents an opportunity for savvy online retailers.

So that begs the question, will consumers shop enough earlier in the season to make up for the week of Christmas? In the past, consumers bought for themselves earlier in the season—I don’t see the deals stopping early in the season, in fact, the deals will be earlier and often—they will be more spread out. With Amazon Prime Day shifting to October 13-14, we can expect the shopping season to get an earlier start across all of retail, and hopefully for toys, which could be a positive for the overall success of the season.

Media entertainment also plays a large role in the success of toys. Last year, we had three major tent pole movies which, when combined, drove nearly $0.5B of growth in calendar Q4: Disney Frozen, Star Wars, and Toy Story. With no movies being released in theatres to support toy sales and new movies targeting kids available for in-home streaming being limited, this will certainly affect overall sales of movie-related toys.

On the plus side for growth, based on current trends, COVID-19 has led to toy sales increases. With no end of the pandemic in sight, toys sales could continue on a growth path. And with limited entertainment options available to consumers that are self-isolating, and if more schools move online (and more parents work from home), they might continue to turn to toys to fulfill their household entertainment needs, which would lead to increased sales. And, as we’ve seen in previous economically challenged times, parents will sometimes forego their own needs to make their children happy. In this crazy, stressful year, parents might just go overboard and splurge on their kids (if they have money to do that, of course).