[nostrademons]

If they sell the hot item then they make only the margins for that one item. If they "sell out" of the hot item, then parents either buy an alternative (you can't just get your kid nothing for Christmas), or they buy the accessories for the hot item with a promise to get the hot item once it becomes available again. Then after Christmas, they actually get the hot item, because the kid still wants it (and their one friend who has it is really cool).

It spreads demand out over time and over their product line. Similar strategy as how airlines advertise cheap fares to get you to fly on them, but then offer upgrades, early-bird check-in, more leg-room, additional checked bags, alcohol on the plane, etc. to make money once they have your business.

[simonh]

There's no way they can be sure the customer will buy another item from their own product line instead. Surely they're more likely to buy a competitor's product?

[nostrademons]

They don't have to, as long as more buyers do than choose to not buy the "hot" item after Christmas. In general it's a good thing to increase the size of your industry, as long as you capture some (not all) of that increase.

Also, I wouldn't bet on them being more likely to buy a competitor's product. Brand recognition counts for a lot, particularly with toys & other discretionary purchases. Some will, of course, but most people once "primed" will buy something close to what they initially had in mind.

[TeMPOraL]

This was a strategy practiced long before the invention of e-commerce. It works perfectly for brick-and-mortar shops because physical distance to the toy shop (in winter!) guarantees more return customers.