The lovable, squeezable Elmo returns to store shelves this Christmas shopping season, and with the aid of electronics, the furry red simpleton hugs back.

Also back on the shelves is the newly renovated, three-story Barbie Dreamhouse ($159), although this year the luxury dollhouse has a second pull-string elevator, six bedrooms and pink stainless-steel appliances. She looks and lives well for a gal born back in 1959. She has more than 8.4 million “likes” on her Facebook page. Fans can follow her on Twitter, too.

“It’s the ultimate ‘wow’ to open on Christmas morning,” said Lisa McKnight, senior vice president for marketing at Mattel.

Classics like Barbie and Elmo, as well as Furby and the winding Hot Wheels track, never seem to fall out of fashion with kids. All are featured on Wal-Mart Stores Inc.’s recently released Top 20 list of “Chosen by Kids” toys. This year is the fifth consecutive year that a Barbie product has ranked on Wal-Mart’s Christmas bestsellers. Elmo had dropped off the list, but is now back with the new Big Hugs toy ($49). The refurbished Furby, Furby Boom, is about $59. The retooled Hot Wheels Triple Track Twister Track Set is priced at $32.

“Wal-Mart is over 30 percent of the total toy market in the United States,” said Scott McCall, senior vice president and general merchandise manager for the global retail giant.

In the past, Wal-Mart picked Christmas toy inventory based largely on suggestions from toy suppliers and historical data. This year, the retailer hired an outside firm to round up 1,000 children and threw them in a Dallas testing lab. Dallas was chosen for the test site because of the diversity in its population,” said Wal-Mart spokesman Molly Philhours.

Children 18 months to 10 years old had their run of booths filled with more than 50 new toys to play with. The parents then reported which toys their children enjoyed the most. The groups were broken down into brackets of 18 months-2 years, 3-5 years, 6-7 years and 8-10 years.

“The kids had a lot of fun, playing and laughing,” McCall said. “I think the parents had just as much fun as the kids did, just watching their kids enjoy having the opportunity to play with all these cool toys in one place.”

“We had a lot of fun,” McCall said of the first “Chosen by Kids” event, held in August. In his opinion, “Electronic interactive toys really continue to be the trend and that’s what kids are attracted to.”

Once back at the home office in Bentonville, officials assembled a list of toys “that sort of bubbled to the top,” of the kids list of favorites, he said. Buyers made sure they bought enough of the top contenders and negotiated for low prices.

Some new toys made the list alongside the classics. McCall’s favorite is the pink- or purple-winged Flutterbye Flying Fairy Doll ($28), which flies wherever children want, guided by their outstretched hands.

“Little girls just light up having their own personal flying fairy,” McCall added. His own children - two girls and a boy - query him about each year’s hottest toys.

“More than anything, I think what this program did for us was help take the guesswork out of the hands of parents,” McCall said. “Sometimes history isn’t always a leading indicator.”

Wal-Mart’s slightly improved layaway program (the $5 opening fee has been scrapped) for 2013 makes it a little easier on consumers facing tough times, which affected the company’s gross revenue in the first half of the year. McCall said toys and electronics are the two categories that contribute most to what shoppers put on layaway.

A Securities and Exchange Commission filing for Mattel in February declared Wal-Mart to be the toymaker’s largest customer with $1.2 billion in business for 2012. Toys R Us and Target followed with $700 million and $500 million, respectively.

“We’re incredibly impressed with Wal-Mart’s approach to their holiday campaign this year. It’s very authentic and it feels pretty original,” said McKnight from Mattel.

She said this season could be one for the “classics” like Barbie. The long-legged doll’s popularity is expected to continue with a big celebration planned to coincide with her 55th birthday next year. She is the No. 1 toy in the United States and a huge moneymaker for Mattel.

“As long as we have Barbie updated with the latest fashions and the latest hairstyle trends and the latest accessories that mimic what’s going on in home decor, she’ll continue to remain popular,” McKnight added. “And that’s why the toys have such staying power.”

Business, Pages 77 on 09/29/2013