Fourth Down: As toy retailers enter into the critical holiday season, they’re setting up some intriguing plays to get shoppers to splurge for the holidays.
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The Christmas season is right around the corner, and for toy retailers that’s generally the make or break for their entire year. It’s been estimated that Toys ‘R’ Us (Wayne, N.J.), once the nation’s leading toy seller, does more than 40 percent of its annual business in the fourth quarter of the year.
But Toys ‘R’ Us is no longer the leading toy retailer in the nation. It lost the top spot earlier this decade to Walmart, which gobbled up the toy sector – much as it had so many other product sectors – with lots of locations, low prices, broad selection and grab-and-go merchandising.
However, Toys ‘R’ Us is fighting back, with a new strategy that could prove to be brilliantly successful – or a desperate final chapter of its toy story. Under the aggressive leadership of chairman and ceo Gerald Storch, the former industry leader opened temporary pop-up stores in 80 malls around the country in the fall (as well as adding temporary toy departments to 270 of its Babies ‘R’ Us stores). The shops were opened in mid-October and will operate into January.
The pop-up idea is reminiscent of the strategy Target Corp. has been employing for several years, launching temporary retail sites during New York’s fall Fashion Week so it could get a foothold into (and an identity with) the fashion apparel market without investing deeply in the city’s costly real estate market. Not surprising, perhaps, that Storch is a former Target executive.
“How brilliant is that?” says Lee Peterson, vp, creative services, for WD Partners (Dublin, Ohio). “If malls are still viable at all, it’s during the holidays. And there are lots of empty spaces these days that mall owners are anxious to fill. So Toys ‘R’ Us acquires available locations (probably at a discount), crams in its best sellers for one quarter, takes advantage of the holiday traffic and then moves out after the season with no further commitment. It’s a safe bet.”
And the temporary spaces in the still-flourishing Babies ‘R’ Us stores give the company control to move into and out of spaces it already owns.
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