Re­tail­ers are fill­ing the void left by the clo­sure of Toys R Us stores.

Com­pa­nies ramp up of­fer­ings ahead of the piv­otal hol­i­day sea­son

Houston Chronicle - - BUSINESS - By Anne D’Innocenzio

NEW YORK — When Toys R Us closed its doors, cus­tomers mourned the loss of a beloved brand that con­jured mem­o­ries of their own child­hood.

Re­tail­ers, on the other hand, saw an op­por­tu­nity.

Rather than cede any more ground to on­line be­he­moth Ama­zon, com­pa­nies like Tar­get, Wal­mart and Party City ramped up their of­fer­ings. Now, ahead of the piv­otal hol­i­day sea­son, they’re go­ing even fur­ther by fo­cus­ing on mak­ing their stores a dynamic shop­ping ex­pe­ri­ence. That means cre­at­ing play ar­eas for kids, of­fer­ing demos of new toys and stag­ing events like scav­enger hunts in the stores.

Re­tail­ers are try­ing to grab a piece of the nearly $3 bil­lion left on the ta­ble by Toys R Us, or 12 per­cent of the U.S. toy mar­ket, ac­cord­ing to NPD Group Inc., a mar­ket re­search group.

Last month, Party City opened 50 Toy City pop-up shops that fea­ture 6-by-8-foot Lego di­nosaurs and other in­ter­ac­tive dis­plays. Wal­mart says 30 per­cent of its hol­i­day toy as­sort­ment will be new. It will also of­fer 40 per­cent more toys on Wal­mart.com from a year ago. In Novem­ber and De­cem­ber, the com­pany’s toy area will be re­branded as “Amer­ica’s Best Toy Shop.”

Start­ing in late Oc­to­ber, Tar­get will de­vote ex­tra space at 500 stores lo­cated near for­mer Toys R Us stores for big­ger toys like elec­tric cars, play­houses and mu­si­cal in­stru­ments as well as adding nearly 200 more prod­ucts. And 100 Tar­get stores will see new lay­outs and fix­tures in the toy area. The com­pany is also ex­pand­ing the num­ber of kids’ events it hosts. Most re­cently, it had a Lego Minecraft event that fea­tured a scav­enger hunt.

At least one for­eign toy re­tailer is look­ing into the U.S. mar­ket af­ter the demise of Toys R Us. Mex­ico-based Distroller World, an ex­pe­ri­ence-based re­tailer with more than 60 stores in Mex­ico and Latin Amer­ica, is set to open its third store in the U.S. in Oc­to­ber. And it will be ap­proach­ing U.S. depart­ment stores to open shops to repli­cate its model in Mex­ico, says CEO Daryn Fil­lis. At the cen­ter of the ex­pe­ri­ence: Par­ents and chil­dren cre­ate their own ad­ven­ture to adopt an alien baby de­liv­ered in a space cap­sule.

“It’s all about the demon­stra­tions, the hands-on ex­pe­ri­ence,” said Jim Sil­ver, ed­i­tor-in-chief of TTPM, a toy re­view site. “When you get your hands on a toy and you can touch and feel, it does lead to greater sales. And those are the ex­pe­ri­ences that shop­pers en­joy.”

Mean­while, Ama­zon is re­port­edly plan­ning a toy cat­a­log to be dis­trib­uted at its Whole Foods stores. The com­pany de­clined to com­ment on the cat­a­log, but an­a­lysts say Ama­zon could grow its mar­ket share in toys from 15 per­cent to 20 per­cent this year.

Toy sell­ers had been long tak­ing ad­van­tage of Toys R Us woes, but it stepped up its ef­forts when the chain filed Chap­ter 11 in the fall of 2017 and ac­cel­er­ated the pace when the chain an­nounced it was liq­ui­dat­ing its op­er­a­tions in March. As of early this year, Toys R Us had more than 800 U.S. stores. It closed the last 200 stores at the end of June.

With re­ports of the re­tailer’s demise, there was an out­pour­ing of nos­tal­gia from shop­pers, and some an­a­lysts credit that em­pa­thy for help­ing to drive an uptick in toy sales for the first half of the year. U.S. toy sales from Jan­uary through June in­creased 7 per­cent to $7.9 bil­lion, ac­cord­ing to NPD. Last year, toy sales in­creased 1 per­cent to $20.7 bil­lion from 2016.

Even FAO Sch­warz is tak­ing ad­van­tage of the nos­tal­gia. The iconic toy store is set to re­open in Novem­ber in Man­hat­tan af­ter shut­ter­ing three years ago.

Richard Drew / As­so­ci­ated Press

Alexan­der, 5, plays with a Juras­sic Rex at the Wal­mart Toy Shop event in New York. Wal­mart says 30 per­cent of its hol­i­day toy as­sort­ment will be new, and will of­fer 40 per­cent more toys on­line.

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