Re­tail­ers up their game af­ter Toys R Us clo­sures

San Francisco Chronicle Late Edition - - BUSINESS REPORT - By Anne D’Innocenzio

When Toys R Us closed, 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 Ama­zon, com­pa­nies like Tar­get, Wal­mart and Party City in­creased their of­fer­ings. Now, ahead of the hol­i­day sea­son, they’re go­ing even fur­ther by fo­cus­ing on mak­ing their stores a dy­namic shop­ping ex­pe­ri­ence. That means cre­at­ing play ar­eas, of­fer­ing de­mos of 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, 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 Wal­ 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 spots for big­ger toys like elec­tric cars, play­houses and mu­si­cal in­stru­ments, as well as adding nearly 200 more prod­ucts. And 100 Tar­gets 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. Mex­ico’s Distroller World, 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 hand­son 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 to 20 per­cent this year.

Toy sell­ers had been long tak­ing ad­van­tage of Toys R Us woes, but stepped up their 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 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.

“I am con­vinced that the strong toy in­dus­try growth so far this year has been at least par­tially sup­ported by the em­pa­thy that peo­ple felt to­ward los­ing a store like Toys R Us,” said Juli Len­nett, NPD’s se­nior vice pres­i­dent and in­dus­try ad­viser for toys in a state­ment. “I think it brought about an emo­tional re­sponse that re­sulted in par­ents buy­ing more toys over­all.”

Even FA OS chwarz is tak­ing ad­van­tage of the nos­tal­gia. The toy store is set to re­open in Novem­ber in Man­hat­tan af­ter shut­ter­ing three years ago.

The store will be staffed with the­atri­cal per­form­ers and will fea­ture play ar­eas like a min­i­gro­cery store where kids can buy pre­tend food made of wood. In an­other sec­tion, there’ll be a me­chanic who will help kids build ra­dio con­trolled race cars. FAO Sch­warz is also bring­ing back the over­sized pi­ano made fa­mous in the Tom Hanks movie “Big.”

Richard Drew / As­so­ci­ated Press

Hut­ton, 3, plays with Lit­tle Tikes Cir­cuit Cen­ter at the Wal­mart Toy Shop event in New York.

Richard Drew / As­so­ci­ated Press

Anne Marie Ke­hoe is a vice pres­i­dent at Wal­mart, which says 30 per­cent of its toy as­sort­ment will be new.

Newspapers in English

Newspapers from USA

© PressReader. All rights reserved.