Holiday Toy Retail in a Post-Toys R Us World

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Child looking at holiday toys through a store window

Earlier this year, Toys R Us claimed bankruptcy and closed its many locations throughout the world, leaving the market wide open for other retailers to take advantage of the holiday toy season. In fact, the closing of Toys R Us left an $11 billion void in the market.

Unsurprisingly, massive retail giants Amazon, Walmart, and Target are leading the pack, each hoping to be crowned the new king of holiday toy shopping. However, according to a study by commerce marketing services provider Criteo, former Toys R Us customers haven’t sworn their loyalty to any one retailer just yet.

Due to its many locations, wide selection, catchy jingles, and general brand trustworthiness, Toys R Us was more than just a toy store for many of its customers. It inspired a real sense of loyalty from many shoppers.

With Toys R Us out of the picture this holiday season, consumers are making their shopping decisions based on factors like location, availability, delivery time, and price, rather staying loyal to a specific retailer. Purchasing decisions now hinge almost entirely on convenience or specific needs, and are not heavily influenced by store favoritism or brand loyalty.

While this lack of brand enthusiasm may be disheartening for retailers, it actually sets the stage for both big and small businesses to push forward and claim their place in the world of holiday shopping. But with great opportunity comes a great amount of work and strategic planning; retail success this holiday season will require more than a well-stocked inventory and steady supply chain.

’Tis the Season to Stay Inside and Shop Online

According to the Criteo study, Amazon is the top pick among former Toys R Us customers, but only by a slim margin — 34% of survey respondents chose Amazon, while 31% chose Walmart. Amazon’s low prices, fast Prime shipping, and massive product selection have helped establish the commercial goliath as a dominant force in the e-commerce world. However, this isn’t stopping Walmart from encroaching on Amazon’s territory.

Walmart has been steadily expanding its online shopping presence over the past year, to great fruition. During the third business quarter, the company reported that its e-commerce sales had increased by 43%.

In order to stimulate further expansion during the time leading up to the holidays, Walmart released the online Walmart Toy Lab, an interactive experience that is described as a “digital playground.” Using a computer or tablet, the lab gives virtual access to 20 of Walmart’s top-rated toys, allowing kids to watch demos and explore each toy’s features.

The Appeal of Experience

While the Walmart Toy Lab offers a fun way for children to watch a toy in action, it’s simply not the same as actually playing with a toy in real life.

Although online shopping has been increasing in popularity for a while now, some retailers are focusing their efforts on the other side of the spectrum, creating fun holiday experiences in brick-and-mortar stores. Considering that online shopping provides customers with a very convenient, accessible purchasing experience, investing heavily in the brick-and-mortar realm flies in the face of conventional wisdom.

But these stores provide physical space that can be utilized to create emotional experiences in a way that online shopping cannot. Instead of just putting products on shelves and providing competitive sale prices, these experiential retailers are engaging with customers on a deeper level by offering relevant events and activities that have the power to create a heartfelt connection between customer and store.

Many retailers are jumping on this experience economy, providing a wide range of special in-store holiday events, such as performances by characters in popular kids' TV shows, toy-testing extravaganzas, breakfasts with Santa, and tree lightings.

FAO Schwarz, which shuttered its doors in 2015, to the great surprise of many, recently reopened — just in time for Christmas and Hanukkah. While the legendary toy store features a delightful selection of whimsical, beautiful toys, it’s the in-store interactive experiences that have made the company’s comeback a real standout. Kids can witness science in action at the STEM lab, make a new stuffed animal at the Build-A-Bear Workshop, or play a song on the iconic floor piano.

The Comeback Kid

Although retailers far and wide are excited by the opportunities that Toys R Us’ liquidation and closing have provided, the window for these favorable circumstances may be closing quickly.

In early October, the Toys R Us controlling lenders that handled the bankruptcy process announced their plan to retain the TRU intellectual properties (e.g., logos and Geoffrey the Giraffe) and eventually resurrect the famous store chain in some form. The details are pretty hazy so far, but it’s clear that the lenders intend to develop both an online and brick-and-mortar presence once again.

Considering the general lack of consumer enthusiasm for other toy retailers, Toys R Us may just be able to snatch back the crown, especially with the right business plan in place. However, it would be nothing short of a holiday miracle for Toys R Us to open in time for the 2018 holiday season, so toy retailers can breathe a little easier — at least until the new year.


Image Credit: Romrodphoto /

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