Toys”R”Us is pulling out all the stops this holiday season in efforts to compete with the likes of Walmart and others that have encroached on its territory for a while. The chain’s solution? A pop-up and store-within-a-store strategy.
Not satisfied that shoppers will gravitate toward the 586 stores across the US that it operates, Toys is opening about 350 pop-up locations in high-profile malls over the holidays.
Earlier this week, the company announced another initiative, the FAO Schwarz brand, which it bought in May, will open store-within-store boutiques at all of its locations.
Toys definitely needs to turn things around over the holidays. Same-store sales in its most recent quarter fell 7.2% year over year. And we assume that those figures don’t tell the whole picture, as they’re combined with the 260-unit Babies”R”Us chain, which does much better by most accounts.
Will the increased visibility of the pop ups and the popular FAO brand give Toys the extra push it needs over the holidays, or do discounters already have this one wrapped up?
I have worked with Toy ‘R’ Us in the past and found them to be true innovators. They have had a tremendous amount of competition nationally, but continue to reposition and find ways to compete. I look forward to seeing the results of their store in store FAO concept. Their brand maintains a great reputation – but it is a matter of getting more exposure in a crowded marketplace.
Good For Them! Mall landlords will be happy just to have a national retailer actually taking space (versus subtracting it). FAO Schwarz will help them differentiate themselves from WallyWorld.
If you were Toys R Us, you have to realize that you cant compete on price anymore since Wal-Mart is taking all the budget shoppers, however you still have to provide fair pricing for the same toys that are available at wal-mart. So then your CEO has to decide that you can compete on selection and quality – which is what they’re doing now. They have locked up the “high-end” toy market with FAO, and their stores are HUGE which means if you cant find it at Toys R Us, you have to go online. The toy store needs to be an experience that kids can enjoy and force parents to purchase toys – just like i did to my parents when i was younger!
I think this is a good idea that will attract shoppers, I hope they offer better quality and more interesting toys than are available in Walmart. I like the idea that they are not trying to compete on price but on presentation and service, Walmart can afford to give their toys away, and maybe they should!
just as i predicted, no one can compete with walmart on price!! walmart got wind of toys r us’ advertisements of “quality” and presentation, and now they are competing on price – sticking to their core strategy.
http://www.reuters.com/article/domesticNews/idUSTRE5A10N720091102