Over the last year, Macy’s has noticed that adding Toys goods on its website has brought in new customers. It is now wagering that integrating Kids Toys Shop stores into its department stores will increase in-store traffic.
If Toys and Macy’s execute that strategy well, it may provide Macy’s a significant holiday lift, not just in toy sales but also by attracting parents and grandparents, who will make additional purchases to the stores that are not related to toys.
To do so, the new owners of Toys R Us will have to demonstrate that they grasp the hard holiday lessons that the original Toys R Us executives learned before the firm went bankrupt and shuttered all of its toy stores in the United States.
Last year, the new owner of the Kids Toys Shop brand and Macy’s announced a relationship that included the addition of Toys merchandise to the macys.com website and plans to open Toys locations inside Macy’s stores nationwide in 2022.
Roll out the toy shops
The partners announced last week that they had begun to roll out the toy shops in Macy’s stores. By October 15, they hope to establish a Toys R Us store in every Macy’s location.
The toy boutiques will range from 1,000 to 10,000 square feet in 11 high-volume Macy’s locations. Macy’s Herald Square shop in New York, Lenox Square in Atlanta, Dadeland in Miami, and Ala Moana in Hawaii will be the flagship locations. The toy stores will be built with the ability to add more shelf space during the busiest weeks of the holiday season.
In early 2021, WHP Global, a New York-based brand acquisition, investment, and management organization, bought controlling ownership in the corporation that controlled the Toys R Us name. Since then, WHP Global has been selling toys on Macy’s website under the Toys R Us brand and has opened a flagship physical store at the American Dream megamall in East Rutherford, New Jersey.
WHP Global Chairman and CEO Yehuda Shmidman are a self-described “Toys R Us” kid who believes the iconic brand name has a future selling to new generations of children and parents.
To commemorate the opening of the stores, Macy’s and WHP are organizing nine days of in-store events featuring activities and toy giveaways from October 15 to 23.
Selling Toys R Us products
Macy’s has reported some encouraging figures since it began selling Toys R Us products on its website. According to the presentation of the fourth-quarter results, 25% of Toys R Us merchandise buyers were new to the Macy’s brand in the fourth quarter of 2021, while 93% of Toys R Us online shoppers cross-shopped in other Macy’s categories.
According to Macy’s, 87% of Toys R Us buyers cross-shopped other categories in the first quarter of 2022.
However, in-store sales provide a more difficult merchandising and marketing problem than online purchases.
Here are some of the hard Christmas lessons the old Toys R Us learn when competing for toy sales with WalmartWMT +1.8%, TargetTGT +1.7%, and AmazonAMZN +2.1%, as well as some of the obstacles the Macy’s toy stores will face:
It’s nearly impossible to compete on price or assortment with Walmart, Target, and Amazon.
They are out of stock on popular toys before Christmas is every toy retailer’s greatest nightmare.
Best Educational Toys Store tend to be last-minute shoppers, so shops must be prepare to do the majority of their holiday sales in the busy last week before Christmas.
Toys R Us executives were warning decades before the firm filed for bankruptcy. So that Walmart and Target were exploiting toys as loss-leaders during the holidays to entice parents. Who would buy a variety of other items when they walked in seeking the most outstanding price on a Barbie Dreamhouse. Amazon increased pricing competitiveness by making it simple to look for goods online.
Offer a variety of products
Toys R Us will only be able to offer a variety of products due to limited space in Macy’s stores, so it will be critical to choose the proper toys to place on the shelves.
One of the old Toy’s primary weapons in the holiday toy wars was its size and lengthy history in the toy business, which provided it weight with manufacturers to ensure that it received shipments of hot toys that the competitors had sold out of. Because the new Toys R Us does not yet have the same scale or status. It will have to find the appropriate balance of Christmas bestsellers and perennial favorites. It knows it can keep in stock throughout the holiday season.
The shops’ success will be determine by their ability to attract parents, grandparents, and children who want to peruse a well-curate range of toys rather than purchase a specific popular toy. The businesses must be prominently display in Macy’s stores and well-staffe and maintained.
WHP and Macy’s are also banking on Toys R Us celebrities to bring customers into their stores. A life-size Geoffrey statue on a bench will be available for pictures and selfies in the stores.