Black Friday 2018: With Toys 'R' Us MIA, Retailers Aim to Cash In
Black Friday 2018 marks the beginning of the holiday shopping season for consumers in North America but this year, the iron throne of the toy market is absent for the first time in decades. Many large retailers that contributed to the demise of Toys ‘R’ Us are vying for the final blow to now absorb as much of the iconic toy retailer’s holiday consumer market as they can.
After filing for bankruptcy in September 2017, the 70-year-old Toys ‘R’ Us hoped holiday season sales could offer them some additional breathing room but unfortunately, they fell flat. This all but expedited the free fall that eventually resulted to the closing of its more than 700 U.S stores by mid-2018, leaving their $10.5 billion in annual revenue-free for the taking.
Tough to say what exactly did Toys ‘R’ Us in. Big box stores like Walmart and Target surely had a hand in it as did the onslaught of online retail taking their bite out of sales for Toys ‘R’ Us. But it's important to remember, in a time when we like to blame online retail, it’s not as villainous as it’s made out to be, at least not yet. The U.S Census Bureau released a report in February 2018 stating eCommerce retail sales only accounted for around 9% of total retail sales for the year. You might just say in this case, somewhere along the way the “Toys 'R' Us Kids” turned into adults and favored a different, more modern shopping experience at a lower cost and greater convenience. Something Toys ‘R’ Us competitors were more than happy to serve up.
The truth is, towards the end the organization was left gasping for air under a mountain of debt. In a last ditch effort to save the business, Toys ‘R’ Us incurred $5 billion in debt from cutting prices, acquiring other toy giants like FAO Schwartz and KB Toys and to gain revenue through exclusivity, signed significant licensing deals with specific toymakers, all to no avail.
Black Friday Toy Deals Are Comin’ in Hot
What’s been in the works all year for the big brands like Walmart, Target, Amazon and even Best Buy will reach a peak this holiday shopping season. "While toys [are] important all year long, it rises to a whole new level in the holidays," says Target’s Chief Merchandising Officer, Mark Tritton.
Last quarter, Target saw an increase of 20% over the same time a year ago and is anticipating an even more significant increase during the holidays, a season that accounts for nearly half of their annual sales. This will hopefully be facilitated by the nearly 250,000 square feet of retail space they’ve dedicated to toy inventory across 500 stores. In-store merchandisers even went to work in creating new displays to bring awareness to the newly expanded toy sections and even remodeled toy aisles in 100 of Target’s nationwide stores.
We’re even seeing some odd competitors jump into this arms race. Foot Locker is going hard in the paint by teaming up with Funko, Inc. to sell figurines of some of the NBA’s biggest stars like Lebron James, complete with his newly minted L.A. Lakers jersey on. They’re hoping vying for the open toy market with a shot at sports collectibles can save a slowdown in business this last year thanks to a cooling off of sales for previously hot brands like Nike and Adidas.
Best Buy is also joining in by expanding its toy inventory, hoping those who come in for their huge Black Friday and Boxing Day sales on technology and electronics may decide to add some toys to their cart while they’re there.
Walmart Brings Tech & Influencers to Toy Race
As one of the world’s largest retailers, you know Walmart spied out the opportunity to gain market share in the absence of Toys 'R' Us a while ago and has been aggressively pursuing its holiday season strategy all year. In September, Walmart announced it would be increasing its toy selection in store by 30% and its website selection by 40%. Vying for the broadest selection overall, Walmart, like Target, is also dedicated more in-store real estate to toys, shifting out more seasonal goods like back-to-school merchandise.
Bringing technology into their corner, last week Walmart introduced The Walmart Toy Lab, “an all-new digital playground where Walmart’s littlest fans can play with 20 of the toys on the retailer’s Top Rated by Kids top toy list right from their computer or tablet.” Jumping on the engagement momentum of the unboxing video trend, this whimsical digital space will let kids feel like their own toy tester and can add the favorites they uncover to a wish list. These kids who I am sure will all hope Santa has access to that live link.
Their second ally will be kidfluencer Ryan, the 7-year-old who stars in Ryan ToysReview, the youtube channel run by his family that shows him reviewing toys and kids’ food products to an audience of more than 10 million subscribers. Walmart has partnered with Ryan to provide in-store demos and bring his brand of toys “Ryan’s World” exclusively to Walmart shelves.
For those of us who are old enough to know Toys ‘R’ Us as the one place we literally dragged our parents into, or remembers picking out toys and even carrying them around the massive store in stark protest to the idea we could be leaving without it, we’re definitely feeling nostalgic that a pillar of our childhood is now no more.
But this is the economic climate we’re living in. Toys ‘R’ Us made a valiant effort to right the shift but the changes were misguided and the empire fell just the same. I for one was pleased to see Toys ‘R’ Us mascot Geoffrey the Giraffe had a few job offers and at one point found a new way to delight children. However, recent social buzz states he simply took a hiatus to travel the globe and is behind an effort once again to revive the brand.