This holiday season, shoppers won’t have to look far to find the year’s coveted toys, as retailers and toy makers forge unlikely alliances to win over consumers.
Want a train set with that designer gown? Or a teddy bear with your fishing gear?
This holiday season, shoppers won’t have to look far to find the year’s coveted toys, as retailers and toy makers forge unlikely alliances to win over consumers. High-end department stores like Bergdorf Goodman and Bloomingdales are selling toys by FAO Schwarz, while Bass Pro Shops is opening mini Build-A-Bear shops inside its sprawling outdoors goods stores. At J.C. Penney, shoppers will soon find Legos alongside racks of leggings.
“The holidays are hands down the most important time of year for retailers as we compete for every dollar leading up to Christmas morning,” John Tighe, executive vice president of J.C. Penney, said in a statement last week. “By partnering with a toy icon like Lego, J.C. Penney is well-positioned to capture a greater share of revenue within the toy industry.”
The alliances come as the toy industry digests the implications of a bankruptcy filing by Toys R Us before the critical holiday season. Chief Executive Dave Brandon has sought to reassure shoppers that the retail giant will remain open as the chain works to restructure its finances — it’s even rolling out so-called “Play Labs” at select stores to let children try out hot toys. But that hasn’t stopped toy makers from fretting about what might happen if the major distributor stumbles.
The toy chain has already struggled in recent years to keep up with competition from Amazon.com, Wal-Mart and Target, and those rivals show no signs of easing up. (Jeff Bezos, the CEO of Amazon, owns The Washington Post.)
“Toys R Us is getting crushed on both sides,” said Sucharita Mulpuru, an analyst for Forrester Research. “Not only is the competition online, but now you’re seeing department stores and specialty retailers encroaching on their space, too.”
“Toys are a tremendous traffic driver during the holiday season, which is why all kinds of nontraditional retailers are getting involved,” said Charlie O’Shea, an analyst for Moody’s. “But every time Bass Pro Shop or Wal-Mart sells a toy — guess what, Toys R Us just lost a sale.”
Traditional retailers are increasingly adding toys to their holiday lineups, analysts said, because it can help bring in new customers — and their families — and persuade existing ones to pick up an extra item or two during shopping trips.
Those impulse purchases could prove particularly important this holiday season, analysts said, as many big-name retailers struggle to swing a profit.
“In this climate, retailers have no choice but to be increasingly nimble,” Mulpuru said. “They’re stocking their shelves with whatever sells, whenever it sells.”
At Build-A-Bear Workshop, executives say they’ve spent the past several years coming up with alternatives to their traditional 3,000-square-foot mall stores.
“There’s no single formula anymore,” said Sharon Price John, president and chief executive of Build-A-Bear Workshops. “We’re on cruise ships, we’re in Bass Pro Shops. Nobody knows what’s going to happen in retail, so we’ve had to think beyond the 10-year lease at the mall.”