A Toy Shop Pops Up in Macy’s
Macy’s and Toys "R" Us announced yesterday that the two companies had reached a deal for the toy retailer to set up shops inside 24 of the department store’s most highly-trafficked locations for the holiday selling season.
Toys "R" Us will lease approximately 1,500 square feet inside of Macy’s beginning on Oct. 15 and ending on Jan. 15. The two companies will evaluate how well the toy shops work and decide if the pop-up concept will be expanded to other locations in the future. Macy’s has 840 stores nationwide.
"Macy’s is a premier holiday shopping destination, and many of our customers have toys on their gift-giving lists. By partnering with Toys ‘R’ Us, the authority in the toy space, we can offer a comprehensive toy assortment and one-stop shopping in this largest gift-giving time of the year," said Jeff Gennette, Macy’s chief merchandising officer, in a statement.
Discussion Questions
Is Toys “R” Us a good fit for Macy’s? Do you see the deal as equally beneficial to both parties? Are there similar deals that you think would make sense between non-competing retailers?
Great idea for both parties.
Seems like a good fit for Macy’s to capture some additional holiday revenue and possibly draw in a customer that may have shopped elsewhere when they realize they can save a trip to TRU.
Why not put a pop up Apple store in Ambercrombie or American Eagle?
I see this as having a high likelihood of success for both companies.
Pop-ups in which one core competency enhances the chance of success for the other without diminishing either brand is a good formula.
While terms of the agreement (staffing, inventory ownership and handling, revenue share) are unknown, department stores were once “one stop” shopping environments before the advent of category killers and discount stores. This provides a revenue stream for both retailers and an added value to consumers during the peak toy selling period of the year.
I’m personally anxious to read about the performance of this arrangement and could imagine other such tie ups in categories, such as electronics, in the future.
This is a potential win for Macy’s and Toys “R” Us. The two retailers do not directly compete, so having TRU outposts in Macy’s could enhance the customer shopping experience for Macy’s, while driving additional revenues for TRU. The only potential negative is in product assortment. If TRU does not offer some of this year’s hot toys, consumers could be disappointed, which could reflect negatively on both companies.
Triple win. Win for Macy’s in that they gain revenue and meet an additional need of their customers. Win for TRU in that they expand their footprint and capture extra sales from an affluent customer base. Win for the consumer who doesn’t have to make two trips.
This makes a ton of sense for both parties: Macy’s wants its shoppers to do as much of their holiday shopping as possible in their 4 walls and see Macy’s as the holiday destination; Toys benefits from incremental toy pick up by customers who might not make a special destination trip to TRU — business they would otherwise lose to mass merchants or online. Macy’s get store within a store revenue, TRU gets a bigger footprint.
Who else makes sense? If I were Macy’s, I would partner with specialty boutique catalogers who don’t have a retail presence today and increase their visibility and sales during the holiday. What about Sports Authority and L.L.Bean? To our discussion yesterday, there are a lot of interesting “frenemy” relationships brewing. It will be fun to watch.
This’ll be a home run for both parties. The synergies for deals such as this are everywhere. Every time I’m on an airline and wind up reading those catalogs in the seatback pockets, I wind up wishing there were a big store that could combine all these niche experts all together. This is already being done with Starbucks in so many supermarkets, and other examples abound. As a trend, I see this growing, adding excitement and incremental revenue for some of the big stores that are having troubles.
“By partnering with Toys “R” Us, the authority in the toy space, we can offer a comprehensive toy assortment…”
Sure, why not? But let’s not carried away; devoting 36,000 of Macy’s 200 million gsf to hi-profile toys is hardly going to be a game changer…for either party.
Macy’s is a top notch retailer that understands how to put a “store within a store.” The concept of the toy store seems like a good idea. Toy’s “R” Us can be a good partner. They are not putting their entire store in Macy’s. Just the right toys.
Smart move for both — getting shoppers in the moment, making it so much easier to get the toys that are top of the list. Right selection, right timing all add up. Saving time and convenience for busy shoppers will drive sales for both.
I love how Toys “R” Us has started thinking outside of the box. This is a great deal for both. Cheers to you!
For old geezers like me, the irony is rich. When I started in retailing, the department stores owned the toy business. Then along came this weird store called Toys “R” Us that took the business away from them. The circle is closed.
It will be interesting to see how Toys “R” us will integrate online in these Macy’s shops given the limited inventory. It could be a smart move in integrating online-offline, staying ahead of Amazon which is at most a 2-day shipping away (and soon may be just hours away from most metros).
It’s a genius move and a win for both parties. And consumers win. Let’s see what other kinds of partnerships come to the forefront.