Sources: Target
Should Target expect something big from its FAO Schwarz toy deal?
Target is hoping for big things from its newly announced multiyear agreement with FAO Schwarz that will give the chain exclusive rights to sell the toy brand’s products within dedicated areas in its stores and on its website.
“One of the reasons families love shopping at Target is because of our incredible assortment of toys, and that selection is only getting better with our new exclusive agreement with the beloved FAO Schwarz brand,” said Jill Sando, executive vice president and chief merchandising officer, Target, in a statement.
Target will gain access to more than 120 toys from FAO Schwarz, with products ranging in price from $9.99 to $149.99. The focus will be on more affordable toys, 50 being priced at under $20. The products, which will be available in stores and online beginning in mid-October, will be featured within Target’s toy departments, using “playful store displays” to draw attention to top toys. Select stores and target.com will also feature toy demonstrations given by Target toy experts throughout the holiday season.
The chain plans to add exclusive product drops from FAO Schwarz throughout the holiday season. The new collection will include “the FAO Schwarz Style Runway 4-Sided Fashion Show Playset, FAO Schwarz Ride On Train, FAO Schwarz Makeup Vanity Mirror Set, legacy Dance on Piano Mat and over 50 new plush toys.”
FAO Schwarz, which is celebrating its 160th anniversary, is also including a collection of nostalgic toys all priced under $25. These include the FAO 160th Anniversary Teddy Bear, Funko Toy Soldier Pop and the Hot Wheels Collector Set.
The two companies worked together for the 2020 holiday season and this new deal suggests that the previous arrangement met the expectations of both parties.
“We are incredibly thrilled to partner exclusively with Target after having forged such a successful relationship together over the past couple of years. There truly is no better way to kick off our 160th anniversary than to announce this partnership,” said David Niggli, chief merchandising officer, FAO Schwarz. “FAO Schwarz has been celebrating the wonder of childhood and bringing awe and discovery to all children — and the child inside all of us — for 160 years, and now families everywhere across the U.S. can enjoy this experience at their local Target store.”
Discussion Questions
DISCUSSION QUESTIONS: Do you expect FAO Schwarz’s toys to be a big contributor to Target’s holiday season performance? Will this deal and other steps Target has taken give it a distinct point of differentiation from its toy competitors in the market?
Poll
Loading …BrainTrust
Mark Ryski
Founder, CEO & Author, HeadCount Corporation
Georganne Bender
Principal, KIZER & BENDER Speaking
Given Target’s existing relationship with Disney, this is a curious announcement. This may be a move to further bolster their toy category position, as not every shopper is a Disney fan. The addition of FAO Schwarz would certainly do that. It could also be a defensive move. Lock up a toy brand so that other retailers can’t acquire/partner with it. Either way, Target will be a major force in toy sales this holiday season.
Smart move. And why not, especially this time of year? After all, Macy’s is already proving the model so, not a lot to lose. This will work.
This is new? Target has carried FAO Schwarz toys for years. The store I frequent has them displayed on gondolas like every other item in the toy department. There might be special signing, and an occasional end feature or platform display, but other than that FAO is just another brand.
Will FAO toys give Target a distinct point of differentiation? Maybe, but in the Midwest where I live I would wager that most consumers don’t even realize how special that brand is. The differentiation comes from what has always made a trip to FAO Schwarz special: ambiance, background music, giant plush you won’t find anywhere else, associates who interact with customers and demonstrate toys. I don’t see that happening at Target.
I had the same response. Target has had FAO Schwarz products in their holiday assortments for a long time.
I guess “exclusive” is the key word here, but that won’t matter much to consumers who are used to buying FAO Schwarz product at Target. Macy’s is still selling FAO toys, but they are listed as “Last Chance” buys. The Big piano is half off on Macy’s website. I just ordered one.
Right Georganne, and you still won’t see it at Target.
I like this collaboration. I hope they really play this up during the holiday season.
I can’t imagine many kids will be adding FAO’s toys to their shopping list.
I remember clearly getting the FAO Schwarz catalog and hungrily going through it preparing my letter to SANTA. I remember my parents taking me to the FAO Schwarz store every holiday season. Indeed, we took our kids to the next reincarnation of the store in Manhattan. Of course, when the Times Square store opened, we took our grandkids. Each connection to FAO Schwarz was magic.
I don’t think FAO Schwarz has that magic anymore. Maybe the deal is nostalgia for the Target management?
(Fifty stuffed toys out of a cohort of 120? How far does that get them?)
Partnering with a trusted toy icon further differentiates Target’s offering with quality and innovation. This move helps Target compete for share against Amazon and Walmart, as Toys “R” Us’ decline left a lucrative gap in this category.
Collaborating with FAO Schwarz and Disney makes Target an even more desirable destination for moms this holiday season.
Is this really all that new? Target had FAO Schwarz toys and some dedicated end-caps last year. Quite honestly, it was nice enough but fairly underwhelming. Maybe the intention is to get more creative with merchandising this year, which would be good. All that said, this is a good move which helps Target bolster its toys offer at a time when the market is becoming more competitive.
They could be doing so much more with the Disney and FAO Schwarz assets. I think they could be very successful in driving greater volume with greater investment here. But will they?
The toys category has undergone quite a disruption, with the bankruptcies and reemergence of Toys “R” Us and FAO Schwarz. As these brands have reemerged, they established partnerships with Macy’s and Target, respectively, to take advantage of both retailers’ size and scale. While Toys “R” Us and FAO Schwarz have undergone their evolutions, Lego, Disney and others have continued their aggressive DTC strategies focused on driving outstanding customer experiences.
As we enter the holiday season, Target will undoubtedly be one of the forces to be reckoned with within the changing toy sector landscape. Target continues to evolve to be the one-stop shop for all your family’s needs. Having a significant presence in the toy space is an excellent strategic move.
Target has been a leader in the toy category for a long time. When Toys “R” Us closed, they moved aggressively to expand their toy category and went after the holiday season. Target has been outstanding at partnering with brands and designers that they feel will resonate with their customers, and FAO Schwarz does that well. Adding to a toy assortment with solid presentations from Disney, Mattel, and Lego, FAO Schwarz is another win that helps establish Target as a leader in the category.
Many retailers are vying for the toy market given the vacuum left by Toys “R” Us. Target’s partnership with FAO Schwarz makes a lot of sense, further bolstering Target as a toy destination especially in more upmarket vs. mass toys. However the sheer volume of toy sales for Target will not see a direct impact from SKU volumes of FAO Schwarz. If the market perception changes demand across their toy category it could be meaningful, but it will be impossible to attribute. And it depends on how they leverage it for marketing and in-store execution. If the Disney partnership execution is any indication, it’s likely that this will be an underutilized marketing asset in-store. They could be doing so much more to create a toy destination even as a big box store. This is a good idea whose value depends on a level of execution Target haven’t exhibited in toys — yet.
For this to really move the needle, I hope Target and FAO Schwarz are giving careful thought to the experience side of this collaboration. The magic of FAO Schwarz was always as much about the experience as the assortment, and it feels like there is an opportunity to restore some of that magic in Target’s aisles, if they have budgeted for it.
To be obvious, toys are for gift giving occasions and their selection is highly influenced by who is receiving the gift. Do you think kids ask their parents for a special toy from FAO Schwarz? Nope. I would think the toy merchants at Target are scratching their heads. There are plenty of suppliers that want shelf space at Target. Outside of NYC does anyone really care about FAO Schwarz? P.S., I loved the “dancing on a piano” scene in Big!
It is great to see an iconic brand like FAO Schwarz live on, and with a retailer who executes at the highest level.
Will it be a big contributor to Target’s holiday season? That’s a bit more tricky to forecast, primarily because the FAO brand has had such a diminished presence over the last several years.
My concern is there’s now an entire generation of kids and their parents who aren’t aware of the FAO brand cache, and may simply overlook it for the trendier or more widely known toy brands they are accustomed to buying as gifts.
This relationship will likely provide an incremental lift, but more importantly, be another reason for shoppers to make Target their toy destination.
Target’s toy focus has drifted substantially in the post-TRU years and the retailer hasn’t shown the kind of consistency they excel in for clothing and softlines: first they were focusing on unique and mostly made-in-USA specialty vendors; then it was a shift to depth from Lego and Hasbro; then baby and early-childhood; then to tabletop and collectible card gaming. Now Disney and FAO. If we only had the ability to post meme photos here….
This is a smart move and to me, speaks to a smart strategy around demographics. FAO Schwarz is a nostalgic brand for certain age groups, less so for younger ages which are already served well by Target (including their Disney partnership). I see this as expanding the reach of Target’s toy department in a positive way and should help them secure more market share across toys. Although not new — I’m sure Target has been selling FAO Schwarz before, just not exclusively — this is s good strategic move.
I applaud this for two reasons: 1.) FAO Schwarz is a valuable asset (even in name alone) and will certainly attract attention within Target; and 2.) the toy category remains fragmented and Target is staking claim to be “in the game” (and they’re in it to win it!).
Target serves as the right platform as it delivers excellent customer experience and also has a relatively high customer footfall. The partnership will be even more rewarding as customers will begin their shopping for the holiday season. Additionally, Target’s creative strategies and live in-store demonstrations will definitely aid in attracting customers. So, it’s a win-win situation for both Target and FAO Schwarz toys.