Why is Target helping Toys “R” Us get back online?

Discussion
Sources: Target; Toys "R" Us
Oct 09, 2019
George Anderson

Retailers in the U.S. have been scrambling to fill the void left since Toys “R” Us shuttered hundreds of stores and its website in the U.S. last year. Target, according to reports, has been among the most successful in picking up share previously held by its once competitor.

Yesterday, the mass merchandiser and Tru Kid Brands, parent company of Toys “R” US, announced that Target is providing product, digital capabilities and fulfillment for orders that originate on toysrus.com. What is Target thinking?

The toysrus.com site itself does not offer shopping. Instead, visitors will be able to find reviews and videos on the latest toy brands and trends. Consumers who come across a product they want to purchase will be able to click “Buy now at Target.com” to be sent to a corresponding page to complete their order.

“Target’s leadership in toys, digital and fulfillment are an unbeatable platform for Toys ‘R’ Us to reconnect with their fans while we introduce them to the ease and convenience of shopping at Target,” said Nikhil Nayar, senior vice president of merchandising, Target, in a statement. “By applying our capabilities in a new way with Toys ‘R’ Us, we can serve even more toy shoppers, drive new growth, and build on our toy leadership.”

“Our U.S. strategy is to bring back the Toys ‘R’ Us brand in a modern way through a strong experiential and content-rich omnichannel concept,” said Richard Barry, CEO of Tru Kids. “The foundation of that strategy requires the help of a retail industry leader and Target is the ideal retailer to support a new Toys ‘R’ Us shopping experience, which is designed to provide families with endless ways to discover, play and enjoy toys.”

Tru Kids announced in July that it plans to open two stores — one in Houston, TX and the other in Paramus, NJ — in time for the Christmas shopping season. The small store units — around 6,500-square-feet — are being developed as part of a joint venture with b8ta, a retail-as-a-service startup focused on providing consumers access to try new products before making a purchase.

The new stores are being designed to be highly interactive, giving kids and parents the ability to test products before they buy. The locations will offer new events and activities on a regular basis and include open play space. Brand stations will enable kids to learn through play using “STEAM” (Science, Technology, Engineering, the Arts and Mathematics).

DISCUSSION QUESTIONS: What do you think Target will get out of working with Tru Kids to relaunch toysrus.com? Is this a smart way for Toys “R” Us to reestablish itself as a retail brand?

Please practice The RetailWire Golden Rule when submitting your comments.
Braintrust
"My suspicion is that Target is either looking to purchase Toys 'R' Us or launch their own private label brand for toys."
"Target now owns toys, and the pre-purchase toy experience. And if you own toys, you own Christmas."
"All I need to read is “joint effort with b8ta,” “highly interactive,” and “STEAM” and I am thumbs up on the potential for this venture."

Join the Discussion!

12 Comments on "Why is Target helping Toys “R” Us get back online?"


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Mark Ryski
BrainTrust

Target is looking to become a powerhouse in the toy category, and the partnership with Tru Kids, along with the recent partnership with Disney will help enable this aspiration. The reincarnation of Toys “R” Us is too small to compete against Amazon, Walmart and Target. Partnering with Target at least gives them a channel to build volume and that’s an important objective. Ultimately, this sounds like a test drive for an acquisition of some kind by Target of the Tru Kids assets – they’ll get to test drive it this year. Smart move for Target; understandable move by Tru Kids.

Art Suriano
BrainTrust

This strategy is not what one might expect, but I see this as a very positive opportunity. Target is a highly respected company, one that consumers love and trust. Toys “R” Us was a company that had a considerable audience spanning decades, with many customers having fond memories of shopping there when they were kids, as parents, and even as grandparents. Many people are supporting the comeback of Toys “R” Us. So Target helping with online fulfillment will get positive press and a great feeling from customers. Moreover, Target may have other plans with Toys “R” Us behind the scenes for future joint ventures, which could be anything from Toys “R” Us departments in the Target stores to further online involvement. The partnership between Target and Toys “R” Us is business, but “good” business where Target, Toys “R” Us and, most importantly, the customer will come out ahead.

Neil Saunders
BrainTrust

This is great for Target: they get the sales from the online part of Toys “R” Us and also pick up some sales for products ordered in store. They will also likely pick up some new customers and the data on them. Given that Target is already doing well with kids categories, this will just help boost their credentials and market share further. It is very low risk too; the only downside being if Toys “R” Us subsequently wants to go it alone – but I would assume this is addressed within the agreement between the two companies.

For Toys “R” Us, this partnership is probably the simplest route to market. They are able to piggyback on another retailer’s online systems, its inventory and its logistics. To reinvent all of that themselves would have been expensive. It does make them reliant on Target, which is never a conformable position to be in. However, this is a shortcut to market that allowed them to make a quick comeback.

Dick Seesel
BrainTrust

I see this leading toward a TRU-branded toy department inside Target. There is no other apparent reason (at least, not that I can figure) for Target to lend a helping hand to a onetime key competitor. Target has grown its toy footprint since the demise of Toys “R” Us, and a deeper collaboration gives it some competitive advantage over Walmart and Amazon.

Meaghan Brophy
BrainTrust
Meaghan Brophy
Senior Retail Writer
1 month 29 days ago

The Toys “R” Us/Target partnership seems like a win for Target. I’d be curious to see what portion of the sales revenue the company is keeping. This move also solidifies Target as a destination for toy buying and gives them access to data on what Toys “R” Us shoppers are purchasing. My suspicion is that Target is either looking to purchase Toys “R” Us or launch their own private label brand for toys.

Lisa Goller
BrainTrust

Target is already winning moms’ hearts with strong toy and kids’ apparel departments and affordable pricing. Adding variety with Toys “R” Us’ assortment would make Target even more appealing and convenient for these influential consumers.

David Weinand
BrainTrust

I see this as a much bigger coup for Tru Kids than Target but for Target, it is a fresh new channel to drive incremental toy sales. It will be interesting to watch.

Jeff Sward
BrainTrust

This joint effort between Target and Toys “R” Us has every opportunity to be a win on multiple levels — for Target, for Toys “R” Us, and for the customer. It is very accurate to say that Toys “R” Us was not the competitor that they could have been/should have been in the last several years. And I have read elsewhere that this initiative is flawed in its current execution, but I am viewing that as life support to keep the brand alive during the coming holiday season until a more concrete platform can be established for the years ahead. All I need to read is “joint effort with b8ta,” “highly interactive,” and “STEAM” and I am thumbs up on the potential for this venture.

Liz Crawford
BrainTrust

Smart for Target. They are not only buying the brand name, but also the market of shoppers who are looking for a deep array in the toy category. Target now owns toys, and the pre-purchase toy experience. And if you own toys, you own Christmas.

Ananda Chakravarty
BrainTrust

$27 billion. For starters. It’s the size of U.S. retail toy sales ca. 2017, with 7 percent growth even as Toys “R” Us was crumbling under debt pressures. The many players who’ve been scrambling to pull in Toys “R” Us’s customers expand to just about all the major retail multi-merchant stores. It was inevitable that some major player would pick up the branding of an iconic name tied to this industry. Target’s move is win-win. Toys “R” Us would most likely return on top of a more efficient retail model and Target is a perfect choice.

Patricia Vekich Waldron
Staff

This is Target’s second partnership with a family-friendly brand – Toys “R” Us and Disney – which put desired products into the hands of their core customers. I’m staying tuned for more of these types of relationships.

Casey Golden
BrainTrust
1 month 28 days ago

Buying toys on Amazon is not as common as I would have thought due to counterfeits and poor quality when it comes to safety concerns. Toys “R” Us and Target are trusted brands. A strategic partnership makes sense and could corner the market.

wpDiscuz
Braintrust
"My suspicion is that Target is either looking to purchase Toys 'R' Us or launch their own private label brand for toys."
"Target now owns toys, and the pre-purchase toy experience. And if you own toys, you own Christmas."
"All I need to read is “joint effort with b8ta,” “highly interactive,” and “STEAM” and I am thumbs up on the potential for this venture."

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