The nation’s largest specialty toy retailer is preparing for the coming holiday season with the introduction of a new ‘hot toy" reservation system in all of its stores.
The coming holiday season is always crucial for toy retailers as that one season alone can account for up to 40 percent of their total annual sales. In preparing for the holidays, the largest specialty toy retailer in the U.S. has announced plans to improve services like layaway and ship-to-store, as well as offer more exclusive toys. Toys R Us CEO Jerry Storch said his company is ready and entering the holiday season with lean inventories and strong profit margins because Christmas will come and parents will buy their children toys, no matter what the state of the economy is. Storch said “I can't predict the economy, but the last thing parents cut back on is toys." However, one thing that is different this year is that Toys R Us is now adding a "hot toy" reservation system.
The reservation system works in conjunction with the firm’s annual list of 50 'hot toys' and interested customers will have to put down 20 percent of the retail price to reserve a toy. The toys must be reserved inside Toys R Us stores and customers will receive an e-mail notification telling them when their order is available and they will have until December 16th to pick up the item in store. Toys R Us says the concept was developed in order to help customers avoid a frantic last-minute search for the most popular toy like 2009's Zhu Zhu Pets stuffed hamsters and last year's Leapfrog LeapPad tablet which ran out of stock quickly. The giant toy retailer is facing increased competition from discounters and online retailers this year and hopes measures like the hot toy reservation program, the layaway program and its new ship-to-store program will all help draw more customers into its stores over the holiday season.
Toys R Us CEO Storch also said he thinks the media has overplayed the problem of “show rooming” where customers browse the items and prices in brick and mortar stores, and then resort to buying the items online or from discounters with the lowest prices possible. Storch said "There's a narrative out there that facts don't support," when he pointed out research data that showed Toys R Us gained more market share than discount merchants like Target and Wal-Mart and online retailers like Amazon.com combined during the January to July 2012 sales period.
Other holiday plans include adding more exclusive lines that can only be found at Toys R Us stores, including a line of clothing and baby products under the Heidi Klum name, and a line of Legos for an older 11- to 16-year-old demographic called Technic. Toys R Us is also has plans to increase the number of products it sells under its Babies R Us brand. Toys R Us operates 875 Toys R Us and Babies R Us stores in the U.S. and Puerto Rico, and has more than 635 international stores and 145 licensed stores worldwide. In addition, the company plans to open 150 to 200 temporary stores intended to meet the holiday rush period, similar to the number of temporary stores it opened last year at this time.
