Toys ‘R’ Us is hoping it can persuade consumers to do a good portion of their Christmas shopping in September and October, with incentives to encourage early purchases.
The Wayne, N.J.-based retailer is using those strategies, and others, to gain an edge in the cutthroat competition that is holiday toy sales. Toys ‘R’ Us depends on the holiday fourth quarter to earn nearly all of its profit for the year. Its top competitors — Wal-Mart and Target — use heavily discounted toys to lure parents they hope also will shop for higher-margin items.
Company executives at a media event last week in New York said consumers have told them they want to avoid the last-minute rush. So they are making it easier for consumers to do so, with an extended return policy for unwanted toys and cash rewards for purchases before Oct. 31.
“We’ve put together a comprehensive package of benefits for early shoppers to motivate them to shop with us,” said Richard Barry, chief merchandising officer for Toys ‘R’ Us. Those include special discount coupons for loyalty club members to use in September, and cash-back incentives for purchases in September and October.
Getting customers in stores early makes it less likely they will buy elsewhere. The National Retail Federation has noted that stores that get shoppers in the doors first usually get the biggest part of the shoppers’ holiday budgets.
Toys ‘R’ Us is heading into Christmas 2013 after a disappointing holiday in 2012, when sales at U.S. stores declined 4.5 percent compared with the same period in the previous year.
A month after those results were announced, the company said it was withdrawing a stock offering that had been in the works since the company was taken private in 2005 in a $6.6 billion leveraged buyout, and the chief executive stepped down.
Toys ‘R’ Us, which employs 70,000 workers in more than 1,500 stores worldwide, unveiled the first phase of its holiday game plan last week at events for the media and analysts at its Times Square flagship store.
Executives said they plan to roll out additional marketing strategies throughout the holiday season The company doesn’t want to tip its hand to the competition by unveiling all of its holiday plans too early.
There also was no news about the next chief executive. CEO Jerry Storch left that job in February but remains as chairman. The company has been conducting a search for a new CEO, with Antonio Urcelay, the head of the company’s international operations, serving as interim CEO.
Toys ‘R’ Us also is hoping to draw shoppers this year with an offer to match prices at the leading online websites, and by creating “hot price” deals on different toys throughout the season.
All of the company’s U.S. stores will have a display installed to showcase the 25 different types of kid-friendly tablet computers Toys ‘R’ Us will sell this year. The displays will feature working models of the tablets that shoppers can try out, similar to the displays in an Apple store.
Toys ‘R’ Us will sell an enhanced version of Tabeo, its private-label tablet that was a hit last year. The “e2” version of the $149 device has a larger screen, more memory, and built-in Bluetooth for wireless links to speakers and other accessories.
The company also showcased products that will be sold exclusively in its stores this holiday season, including a ride-on scooter by Razor and a new line of toys featuring the kiddie musical group the Wiggles.
Toys ‘R’ Us plans to open 200 “pop-up” or temporary stores this holiday season, about the same number it opened last year.