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.
