NEW YORK—Toy retailers are already preparing their sales strategies for the upcoming holiday season, vying for consumers’ dollars early in a weak economy.
Toys ‘R Us released its new marketing campaign, promoting exclusive products from MyKeepon, Moshi Monsters, The Trash Pack, and Air Swimmers. New initiatives this holiday season consist of a 44-paged catalog showcasing the retailer’s products, as well as print ads and in-store and online boutiques.
In 2010, Toys ‘R Us earned approximately 43 percent of its $13.57 billion revenue in the fourth quarter, which is typically the most profitable quarter for retailers. It competes against larger discount retailers such as Wal-Mart Stores Inc. (NYSE: WMT), Amazon.com (Nasdaq: AMZN), and Target Corp. (NYSE: TGT). The specialty retailer manages to combat the low prices offered by its competitors by directing attention to specific Toys ‘R Us-only products, as well as maintaining strong online growth.
Last year, Toys ‘R Us observed a 30-percent increase in online sales, amassing $782 million, and saw an overall increase in sales of 2.2 percent, bringing the total to $13.9 billion. Along with offering a pick-up option in stores, the company opened a distribution center in July 2011, catering specifically to online orders.
Meanwhile, Amazon released stricter guidelines for sellers in order to meet the demands of holiday shoppers and improve the consumer experience.
Toys ‘R Us CEO Gerald Storch noticed a decline in video game sales, pulling the overall same-store sales lower. However, he stated that the company “can still deliver a strong bottom line, even if video game has an impact on our [sales].” He predicts that Nintendo’s release of the Wii U touch-screen game controller will boost video game sales next year.
While Toys ‘R Us plans to hire the same amount of seasonal workers, discount retailer Target Corp., which had over 92,000 seasonal workers in 2010, expects to be one of the few companies to hire even more this year in anticipation for the holiday shopping rush.
Wal-Mart will restart its layaway plan with restrictions and fees beginning on Oct. 17, to help minimize costs and problems it faced in general merchandise layaway.
Wal-Mart has approached the holiday season boldly, slashing prices on numerous toys, including Leapfrog Scribble and Write, Disney Princess Toddler Doll, Hasbro Inc. Transformers 3, Mechtech, and certain Lego sets, to $15. Usually these toys sell for $20, but Wal-Mart, known for undercutting its competition, has started its “rollback” early.
Toys ‘R Us had intended to issue an initial public offering (IPO) this year and last filed an amendment to its IPO plans in June, worth around $800 million. However, the volatile financial market has discouraged further action.
