Dive Brief:
- The new Toys R Us is relying on Target and its website to power its e-commerce sales.
- After more than a year of effective dormancy, the ToysRUs.com e-commerce site re-launched on Tuesday. The website includes product reviews, new toy lists, do-it-yourself activity ideas and other features. To actually buy toys, though, shoppers are directed to product pages on Target's website. The mass merchant then will complete transactions and fulfill products out of its inventory for ToysRUs.com shoppers.
- Associates in the new Toys R Us stores, which open this year, will also help customers purchase products not available in the store from Target's website, according to a press release announcing the partnership.
Dive Insight:
Tying up with Target gives the new — and still very small — Toys R Us scale ahead of this year's holiday season, the second since the big-box incarnation of the toy retailer liquidated in bankruptcy. For Target, it gives brand weight to its expanded toy efforts, much like its recent partnership with Disney to open store-within-a-store concepts at some Targets.
Richard Barry, CEO of Tru Kids, which owns the Toys R Us brand property, said in a statement the company's domestic strategy is to "back the Toys"R"Us brand in a modern way through a strong experiential and content-rich omnichannel concept" and called Target the "ideal retailer" for the brand to work with.
"This initiative continues Target's enhanced focus on the toy category, which ramped up significantly following the bankruptcy and subsequent liquidation of Toys R Us," Moody's retail analyst Charlie O'Shea said in emailed comments, adding that the partnership "will provide Target with more weapons in its arsenal as it competes for leadership with Walmart and Amazon in this all-important category this season."
Tru Kids relaunched Toys R Us this year through a joint venture with b8ta that includes two new stores under the revived brand, with more potentially on the way. The stores are experience- and events-focused and much smaller than the massive Toys R Us boxes that customers are familiar with and likely helped doom the retailer in recent years. The new stores are also more of a showroom, with vendors retaining product sales and paying fees to Toys R Us for space.
Target's involvement is somewhat ironic, given that the mass merchant played a leading role, along with Walmart and Amazon, in Toys R Us' fall from category supremacy. Each of those players undercut Toys R Us on prices, including in the disastrous 2017 holiday season that led to the old Toys R Us' demise, and have happily captured the toy retailer's market share after it exited the stage.
Nothing has changed this year on that front. Target said in September it was adding 10,000 new and exclusive toys as it tries to hold on to its expanded piece of the toy pie.
Another irony: Nearly two decades ago, Toys R Us partnered with Amazon to boost its online sales. That partnership ended in lawsuits and acrimony.
The tie-up is yet another sign the new Toys R Us is less a traditional retailer than a dynamic marketing vehicle, relying on vendor and retail partners rather than inventory sales for profit.
