The Wall Street Journal reports that Toys R Us’s demise “has left billions of dollars in holiday toy sales up for grabs,” which means that Walmart, Target, Party City and, of course, Amazon, all are pulling out the stops to try to claim some of that business. Amazon, in fact, will be distributing toy catalogs at its Whole Foods stores, hoping this will give it a leg up on the competition.
However, the story notes that this competition also could create a structural shift in the toy business. It seems likely that these competitors will stock “a selection focused on the most popular items and the best-known brands, with supplies dwindling during the final week.” If this happens, it is likely to create some consumer discontent, because “that is when shoppers flock to buy toys, despite efforts by retailers to promote shopping earlier by offering discounts.”
When Toys R Us was in business, the Journal writes, it could afford to stock up on a broad range of toys and games for the last few weeks of the end-of-year holiday shopping season, knowing that whatever it didn’t sell could remain on its shelves and be sold in subsequent months.
However, the story notes that this competition also could create a structural shift in the toy business. It seems likely that these competitors will stock “a selection focused on the most popular items and the best-known brands, with supplies dwindling during the final week.” If this happens, it is likely to create some consumer discontent, because “that is when shoppers flock to buy toys, despite efforts by retailers to promote shopping earlier by offering discounts.”
When Toys R Us was in business, the Journal writes, it could afford to stock up on a broad range of toys and games for the last few weeks of the end-of-year holiday shopping season, knowing that whatever it didn’t sell could remain on its shelves and be sold in subsequent months.
- KC's View:
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On the other hand, based on the fact that Toys R Us had enormous debt and went bankrupt, maybe it couldn’t afford to take that approach. It thought it could, but missed the signals that should have told it that a consumer behavior shift was taking place.
I mean, think about it for a minute. Toys R Us did $2 billion in sales during the last two months of 2017, and its cost structure was so out of whack that it still couldn’t stay in business.
It may be painful in 2018, but maybe this new structure will educate people that they ought to do their holiday shopping early and not procrastinate. (Yeah, I know. Not likely.)
