Want a train set with that designer gown? Or a teddy bear with your fishing gear?
“The holidays are hands down the most important time of year for retailers as we compete for every dollar leading up to Christmas morning,” John Tighe, executive vice president of JCPenney, said in a statement this week. “By partnering with a toy icon like Lego, JCPenney is well-positioned to capture a greater share of revenue within the toy industry.”
Toy sales have always been critical during the holiday season, but analysts say the stakes are particularly high this year following Toys R Us’s recent bankruptcy filing. The toy chain has struggled in recent years to keep up with competition from Amazon.com, Walmart and Target, and analysts say its performance in coming weeks could have long-term implications for the debt-ridden chain. Toys R Us typically makes about 40 percent of its annual sales during the holidays, and this year has created in-store “Play Labs” where shoppers can try out new products. (Jeffrey P. Bezos, the founder and chief executive of Amazon, owns The Washington Post.)
“Toys R Us is getting crushed on both sides,” said Sucharita Mulpuru, an analyst for Forrester Research. “Not only is the competition online, but now you’re seeing department stores and specialty retailers encroaching on their space, too.”
Walmart this week announced that it is doubling down on the toy business by tripling its selection online. The company will also host a series of toy “parties” at its stores on Saturday, where it will encourage children to test out the season’s popular toys and take selfies with Santa. Steve Bratspies, the company’s chief merchandising officer, said this week that the toy department is “really important” to the company because it “maintains a high level of engagement with the customer.”
“Toys are a tremendous traffic-driver during the holiday season, which is why all kinds of non-traditional retailers are getting involved,” said Charlie O’Shea, an analyst for Moody’s. “But every time Bass Pro Shop or Walmart sells a toy — guess what, Toys R Us just lost a sale.”
Traditional retailers are increasingly adding toys to their holiday lineups, analysts said, because it can help bring in new customers — and their families — and convince existing ones to pick up an extra item or two during shopping trips. Those impulse purchases could prove particularly important this holiday season, analysts said, as many big-name retailers struggle to swing a profit.
“In this climate, retailers have no choice but to be increasingly nimble,” Mulpuru said. “They’re stocking their shelves with whatever sells, whenever it sells.”
At Build-A-Bear Workshop, executives say they’ve spent the past several years coming up with alternatives to their traditional 3,000-square-foot mall stores. They’ve begun opening smaller, free-standing shops in urban areas to keep up with Americans’ changing tastes. This holiday season, the niche retailer has gone a step further, teaming up with Bass Pro Shops — a chain known more for hunting and camping gear than for cute plush toys — for the holidays.
“There’s no single formula anymore,” said Sharon Price John, president and chief executive of Build-A-Bear Workshops. “We’re on cruise ships, we’re in Bass Pro Shops. Nobody knows what’s going to happen in retail, so we’ve had to think beyond the 10-year lease at the mall.”