Retailers Fill the Gap Left by Toys 'R' Us in Time for the Holidays

There is no softening the impact of the Toys 'R' Us liquidation earlier this year, which led to the closing of more than 800 stores and the loss of approximately 32,000 jobs—not to mention the pang that many former kids of a certain age felt at the loss of a childhood touchstone. The giant toy retailer had been a staple throughout the world for generations of children since being founded in 1948.With a staggering $5 billion debt load, Toys R Us was facing its apparent end. However, now the owners of the company’s remaining assets are looking into restarting the brand, as well as its spinoff Babies 'R' Us.Even if Toys R Us was able to make a comeback at some point, the holiday season is upon us and the entire industry is scrambling to fill the giant void. Many retailers are looking to capitalize on the massive opportunity left by of Toys 'R' Us, attempting to win over parents and kids with fun shopping experiences as the first holiday season in decades without the toys retail giant quickly approaches.[caption id="attachment_3239" align="alignnone" width="1280"]

FAO Schwartz is back, with a pop-up in NYC this holiday season. shared this rendering of shoppers can expect.[/caption]

FAO Schwarz

Next to Toys ‘R’ Us, there may be no toy retailer more storied than FAO Schwarz. The 45,000-square-foot, three-story store on Fifth Avenue was closed in 2015, but the company is bouncing back, opening a 20,000-square-foot pop-up shop at Rockefeller Plaza on Nov. 16, just in time for the 2018 holiday season.Nostalgia will likely drive many shoppers to the store, but the retailer is looking to emphasize a more interactive experience. Plans include product demonstrations, magicians, characters in dressed up as toy soldiers, and of course, a giant floor piano for music and dancing.


The arts and crafts supplier is also getting in on the action by launching and filling the site and its stores with more than 600 new items, including products from Crayola, LEGO, Play-doh, Nerf, Barbie, Hot Wheels, and Orb. Michaels is focusing on “creative play,” offering kids and their parents the option to create their own projects or assemble toys that don’t need electricity to be enjoyable. The store will also promote crafting events in stores for both parents and children. Michaels will also simplify store layouts to clearly define where shoppers can locate kid-friendly items. Michaels is confident its unique customer experience will appeal to parents of young builders and artists for the holidays.[caption id="attachment_3236" align="aligncenter" width="550"]

Target ramps up its toy section with In-store play spaces like this one, just in time for the holidays. Photo courtesy of Target.[/caption]


In a recent blog post, Target made clear its intentions to make an aggressive push in the toy market this holiday season. Not only will Target more than double its usual holiday toy inventory (with over 2,500 new and exclusive toys), but it’s also clearing a quarter-million square feet across 500 stores to make room for the additional merchandise and in-store events for children and families.Target also plans to over 25,000 hours of family-friendly events in their stores, where kids can test out toys, win giveaways, interact with popular characters from PAW Patrol, Minecraft, L.O.L. Surprise! and more. To simplify the shopping experience for parents, Target is sharing its “2018 Top Toys” which breaks down the holiday’s most popular toys, highlighting everything from Target exclusives, nostalgic toys and even tech-centered toys.

Party City

Michael’s isn’t the only retailer traditionally not known for toys looking to capitalize on the the void left by Toys 'R' Us. Party City opened up 50 pop-up “Toy City” shops alongside its Halloween City pop-up shops in optimal markets. The Toy City stores opened in September and will run through the holiday season.This represents the company’s largest expansion into toys, with inventory accounting for approximately 33% of the entire store. Toy City will feature interactive displays and demos, with the goal of creating a dynamic shopping experience, especially for younger shoppers.


In addition to increasing its in-store toy selection by as much as 30 percent, Walmart is also focusing on creating an interactive, dynamic toy shopping experience for children and parents. In-store events such as National Play Day, which was held on the first week of September at more than 1,500 stores, allow children to play with toys, pose for pictures and enter giveaways. Walmart plans to continue in-store demonstrations nationwide through November 1.

It’s all about the experience

Toys R Us left a sizeable gap in the market, given that it accounted for 10–15% of toy sales last year.It’s no surprise competitors are looking to take advantage this holiday season by creating a memorable shopping experience for everyone. For children and parents alike, playing with toys can create lasting memories, and retailers in this space play a vital role in fostering those connections. The ones that create these moments will find the greatest holiday success. To learn how you can you can win customers this holiday season — and keep them long after it’s over, watch our webinar “Making Holiday Count: Retaining Customers Beyond Peak.”

Tamara Stanley

Tamara is Narvar's Senior Content Marketing Manager, bringing more than 15 years of content creation experience for big brands, including Bright Horizons, Salesforce, and Slack.

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