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Who Will Fill the Void Created by Toys "R" Us This Christmas?

The absence of Toys "R" Us has resulted in retailers bolstering their toy, baby and game sections ahead of Christmas.

Christmas is approaching and the toy market is expected to once again open opportunities for retailers. Understandably, the void created by Toys “R” Us has opened up a new retail war zone. However, experts believe that if shoppers are planning to buy toys at the last minute, they might probably have to return empty handed.

The absence of Toys “R” Us definitely has opened up a huge opportunity for retailers but the loyalty is yet to shift to any one retailer yet. That said, retailers are leaving no stone unturned to make the most of the opportunity.

Can Others Fill the Gap?

With Christmas around the corner, the toys war seems to be intensifying with all major retailers rushing in to fill the void. However, despite this extra push, the loyalty that Toys “R” Us commanded is yet to shift to any one retailer. Hence, consumers this year are making shopping decisions based on factors like location, delivery time, availability and price.

Per a recent study by commerce marketing service provider Criteo, Amazon.com, Inc. AMZN is leading the race, with 34% choosing the e-commerce giant to shop for toys. Walmart, Inc. WMT comes second with 31%.  However, experts believe that if consumers are planning to buy toys at the last minute they might probably have to return empty handed.

Per market tracking firm NPD Group, almost 50% of the sales of the $20.7 billion take place during the holiday season, with business getting busier close to Christmas. Toys “R” Us accounted for roughly 12% of domestic toy sales in 2017. And one of the major reasons behind the iconic toymaker’s success was the last-minute dependability.

However, the business strategies of most retailers reflect that the focus is on the holiday season. Even big players like Hasbro, Inc. HAS and Mattel, Inc. MAT doubt if much products will be left on their hands after the New Year.

Retailers Ramp Up Their Toy Sections

The absence of Toys “R” Us has resulted in retailers bolstering their toy, baby and game sections ahead of Christmas. Amazon was already biting into the market share of Toys “R” Us. This year, Amazon has gone retro, mailing its first-ever print toy catalogue, much like Toys “R” Us used to do. Also, the company has come up with a dedicated landing page for children on its website and catalogue.   

On the other hand, both Target and Walmart are devoting more shelf and floor space in their retail locations. Walmart has increased the number of toys by 30% in its stores and 40% online this holiday season. The company is expected to bank on the popular Ryan’s World collection along with the collection of Fortnite toys, which debuted on Dec 1.

Target Corporation TGT has also almost doubled the space of its toy departments this year, adding 250,000 square feet. The Kroger Co. KR is trying to cash in on the Toys “R” Us nostalgia. The grocery chain has entered into a partnership with the hedge fund owners of Toys “R” Us brands to bring back Geoffrey’s Toy Box section. Amazon, Walmart, Target, Kroger and Mattel, each carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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Amazon.com, Inc. (AMZN) : Free Stock Analysis Report
 
Walmart Inc. (WMT) : Free Stock Analysis Report
 
Target Corporation (TGT) : Free Stock Analysis Report
 
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Mattel, Inc. (MAT) : Free Stock Analysis Report
 
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