Dive Brief:
- Target and Walmart are both alluding they will make a push on toy sales this holiday season now Toys R Us is out of the picture, according to various reports.
- "Toy volume is up for grabs," Walmart's Chief Merchandising Officer Steve Bratspies said at the company's annual shareholder meeting, according to Internet Retailer. The comments were made as he explained how Walmart's website redesign would capture new customers.
- "Our teams in toys and baby have increased their inventory investment to ensure that we can meet higher demand as other competitors liquidate and exit these categories," said Target EVP and COO John Mulligan in an earnings call.
Dive Insight:
Toys R Us' bankruptcy left the toy industry reeling, as toymakers like Hasbro and Mattel suffered multimillion dollar losses or closed offices after one of their main buyer outlets closed down.
The bankruptcy initially raised questions as to the health of the toy industry. Was the retailer's liquidation a sign of a shift in how consumers shop for toys? Or was it caused by high debt and mismanagement?
But when Supply Chain Dive asked who was to blame in an audience poll, 69% of 104 respondents said the bankruptcy was single-handedly caused by Toys R Us. Some respondents e-mailed us to say it was not suppliers, or Amazon specifically that led to the retailers' downfall, but Target and Walmart's competition in the space.
In fact, in a recent earnings call Hasbro CEO Brian Goldner acknowledged its network had grown over the past three years, to include a significant digital presence and 21,000 more retail stores despite "recent store closures at traditional retailers."
It should come as no surprise, then, two of Toys R Us' closest competitors are now racing to seize the opportunity and become the toy retailer of choice this holiday season.
Both retailers are adopting larger strategies — like new website redesigns and acquisitions to expand delivery capabilities — meant to create a single portal for consumers to shop in. That also includes ensuring the proper amount of toys are on the shelf, as new consumers look online for who can fill the gap Toys R Us left.
"There’s a tremendous amount of disruption occurring across the retail landscape," Target said in a statement provided to Supply Chain Dive. "We will continue to invest to create an even better Target and are prepared to welcome new guests to shop with us at our stores and online at Target.com."
