An article in todays Wall Street Journal, For Toys ‘R’ Us, Holidays Are Open and Shut, (subscription may be required) indicates that this large toy retailer plans to open 350 temporary stores and toy boutiques to leverage sales during the upcoming holiday season.  In the article, Chief Executive Gerald R. Storch indicates that the retailer wants to “seize the day” and increase holiday market share.  KB Toys, which is now defunct, located many of its stores in shopping malls, and that turns out to be the current target for Toys ‘ R’ Us. The retailer indicates that 80 of the stores will be free-standing mall outlets while the remainder will be toy shops co-existing within its own Babies ‘R’ Us stores.  These temporary stores will be small enough for shoppers to easily find the hottest selling toy, and will be open from October through mid-January.

Marketing bravado aside, this move is really a counter response to retail giant Wal-Mart, who just this month announced a massive store and strategy revamp termed Project Impact. This initiative outlines cleaner, less cluttered stores, friendlier customer service, and an emphasis on categories where the competition can be killed. A recent Time magazine article quotes Burt Flickinger, a veteran Wal-Mart watcher as indicating that they have knocked out four of the top five toy retailers thus far, and are now setting the target,you guessed it, Toys ‘R’ Us.

I believe we should all send a collective “bravo” to the Toys ‘R’ Us management team for practicing agility in their selling strategy.  Perhaps this is indeed the practicing of just-in-time retail deployment.

No doubt there may be challenges for inventory planners in selecting and stocking the most appropriate inventory for these temporary stores, but the fact that this retailer has taken on a counter initiative is worthy of praise. 

Time will certainly be the judge as to the overall success of this program in countering erosion of consumer market share, but practicing agility and market responsiveness is worthy of praise.

What’s your view regarding this strategy?

 Bob Ferrari