Kroger has taken a bold approach by agreeing to host a range of pop-up stores branded Geoffrey’s Toy Box, named after the Toys R Us mascot, but two leading retail experts believe Amazon’s particular approach to marketing will give it the edge.
Speaking to Knowledge@Wharton, the online business journal of the Wharton School at the University of Pennsylvania, Barbara Kahn and Mark Cohen also predicted that Walmart and Target should do well with toy sales.
Kahn, a professor of marketing at Wharton, and Cohen, director of retail sales at Columbia Business School and the former CEO of Sears Canada, pointed to Target’s appealing in-store design that draws in shoppers and to Walmart’s collaboration with other brands to bring in additional merchandise.
But both said that Amazon is likely to be the “big winner” in the toy sector, not least because of its omnichannel strategy, and the fact that – unlike Toys R Us – it does not have to store huge quantities of seasonal inventory that could become unfashionable by the next holiday season.
“Toys R Us had this terrible problem where this space, this enormous amount of square footage, was extremely productive for about five, six, seven weeks and then fell off a cliff,” Cohen said. “They held the inventory and waited until the season came around the next year.”
Toys R Us used to distribute a Christmas catalogue, the two academics noted, adding that Amazon’s decision to follow suit with its own version is a smart move because a lot of toy sales are driven by emotion.
For example, parents and children will often go through the catalogue together to make up a gift list and they respond well to the convenience, emotion and storytelling involved.
Cohen described Amazon’s seasonal catalogue as an engaging, high-quality pitch that also ingeniously includes QR codes for easy scanning.
“The Amazon catalogue is a whole lot better than the Toys R Us catalogue. It’s got much more production value, it’s laid out in a much more appealing way, and the QR code is just brilliant,” he said.
“They took a consumer’s view of the category, and I think they’re going to reap an enormous benefit from it,” he added.
Kahn also credited Amazon for its customer-centric marketing, including the 4-star stores it recently opened that highlight the products that receive a high rating on its website.
“That’s a very customer-focused approach that really – shockingly, in my opinion – hasn’t been shown before,” she said. “Amazon kind of invented that notion – let’s lead with what [items] are selling best, with what people like”.
Sourced from Knowledge@Wharton; additional content by WARC staff