{"id":2618,"date":"2017-09-22T11:41:03","date_gmt":"2017-09-22T06:11:03","guid":{"rendered":"http:\/\/www.intelligencenode.com\/blog\/?p=2618"},"modified":"2026-04-27T12:47:46","modified_gmt":"2026-04-27T07:17:46","slug":"can-babies-save-toys-r-us","status":"publish","type":"post","link":"https:\/\/www.intelligencenode.com\/blog\/can-babies-save-toys-r-us\/","title":{"rendered":"Can Babies Save Toys \u2018R\u2019 Us?"},"content":{"rendered":"\n<p>Two days ago,\u00a0Toys \u2018R\u2019 Us filed for Chapter 11 bankruptcy protection \u2013 mere weeks ahead of the critical holiday season \u2013 to restructure amid crippling debt, declining sales and relentless competition from retail powerhouses.<br>In recent years, Toys \u201cR\u201d Us has spent hundreds of million of dollars on interest expenses, which left <a href=\"https:\/\/www.bloomberg.com\/news\/articles\/2017-09-18\/toys-r-us-is-said-to-plan-bankruptcy-filing-as-soon-as-today\">few resources to fund its eCommerce website<\/a>.\u00a0By contrast, Amazon and Walmart dominate eCommerce due to a robust online presence, lower costs and fast home delivery.<\/p>\n\n\n\n<!--more-->\n\n\n\n<p>Chief Executive\u00a0David Brandon cited the immediate need for Toys \u2018R\u2019 Us to build inventory for the holiday season, which accounts for <a href=\"https:\/\/www.bloomberg.com\/news\/articles\/2017-09-19\/toys-r-us-files-for-bankruptcy-crushed-by-online-competition\">40% of annual revenue<\/a>. The retailer will also overhaul its web presence, digital customer loyalty program, ship-from-store capabilities and delivery time.<\/p>\n\n\n<div class=\"wp-block-image wp-image-2619 size-full\">\n<figure class=\"aligncenter\"><img loading=\"lazy\" decoding=\"async\" width=\"471\" height=\"337\" src=\"https:\/\/www.intelligencenode.com\/blog\/wp-content\/uploads\/2017\/09\/baby-picture.jpg\" alt=\"baby picture\" class=\"wp-image-2619\"\/><figcaption class=\"wp-element-caption\"><strong>Baby products as a competitive strength<\/strong> : Recent sales figures suggest Toys \u2018R\u2019 Us has a strategic advantage in the baby products (vs. toys) category.<\/figcaption><\/figure>\n<\/div>\n\n\n<h2 class=\"wp-block-heading\" id=\"h-babies-r-us-brand-to-play-a-bigger-role\">Babies \u2018R\u2019 Us brand to play a bigger role<\/h2>\n\n\n\n<p id=\"h-babies-r-us-brand-to-play-a-bigger-rolelast-year-baby-gear-accounted-for-36-of-toys-r-us-total-u-s-revenue-so-this-category-represents-the-company-s-biggest-share-of-domestic-product-sales-these-results-suggest-baby-products-are-the-brand-s-strength-and-core-differentiator-as-competitors-amazon-and-walmart-grow-their-market-share-in-the-toy-category-toys-r-us-could-benefit-by-focusing-on-baby-products\">Last year, baby gear accounted for 36% of Toys \u2018R\u2019 Us\u2019 total U.S. revenue, so this category represents the company\u2019s biggest share of domestic product sales. These results suggest baby products are the brand\u2019s strength and core differentiator. As competitors Amazon and Walmart grow their market share in the toy category, Toys \u2018R\u2019 Us could benefit by focusing on baby products.<\/p>\n\n\n\n<p>As such, Toys \u2018R\u2019 Us\u2019 turnaround strategy will also involve investing $277 million from 2018 through 2021 to convert existing locations into side-by-side storefronts dedicated to toys and the Babies \u2018R\u2019 Us brand, as profits suffered in locations where <a href=\"https:\/\/www.retailtouchpoints.com\/features\/news-briefs\/post-bankruptcy-babies-r-us-brand-may-be-key-to-toys-r-us-turnaround\">Toys &#8216;R&#8217; Us and Babies &#8216;R&#8217; Us operate separately<\/a>.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-emerging-trends-in-the-baby-category\">Emerging trends in the baby category<\/h2>\n\n\n\n<p>The baby products category has an estimated value of $30 billion industry and major recent category trends include:<a href=\"#_edn5\" name=\"_ednref5\">[v]<\/a><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><h3>E-commerce share increase:<\/h3>Online retail gained share points to account for more than 20% of baby product sales; Toys \u2018R\u2019 Us\u2019 competitors Walmart, Target and Amazon all earned eCommerce share gains. This means Toys \u2018R\u2019 Us needs to focus more on its online business to avoid losing any more market share to online rivals.<\/li>\n\n\n\n<li><h3>Children in home don\u2019t boost sales:<\/h3>Surprisingly, having children in the home does not improve consumers\u2019 odds of purchasing baby products, as 58% of buyers were households without children. This is good news, as Toys \u2018R\u2019 Us can expand its marketing campaigns to target doting grandparents, baby registries, relatives and friends of families with children \u2013 especially leading up to the holidays.<br><\/li>\n<\/ul>\n\n\n<div class=\"wp-block-image wp-image-2621 size-full\">\n<figure class=\"aligncenter\"><img loading=\"lazy\" decoding=\"async\" width=\"750\" height=\"350\" src=\"\/blog\/wp-content\/uploads\/2017\/09\/baby-product-graph.png\" alt=\"Baby Product Purchased\" class=\"wp-image-2621\"\/><figcaption class=\"wp-element-caption\"><strong>Child-free households shop for babies, too&nbsp;<\/strong>: A surprising number of baby product consumers include grandparents, siblings and friends, as shown by this chart from <a href=\"http:\/\/www.tabsanalytics.com\/blog\/2017-baby-products-study-reveals-drop-in-sales-income-disparity\">TABS Analytics<\/a>.<\/figcaption><\/figure>\n<\/div>\n\n\n<h2 class=\"wp-block-heading\" id=\"h-shopping-behavior-within-the-baby-category\">Shopping behavior within the baby category<\/h2>\n\n\n\n<p>To achieve a competitive advantage with baby products, Toys \u2018R\u2019 Us must understand the differences in shopping patterns within this category<b>.<\/b><\/p>\n\n\n\n<p>Overall, online retailers \u2013 including Walmart.com, Target.com, Amazon.com and Diapers.com \u2013 earned a 2% increase in share of mentions in most baby segments; meanwhile, specialty outlets, like Babies \u201cR\u201d Us, Toys \u201cR\u201d Us and department stores decreased. This means offering a robust, efficient online shopping experience must be a priority for Toys \u2018R\u2019 Us to keep up with the new retail reality that shoppers like to research products, compare prices and shop online.<\/p>\n\n\n\n<p>Some distinctions within the baby category include big box and discounter rivals\u2019 strengths. For instance, among diaper products, online purchasing share grew 2 percentage points, up to 22% in 2016. Target.com gained 1.1 percentage points in diaper sales at Target.com and specialty dropped overall by 2.3 percentage points with the biggest drop at Babies \u2018R\u2019 Us. Toys \u2018R\u2019 Us and Babies \u2018R\u2019 Us must consider shoppers\u2019 needs: they may shop online because they don\u2019t want to take their infant to the store, wait in line and carry big, bulky boxes of diapers to their car. Again, the eCommerce strategy must be a priority. While, it&#8217;s easier for people to buy diapers on a trip to the supermarket, it&#8217;s harder to draw them to speciality stores just for baby products. Now, were this to be moved online, things can get so much more convenient for targeted shoppers.<\/p>\n\n\n\n<p>However, among baby needs products, which include shampoo, lotion, soap, powder and ointments, online sales grew 2.8 percentage points since 2016. Notable growth in this segment also took place among discount grocery retailers like Aldi and Save-a-lot. Toys \u2018R\u2019 Us should consider that <a href=\"https:\/\/www.intelligencenode.com\/blog\/all-about-value-based-pricing-strategy\/\">value pricing<\/a> and online convenience may be priorities for consumers of these types of baby products. What can set them apart are exclusive toy franchisee lines and novelty toy collabs that venture beyond the category to all baby-focused merchandise.<\/p>\n\n\n<div class=\"wp-block-image wp-image-2620 size-full\">\n<figure class=\"aligncenter\"><img loading=\"lazy\" decoding=\"async\" width=\"607\" height=\"405\" src=\"\/blog\/wp-content\/uploads\/2017\/09\/toyrus.png\" alt=\"Toysrus\" class=\"wp-image-2620\"\/><figcaption class=\"wp-element-caption\"><strong>Looking beyond the domestic market for growth<\/strong> : This year, Toys \u2018R\u2019 Us announced it would open more stores in China to take advantage of conditions that align with the retailer\u2019s target market.<\/figcaption><\/figure>\n<\/div>\n\n\n<h2 class=\"wp-block-heading\" id=\"h-capitalizing-on-a-baby-boom\">Capitalizing on a baby boom<\/h2>\n\n\n\n<p>Following yesterday\u2019s announcement, Toys \u2018R\u2019 Us\u2019 Canadian subsidiary announced it also plans to seek protection. However, the company\u2019s other foreign operations, including more than 250 licensed stores and joint ventures in Asia, are not part of the Chapter 11 filing.<\/p>\n\n\n\n<p>Earlier this year Toys \u2018R\u2019 Us invested in more physical stores in China and eCommerce operations, as the country\u2019s market conditions look favorable. For instance, China eliminated its one-child policy, so more babies could mean more demand and sales for Toys \u2018R\u2019 Us\u2019 baby products. In addition, the country has nearly half a billion middle-class consumers who are increasingly affluent, tech-savvy and willing to buy safe, quality products made overseas, making these shoppers ideal targets for the retailer\u2019s omnichannel operations.<\/p>\n\n\n\n<p>Wherever Toys \u2018R\u2019 Us operates in the world, if it focuses on the baby products market, the company must adapt to these emerging trends and shopping behaviors to better serve consumers and remain relevant in this fierce retail market.<\/p>\n\n\n\n<p><a href=\"#_ednref5\" name=\"_edn5\"><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Two days ago,\u00a0Toys \u2018R\u2019 Us filed for Chapter 11 bankruptcy protection \u2013 mere weeks ahead of the critical holiday season \u2013 to restructure amid crippling debt, declining sales and relentless&#8230;<\/p>\n","protected":false},"author":2,"featured_media":2622,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"content-type":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[52],"tags":[910,626,909],"class_list":["post-2618","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-retail-strategy","tag-baby-category","tag-retail-sales","tag-toys-r-us"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v27.4 (Yoast SEO v27.5) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>Can Babies Save Toys \u2018R\u2019 Us?<\/title>\n<meta name=\"description\" content=\"Wherever Toys \u2018R\u2019 Us operates, the company must adapt to these emerging trends &amp; shopping behaviors to remain relevant in this fierce retail market.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, 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