As Buyers Eye Toys R Us Locations, Factual Finds Weakness In Smaller Markets, Competitive In Metro Areas
"The old adage 'location, location, location' rings true here -- data has the power to reveal physical locations where retailers should consider opening or closing stores," says Factual's Ocean Fine.
As Toys R Us plans to sell shutter or sell off its 735 U.S. locations, the demise of the 60-year-old retail chain’s year-over-year foot traffic shows specific areas of viability and disinterest.
Analysis of Toys R Us visitation from geo-data specialist Factual reveals foot traffic patterns from November 2017-January 2018 that points to uneven performance between smaller markets and larger ones.
Factual found that “one-stop-shops” such as Walmart and Target generally perform better in smaller markets than specialized stores such as Toys R Us. Conversely, urban Toys R Us stores saw more foot traffic per store than those two generalist retail brands.
Among Factual’s topline findings:
- Toys R Us struggled most in smaller markets: On average, Walmart and Target saw 20x more foot traffic than Toys R Us in smaller markets such as Biloxi, MS, Tucson, AZ and Dayton, OH. (A smaller market is defined as one with less than 400,000 people.)
- Meanwhile, urban Toys R Us stores got more visitors: In bigger markets such as Boston, Seattle and San Francisco, the average Toys R Us store got more traffic than the average Target or Walmart. For example, in Boston, Toys R Us got 55 percent more traffic than the average Target, and 37 percent more than the average Walmart.
- While there were many contributing factors to the toy chain’s demise, the data shows that Toys R Us actually had an edge on commerce giants in big cities and could have used this insight to optimize marketing efforts (think in-store mobile offers) to reach these shoppers, as well as in its decisions to open or close stores. With the dominance of one-stop shops like Target and Walmart, this is a lesson that all specialty retailers can learn from.
That kind of analysis could inform which locations survive as companies as varied as the CEO of Bratz dolls, rival KB Toys, and Amazon are all reportedly considering taking over former Toys R Us stores.
“The data we gathered is telling, showing that Toys R Us in some metros had an edge on commerce giants, despite its overall decline,” says Ocean Fine, VP, Agency & Strategic Accounts at Factual. “The old adage ‘location, location, location’ rings true here — data has the power to reveal physical locations where retailers should consider opening or closing stores, and in this case, it could be highlighting an opportunity for toy retailers — even Target and Walmart — to fill the void left by these Toys R Us stores.”
Location data can be used in other strategic ways as well, Fine adds.
“Understanding path to purchase and connecting online and offline consumer behavior are made possible by intelligently leveraging location data,” Fine says. “This knowledge helps marketers understand their customers at a deeper level, so they can engage them at the right time and place while staying relevant.”