Can Party City Fill The Toys R Us Void With Seasonal ‘Toy City’ Pop-Ups?
"The creation of a Toy City concept to complement our temporary seasonal retail strategy is a logical extension of our brand; one that will allow us to leverage our existing pop-up store capabilities and capitalize on the category whitespace that has recently been created,” says Party City CEO James M. Harrison.
The Toy City pop-up concept, which will open its doors in September, is intended to augment the 942 Party City retail outlets across the country with the promise of a seamless and integrated shopping and checkout system, says CEO James M. Harrison.
“Party City is the unmatched leader when it comes to relevant product offerings for everyday occasions and seasonal celebrations, and we’re always looking for opportunities to enhance these assortments for our customers. The creation of a Toy City concept to complement our temporary seasonal retail strategy is a logical extension of our brand; one that will allow us to leverage our existing pop-up store capabilities and capitalize on the category whitespace that has recently been created.”
Where The Toys R…
In March, Toys R Us said it would shutter or sell off its 735 U.S. locations. At the time, analysis from geo-data specialist Factual showed the demise of the 60-year-old retail chain’s year-over-year foot traffic shows specific areas of viability and disinterest.
Aside from being tied down by massive debt, Factual found that Toys R Us store visits showed an uneven performance between smaller markets, where it did worse due to challenges from one-stop shops like Target and Walmart, and larger areas where it retained some strength.
This week, analysis from omnichannel marketing data provider NinthDecimal showed that Toys R Us experienced an e-commerce surge in during the last holiday season. But that wasn’t enough to cancel out the retailer’s larger woes.
In addition to the debt and the challenge from one-stop retail shops, NinthDecimal also looked at other key behavioral signals and found a reduction in the average household income of Toys R Us shoppers. In the second half of 2017, Toys R Us had a 4 percent decline in visitors with a household income of $100k and higher.
NinthDecimal also compared how close Toys R Us customers were when it came to traveling to a store from home. The data suggested that the percentage of people shopping at a Toys R Us within 10 miles of their home increased from 55 percent to 60 percent over the past year.
Don’t Blame Amazon
In comparison, the percentage of people who traveled over 50 miles to visit Toys R Us dropped from 20 percent to 14 percent, again pointing to the uneven performance between larger markets, where consumers typically don’t have as far to travel, to the more expansive distances in smaller areas of the country.
“While it is easy to speculate that Toys R Us was the latest casualty of the Amazon effect, data shows that customers still want to shop in store,” NinthDecimal concludes. “The more retailers leverage data for their growth strategy, the better they are positioned to adapt to the needs of their customers. From changes in trade areas to shopper profiles to cross-visitation, location data can shed light on important market shifts and inform a marketing strategy that drives real business results.”
So where does this leave Party City’s Toy City idea? For one thing, pop-ups tend to have lower costs thanks to their finite and targeted nature. Whereas many retailers continued to retrench and shrink store numbers last year, Party City added 53 new outlets.
During Party City’s Q1 earnings call with analysts, Harrison cited company research that consumers prefer to shop specific store categories. Certainly, from an SEO stand-point, Party City could clearly benefit from “toys near me” searches.
“As the leading omnichannel retailer in the category, there are many benefits to this pop-up store expansion strategy,” Harrison said in heralding Toy City. “We’re excited to increase our toy assortments while still remaining focused on our core seasonal offerings.”