The latest edition of Fortune magazine features a intriguing article on Private Brand at toy retailer Toys R Us. As evidence of the changing perception of Private Brand the article avoids many of the classic clichés about National Brand Equivalents and low quality.
Toys ‘R’ Us leans on itself for the next big toy hit
The struggling retailer hopes private-label brands will attract new customers.
Big blockbuster movies are expected to do big business in the toy aisle this year.
But the U.S.’s largest toy retailer – Toys ‘R’ Us – doesn’t plan to fully rely on toys tied to hit film properties to help boost sales. It will also generate a ton of business from its own, internally created toy lines.
Toys ‘R’ Us generated 14% of its sales from its private brands in the first quarter of this year. Those toys generate higher gross margins and thus help boost profits.
Some of the retailer’s successful, internally developed lines include Journey Girls dolls, True Heroes action figures, and educational toys under the Imaginarium brand. The retailer is also planning to debut a new baby doll line later this year, which is in addition to the You & Me brand Toys ‘R’ Us has already developed and sells.
“We are looking at private brands and branded products together to offer a more diverse assortment,” said Toys ‘R’ Us Chief Merchandising Officer Richard Barry.
The strong focus on private-label brands comes as Toys ‘R’ Us looks at any way it can differentiate what it sells at its stores versus what competitors stock. The brick-and-mortar retailer not only battles with Wal-Mart WMT -0.63% and Target TGT -0.53% but also online rivals like Amazon.com AMZN 1.09% for a slice of consumer spending on toys. Toys ‘R’ Us often also seeks exclusive items from toy manufacturers to win over shoppers.