Sears Getting Back Into Toy Biz

Discussion
Jul 30, 2009

By George Anderson

Sears is getting back into toy retailing with
shops planned at 20 of the chain’s stores in California, Illinois, and
the New York metropolitan area. The department store is taking up toys
again after its last experiment in the category, “KB Toys at Sears,” folded
along with that company’s business.

The KB experiment had proven successful, according
to a report by Playthings, with Sears having decided to roll out
the concept chainwide before KB folded its business.

According to Playthings,
Sears is a top 25 toy retailer based on its catalog and online sales. That
ranking does not include Kmart’s toy business.

The
new toy shops are scheduled to launch on Aug. 15.

Discussion Questions:
What do you think about Sears opening toy shops inside its department stores?
What will it need to do if it is to succeed?

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16 Comments on "Sears Getting Back Into Toy Biz"


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David Livingston
Guest
11 years 9 months ago

Sears will need to match Wal-Mart on price or they will be humiliated.

Bob Phibbs
Guest
11 years 9 months ago

The few customers Sears still has come through their doors will give them enough to justify the merch buy. Will it be enough to revive one of the great retail brands? No. Is it enough for specialty toy retailers or other mass merchants to worry about? No.

Marc Gordon
Guest
Marc Gordon
11 years 9 months ago

Wal-Mart has successfully demonstrated that you don’t need to be a toy store to sell toys. Keeping in mind their price strategy, Sears has the potential to do even better if they can kick the presentation up a notch.

Susan Rider
Guest
Susan Rider
11 years 9 months ago

It depends on the execution. They could be very successful if they bring back the yesteryear concept, like “family reviewing the Sears catalog and saying that the store your fathers and grandfathers depended on for the best selection, best quality, and best price is here for you…something in that area. They have to have inventory quantities, buy right and merchandise effectively.

Customer Service is important! How many Sears stores have you been in lately where you can’t find someone that works there? They have to execute, they can’t do what they do with appliances where you buy today and get it in two weeks.

Charles P. Walsh
Guest
Charles P. Walsh
11 years 9 months ago

For those students of discount and mass merchandising retailing who are keeping an eye on current trends…you may have noticed that Walmart has rationalized both their vendor and SKU assortment in the Toy department.

While this strengthens Walmart in many ways, it also opens the door for the competition to find niches. Walmart will dominate on the key volume and commodity items in quantity and price but must give us assortment and newness to accomplish. A good merchant could capitalize by focusing on the opportunities that will develop.

Dick Seesel
Guest
11 years 9 months ago

Sears has to fill that unproductive floor space with something, and other competitors like Kohl’s do maintain a tightly edited toy assortment with a natural acceleration for the holidays. Not likely to be a meaningful category, however, especially if there is any price disconnect with Walmart and Toys’R’Us.

Kai Clarke
Guest
11 years 9 months ago

This is a great concept to make Sears more of a one-stop shop. Their toys will drive consumers to shop and stay longer, while increasing profits. Diversification will help Sears grow its business. However, there will be costs. Sears must remember its core competencies, especially its more profitable centers like hardware and appliances.

Kevin Graff
Guest
11 years 9 months ago

OK, go ahead and do it, Sears. Just don’t do it “half-a@#” and waste the customer’s time. Department stores for the most part are being completely ‘out-retailed’ by every other retail format. If this is just another department with a marginal selection, limited service and middle-of-the-road prices, forget about it. Dazzle us, surprise us…and we’ll shop with you. Otherwise, move on to something else, please!

Carol Spieckerman
Guest
11 years 9 months ago

Charles made my initial point for me. SKU rationalization at Walmart has hit toy suppliers particularly hard. Sears should do its homework and work closely with those suppliers to identify opportunities to fill holes and explore exclusives at the same time.

I don’t see Sears becoming a toy destination; however, with careful planning, toys could keep shoppers in the store longer and plump up Sears’ 4th quarter performance. Why should they cede toys to ‘R’ Us, Walmart, Target, Amazon…Yikes, lots of players. Good luck, Sears!

W. Frank Dell II, CMC
Guest
11 years 9 months ago

Let’s see, Wal-Mart is the largest toy retailer and Toy ‘R’ Us is second. Thus TRU was unable to control the category as a category killer. Department stores exited toys in the 80’s.

Sears is living in the past. They cannot compete with either of the leaders so what will they achieve? Maybe they can achieve greater write offs after Christmas. This is not reinventing a retail concept shoppers want, this is trying anything that worked in the past.

Ted Hurlbut
Guest
Ted Hurlbut
11 years 9 months ago

The news is that Sears is not standing still, from Christmas in July to this new initiative. Neither makes Sears any more of a destination store, but it does fill space and will generate sales. Sell-thru’s would be my biggest concern, and how Sears moves through the inventory if sales don’t track to plan.

Still, these are tactical moves. The underlying strategic problems remain, and they remain unresolved.

Don Delzell
Guest
Don Delzell
11 years 9 months ago

I too am unimpressed with this announcement. 20 stores? Why? As a tactical merchandising effort, carefully controlled and monitored, I can’t see why Sears wouldn’t make money doing this. Beyond that? Not much value. Mattel’s revenue is off by almost 20% and Hasbro has similar numbers. The toy industry is in the tank (thanks to both the recession and cyclical toy dynamics). There are few if any must-have toys to drive this upcoming Holiday season, and if there were, Sears would be last in line for delivery.

Having ravaged the approach, laying out a process and strategy to manage the assortment, control the inventory and price appropriately isn’t difficult. So Sears can and should make money on this. And it won’t matter much to the overall bottom line of the company. Toys are not a growth category, and has been pointed out, there are no available unoccupied and easily exploited niche strategies for Sears to avail themselves of.

Much ado about nothing.

Sandy Miller
Guest
Sandy Miller
11 years 9 months ago

All the concerns from your BrainTrust Panelists have merit. That said, Sears must take new initiatives. Providing a range of toys not featured by Walmart is one such initiative that can succeed.

Just as TRU is doing.

Roger Saunders
Guest
11 years 9 months ago

SEARS needs a play like toys as they are facing an aging consumer base. The toy line can add freshness to the stores, and bring a renewal to the shopper base, if they connect the dots properly with the consumer.

Brian Kelly
Guest
11 years 9 months ago

Deja vu all over again?

I walked the new toy department in Woodfield. Why isn’t it as advanced as the online initiatives where Sears is doing some really innovative stuff?

Business done for fun is better left undone.

Tim Henderson
Guest
Tim Henderson
11 years 9 months ago

I like this move. Sears is already a serious player in the field, so it’s not like they’re stepping into an unknown category. Still, and as noted by others, execution will be key. I’d like to see some category differentiation, e.g., exclusive toys developed via partnerships with manufacturers or developing a line of collectible toys for kids and kidadults.

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