Toys “R” Us is an American toy and juvenile-products retailer founded in 1948. Toys “R” Us, Inc. currently operates over 1100 Toys “R” Us and Babies “R” Us stores in 47 states, Guam, Puerto Rico, and the Virgin Islands. [1] Toys “R” Us has Toys “R” Us and Babies “R” Us stores in the United States, Canada, and around the world. Toys “R” Us and Babies “R” Us in the U.S. and Canada operate as separate companies, but are affiliated through a shared corporate services group that manages the Toys “R” Us and Babies “R” Us brands in North America (though Toys “R” Us Sverige AB is fully owned by Toys “R” US, Inc.).
Toys “R” Us is a leading US toy store with stores throughout the United States and Canada. Toys “R” Us was established in 1948 as a small store with baby furniture and toys, but soon began to sell additional items such as bicycles and children’s clothing. Today Toys “R” Us has more than one thousand stores worldwide. The Toys ‘R’ Us retail price advantage: Toys ‘R’ Us competes primarily on price for all of its merchandise. As most of the products sold by Toys ‘R’ Us are not proprietary to the company, they must compete on low prices if their customers are to be satisfied with their purchases.
Toys ‘R’ Us strives to achieve a low cost structure by utilizing efficient management procedures and minimizing its overhead wherever possible. Many of Toys ‘R’ Us decisions are based on the idea that more of its costs can be kept at a minimum, allowing Toys ‘R’ Us to fulfill its primary objective – selling toys at the lowest price. Toys R Us has been able to keep costs down through its use of high input material from vendors, arranging for lower markups than competitors.
These unique attributes have made Toys “R” Us an important pre-holiday shopping destination for consumers who wish to purchase consumer electronics, appliances, home furnishings, and other large items at discount prices. Toys ‘R’ Us also enjoys a good reputation for service and selection, which is an important part of the Toys “R” Us retailing mix. Toys ‘R’ Us puts a large emphasis on quality customer service, even going as far as to guarantee the lowest prices compared to its competitors. Toys R Us also uses complex technology that helps them track their inventory levels down to an individual product level at all times.
This allows Toys “R” Us to maintain not only high sales volumes but very low unit costs as well . Toys ‘R’ Us strength in the breadth of assortment provides significant consumer value and should be able to sustain profitability for at least one year. The Toys ‘R’ Us market position: Toys “R” Us is the leading toy retailer in the United States, with a market share that has fluctuated between 26 and 29 percent. Toys “R” Us’ performance as it relates to earnings per share (EPS), however, has been relatively flat since 1992.
Toys R Us also faces increased competition from warehouse clubs such as Costco and Sam’s Club. Toys “R” Us will need to develop new products or target other non-traditional retail outlets for its toys and baby products if Toys ‘R’ Us is going to experience any significant improvement in financial performance over the next three years. The Toys ‘R’ Us company operates more than 1,000 stores worldwide. Toys “R” Us has always had expansive plans for future growth, and Toys ‘R’ Us has been opening new stores at a slow but steady rate over the past few years.
Toys “R” Us plans to open 30 new Toys ‘R’ Us and Babies “R” US stores in 2004 in the United States and Canada. Internationally Toys ‘R’ Us plans to add 12 Toys ‘R’ Us Express format stores in international markets such as South Africa, Saudi Arabia, Bahrain, Kuwait, Qatar, Oman, Pakistan, Philippines and Sri Lanka. Toys R Us also continues to expand internationally with Toys R Us Japan which is now up to 94 stores Toys R us continues its international expansion by using innovative marketing strategies that will allow Toys “R” US to minimize its brand name recognition to the Toys “R” Us Japan consumers.
Toys R us has now become Toys R us Japan. Toys R Us Japan continues to expand by opening new stores each year. This will help Toys ‘R’ Us International division which is responsible for Toys “R” Us operations in Europe, Asia, and Latin America grow significantly over the next five years . The Toys ‘R’ US company brand name recognition has improved significantly over the last 15 years , but there are many reasons that show Toys “R” US is still vulnerable to competitors.
Toys R Us has successfully created a unique atmosphere that targets children, their parents, and even the grandparents. Toys R Us knows that it is not likely that it will be able to compete with other toy stores on price alone because of its size. Toys R Us will choose strategic market segments where they can be different from competitors in order to generate revenue.
Toys R Us does this by offering unique features such as free gift wrapping, taking trade-ins for store credit towards purchases, creating weekly advertisements to give deals or discounts for specific toys or games, offering gift cards , working closely with manufacturers so they can offer exclusive deals to Toys R Us shoppers, maintaining a clean environment inside the store, having friendly employees who are knowledgeable about all products sold at Toys R Us, and having a wide range of merchandise to choose from.
Toys R Us has successfully created a unique atmosphere that attracts customers to the store in order to generate revenue. Toys R Us is different from competitors because it offers many features that others do not have, including free gift wrapping , taking back toys for store credit , weekly advertisements with discounts on specific items, gift cards available for purchase, offering exclusive deals for Toys R Us shoppers only , maintaining a clean environment inside the store with friendly employees who are knowledgeable about all products sold at Toys R Us .
Market Segments Toys R Us chooses three target market segments in which to be successful with its business plan. These market segments are kids between zero and twelve years old, parents of children aged zero to twelve, and grandparents of children aged zero to twelve. Toys R Us knows that it is not likely that it will capture the market share for all three segments because each group has a different interest.
Toys R Us chooses these target market segments as its business strategy as they offer the highest potential return on investment (ROI). The age range of children from zero to twelve years old make up a huge proportion of Toys R Us shoppers. Kids between this age range are still young enough where they do not have many toys or other items to choose from, but they also have a fairly good size budget allocated toward their purchases.
