The latest Toys R Us news – the announcement that any time it sells something online or in its new pilot stores, Target and Target.com, not Toys R Us, will be making the sale – made the new reality of Toys R Us hit home.
Toys R Us is never going to be reborn, post-bankruptcy, as a retailer.
The new Toys R Us business model is more social influencer than retailer. Like celebrities and social media stars, it will use its well-known brand to steer consumers to purchases that will be benefit its retail partners, and get a small cut of each sale.
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With the Target deal, their long-term game plan becomes clearer. Let others have the headaches of running stores (b8ta, the retail-as-a-service company that is their partner in the pilot stores) or fulfilling online orders (Target), is what they appear to be saying. We'll get paid, they figure, if our name brings customers in the door, or to a website that leads to a sale.
While the new model probably means Toys R Us will get just a tiny slice of every sale (Target and Toys R Us did not reveal the financial arrangements behind their deal), the amount it has to spend upfront for this new way of doing business is also tiny, compared to real retail. They don't need to hold inventory, have fulfillment centers, or most of the costs of traditional retail.
On the Toys R Us website, relaunched Tuesday, visitors can read toy reviews, and "best of" lists, as well as the top picks of Geoffrey, the cartoon giraffe mascot of the Toys R Us brand. Recommended toys have "buy now at Target.com" links.