28 February 2024

Small Toy Shops Play Up the Perks

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Small toy stores can’t compete on price against mass merchandisers, which have economies of scale and far more storage space. So instead of offering steep discounts and door-busters, many independent toy stores emphasize service, special events, small perks and community-minded events, like fund-raisers, in an attempt to draw shoppers and build customer loyalty.

Mary Tague, owner of Toy Town in Key Biscayne, Fla., offers free coffee in the morning—and wine in the afternoon—during December. And for the past four years she has thrown a party complete with Santa and elves, and expects to attract about 600 people to her store for this year’s party on Thursday.

The holiday season is a crucial time for many specialty toy-store owners. The period from Black Friday to Christmas can account for as much as 50% of a small toy shop’s yearly sales, and the season can make up for losses during the rest of the year. But overall lackluster holiday sales are a major concern this year, as is “showrooming,” the phenomenon when customers browse in a physical shop but actually buy the item at Amazon or other big Web retailers, hoping to save money.

Total retail spending over the weekend after Thanksgiving fell 11% compared with last year, according to the National Retail Federation, a retail industry trade group. And, while more consumers shopped on Small Business Saturday this year, spending per consumer at small businesses fell 11.5% to $162 that day, according to estimates by the National Federation of Independent Business, a small-business lobbying group.

Toys have long been a hypercompetitive category. Three-quarters of the estimated $22 billion in U.S. toy sales come from four big retail chains and online powerhouse Amazon. Toys “R” Us, a company that helped create the “category killer” retail model, has a 16% market share of the toy retail industry in the U.S., according to Needham & Co. toy analyst Sean McGowan. The number of small toy stores plummeted 40%, to 1,500 from 2,500, over the past 10 to 15 years, estimates Kathleen McHugh, the president of the American Specialty Toy Retailing Association.

Jonny Girson, the owner of two toy stores in the Kansas City area, says he has seen dozens of owners go out of business in his 18 years on the job because of inadequate cash flow at the end of the holidays.

The biggest advantage touted by specialty toy-store owners over big-box and online retailers is more personal customer service. Steven Aarons, the owner of Barstons Child’s Play, a chain of four specialty toy shops in the Washington, D.C., area, has three-month training for new employees, focusing on child development and learning the features of the products they sell.

Last Saturday, to cap off Black Friday weekend, Mr. Aarons invited 10 local children’s book authors into his stores. His tactic seemed to help: This year, his sales during Black Friday weekend were up more than 10% from the same time in 2012.

Click here to access the full article on The Wall Street Journal. 

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