Cover your child’s ears; a major toy retailer is looking to make a massive Australian comeback, with plans to build one of the country’s biggest toy and baby stores.
In a presentation to investors on Monday, Toys ‘R’ Us outlined its plans to open a 3000-square-metre ‘experiential’ retail centre in the Melbourne suburb of Clayton.
The site, attached to the newly built Toys ‘R’ Us logistics and head office facility, has already been custom-designed and built.
But the retailer is still looking to raise $8 million in funding, with $3 million to go towards opening the experiential retail centre.
This comes about five years after Toys R Us folded locally, closing down 44 toys and baby goods stores across the country.
The centre has been on the cards for a while; in 2019, the retailer announced it was aiming to establish physical experience centres for Toys ‘R’ Us and Babies ‘R’ Us by 2020.
The pandemic may have pressed pause on those plans, but Toys ‘R’ Us chairman Kevin Moore said the opening of the retailer’s US flagship store in 2021 highlighted that a brick-and-mortar Toys ‘R’ Us store still had a place in retail.
Try before you buy
Gary Mortimer, Queensland University retail and consumer expert, told TND the initial Toys R Us stores in Australia were pitted against retailers like Target, Big W and Kmart, and struggled to compete on price.
But a ‘destination precinct’ gives shoppers looking to buy toys an experience unlike other retailers, and could give Toys ‘R’ Us an edge in a retail environment that is toughening with the rising cost of living.
“When we think about purchasing toys … consumers, particularly kids, want to touch and feel and try them before they take them home,” Dr Mortimer said.
“These types of destination retail precincts really drives that experience, as opposed to having 30 or 40 little toy shops dotted around shopping centres where you’re in direct competition with discounters.
“Once you add that level of experience, it adds value to the product.”
He said the new Toys ‘R’ Us centre may operate on a similar model to Ikea and Costco, which are known for big store footprints outside of city centres, where customers go out of their way to visit and tend to spend a significantly larger chunk of time wandering around than they would in other retailers.
Dr Mortimer doesn’t expect a prolific spread of the large Toys ‘R’ Us centres around the country, but he said it’s likely there’ll eventually be at least one in every major capital city.
Apart from the Toys ‘R’ Us and Babies ‘R’ Us brands, the Clayton centre will reportedly include a cafe, have activities for children and allow the public to watch the company’s robot-driven warehouse in action.
“It will be a hands-on [store] for kids to play with things and discover things,” Mr Moore said.
Retailers focus on experiences
Toys ‘R’ Us is not alone in pursuing the experiential store experience; last year, adventure and sporting retailer Anaconda opened the first of its large-format stores in Chullora, Sydney.
The store, Adventure HQ, spans 7500 square metres, and features a 12.1-metre casting tank filled with live fish to allow people to test out fishing lures, a virtual reality ski simulator, and a large artificial grass area that’s an interactive area for tent, caravan and four-wheel drive accessories.
Other retailers that have invested in experiential stores include sporting equipment and apparel retailer Rebel and automotive parts retailer Supercheap Auto.
Dr Mortimer said having these interactive physical stores can also drive growth in a retailer’s online stores.
“Having a physical store enables customers to go in and pick up the products, and look at the quality of the product, experience the product, use the product, and once you feel confident, you’re then more willing to buy it online,” he said.
“Think about the big department stores like David Jones and Myer – they’ve got physical stores, but 25 per cent of their revenue now comes from their online channel.
“Ultimately, consumers are more willing to shop online with a brand that has a physical entity, because they always have the ability to return the product to the store [or] exchange it if something goes wrong.”
