Toys “R” Us recently announced that it would be introducing its own tablet for kids, exclusive to TRU, into the already crowded marketplace.
As Ann Zimmerman reported for the Wall Street Journal: “In a bid to battle the ‘showrooming’ phenomenon that is hurting big-box retailers, Toys “R” Us Inc. said Monday it will start selling its own proprietary tablet designed for children. The $149.99 Tabeo will be available only at Toys “R” Us, so shoppers won’t be able to try it out in a store and then purchase it for less on a rival retailer’s Web site. The tablet goes on sale Oct. 21, and pre-orders are now available online at Toysrus.com.”
Despite the potential upside to this product, Zimmerman also says: “If the Tabeo doesn’t sell well, Toys “R” Us will have a problem. Toy makers often guarantee the price of their products and will make up the difference if retailers have to discount the toys to goose sales. ‘The downside to private-label products is if they flop, and have to be discounted, the retailer can’t beat up the manufacturers,’ said Sean McGowan, a toy analyst at Needham & Co.”
But we ask: What other options do retailers such as TRU really have? On one side, they face competition from the likes of Wal-Mart and Target; and on the other side, they must deal with online firms such as Amazon. It is only through proprietary offerings that many retailers will have a chance for long-run success. That is why Sears has Kenmore, Macy’s has an exclusive on Tommy Hilfiger, and J.C. Penney is the sole retailer of Liz Claiborne.
Click the photo for a WSJ video.