In a move some experts believe is a sign of an iffy season ahead, Toys"R"Us says it will open 600 tiny temporary stores -- more than doubling its size for the holidays.
The chain is taking advantage of widespread mall vacancies, rolling out the Toys"R"Us Express concept it used on a much smaller scale last year, when it opened 90 pop-ups. Adding 600 of the 4,000-square-foot stores to its current 587 full-size units means it will increase its selling space by 2.4 million square feet, adding 10,000 temporary employees.
"It's an opportunity, and they are capitalizing on the 9% vacancy rate in shopping malls," Doug Stephens, president of Retail Prophet Consulting, tells Marketing Daily. "It will get low rent rates, and very short-term deals, so it can take advantage of the traffic we all hope will be in the malls this holiday season.
"But more important, this shows the way big retail is beginning to fragment. For 25 to 30 years, we've lived with the idea that we need toy stores that are 125,000 square feet. There is just an absolute recalibration of consumer demand happening right now."
The Wayne, N.J.-based chain says it has already opened 300 of the new stores, and that the balance will be ready for business by November. And as part of the push to make toy shopping more convenient, it says it's also expanding the number of toys sold in its 260-plus Babies"R"Us stores.
Retailers like Target and the Gap have been experimenting with pop-ups to create excitement for new launches, limited-edition collections, and special events even before the recession. And TV retailer QVC just opened one linked to Fashion Week.
But the strategy has risks, too, Stephens says. "It's definitely a different brand message. If you give the sense that you're just boxes that hold product that could be opened anywhere, there really is nothing to the store brand any more -- you're just a distribution point. If there was any magic to the shopping experience, it's gone."
Still, he expects all the Big Box stores that have already begun experimenting with scaled-back store size, including Home Depot, Target, and Walmart, to continue experimenting with vastly different formats. It's not just the recession," he says. "There's been a change in this period of consumerism, and a big-box model just isn't sustainable."