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Posted by Sucharita Mulpuru on September 17, 2010
On Wednesday of last week, Ann Zimmerman of The Wall Street Journal reported on my former employer, Toys “R” Us, which is planning to open up 600 temporary “pop-up stores” in anticipation of the holiday shopping season. The WSJ describes it as a super-sized bet while the company maintains it is a proven strategy. Like most prospective retail decisions in this uncertain economic period, it is likely a mixture of both.
Ann certainly has some legitimate weight behind her assertions:
However, there is a method behind the madness:
The economic outcome of autumn is likely to dictate the success of this initiative. 2009 experienced an uptick in total shoppers but an 8% decline in total spend (NRF, 2010). Conversely, the National Retail Foundation predicted a 2.5 increase for total retail spend during 2010, a figure that would likely only become a reality deep into the holiday season.
No matter the outcome (at least not for us onlookers), this play by Toys “R” Us represents a bold move in the retail world – moving away from the formerly automatic superstore approach toward a less risky, more localized version of the space it once defined.