Toys R' Us Prices for Kids, Competes Against "Dollar Stores"

Toys R' Us is implementing a new (and I think very intelligent) pricing strategy that will both increase the company's competitiveness against "dollar stores" and other low cost merchandisers, but that will also tap into a new (and loyal) market - kids.

Starting this week, Toys R' Us is displaying roughly 100 items right inside the front doors priced from $1-$3 to meet the budget of kids allowances:

"It's the world's biggest toy store's answer to popular dollar stores as shoppers have traded down to lower-price outlets.

"Karen Dodge, chief merchandising officer of Toys R Us in the United States, said the new shop is a natural extension of the company's broad range of toy prices, frequent discounts and promotions.

"Featured toys will be refreshed periodically. Toys R Us is also promoting its Geoffrey's Birthday Club freebies and adding new diaper and formula rewards to its Rewards R Us loyalty program."

This is a great example of an innovative approach to the current consumer spending downturn. In the professional soccer arena, MLS team the New York Red Bulls have decided not to raise ticket prices when they move into their newly finished stadium next year. This is an opposite strategy to some teams who have decided to raise prices on the basis of the "value" their sporting organizations bring to the local economy. The Red Bulls move shows confidence in the loyalty of their fan base:

"SECAUCUS, N.J. (AP) — The New York Red Bulls say they will not charge higher prices to current season ticket holders when they move into the new Red Bull Arena in Harrison next year.

"As a thank you to our most loyal fans for their continued support, we have decided to freeze pricing for the first season in Red Bull Arena," managing director Erik Stover said. "We have a very loyal fan base that has waited a long time for Red Bull Arena to be built. Not only will they be the first in line for seats, they will also receive this additional price freeze."

Read the full article here. Also in pricing news this week, the New York Times reported that movie goers are "demanding" higher prices because of the fact that Monsters and Aliens in 3-D topped the box office this week. The 3-D theaters average $3 more in admission fees than regular movies. Is it really that consumers are demanding higher prices and more 3-D films, or that once again family friendly movies are dominating the box office, as has been the case for several years with movies from Disney and Pixar? Food for thought. Warmly, EM
Read the full article here.