Business

Toy Retailer Camp Takes Over Former Toys R Us Store as It Puts Experiences to the Test This Holiday Season

Gabby Jones | Bloomberg | Getty Images
  • The upcoming holiday season will put New York City-based Camp's business — part experience, part retailer — to the test.
  • On Tuesday, Camp is opening a store in the former Toys R Us shop at the Garden State Plaza mall, in New Jersey.
  • Camp is betting that experience-based retail will come back stronger than ever, particularly among families with young kids.

A year after Toys R Us liquidated, the brand's new owners vowed to make its stores more of an experience for kids: A place where children could test out toys at their own liberty and play games with friends.

That experiment was tried, and failed, at the Garden State Plaza mall in New Jersey. When the Covid-19 pandemic struck, few consumers were venturing outside of their homes to head to the mall — let alone to mingle in a crowded environment with children. The last-standing Toys R Us locations operated by Tru Kids shuttered earlier this year.

But as anxieties around the coronavirus ease, one company is betting that experience-based retail will come back stronger than ever, particularly among families with young kids. New York City-based Camp hopes that its approach is better than that of Toys R Us, too. And the upcoming holiday season will put Camp's business — part experience, part toy retailer — to the test.

On Tuesday, Camp is opening a store in the former Toys R Us shop at Garden State Plaza mall, which is operated by Unibail-Rodamco-Westfield. It will mark Camp's seventh location, joining ones in Manhattan, Dallas, Los Angeles, and Norwalk, Connecticut. Three more expect to open before the end of the year, and by the end of next year, it expects to double its store count.

"When Toys R Us operated, the toy industry was, for the most part, Toys R Us, Walmart, Target and Amazon," Camp CEO and founder Ben Kaufman said. He's also the former chief marketing officer at BuzzFeed. "Right now, the toy industry is even more consolidated. Walmart, Target and Amazon are driving the majority of share."

"We aren't big needle movers for toy vendors in terms of volumes, just yet, because we don't have enough locations," Kaufman went on. "But we are needle movers in terms of taste-making and basically putting a stamp of 'this thing is cool.'"

A trip to one of Camp's stores is a unique experience in and of itself. The front of the shop looks like a traditional toy purveyor: Shelves of puzzles, Lego sets and L.O.L Surprise dolls, coupled with sweet treats. But behind another door, kids can roam around a sprawling playroom that features rotating and themed experiences, including a lava interaction and another sponsored by "Paw Patrol."

A child draws with markers on a pad at the Camp retail location in New York, June 4, 2019.
Gabby Jones | Bloomberg | Getty Images
A child draws with markers on a pad at the Camp retail location in New York, June 4, 2019.

According to Kauffman, Camp derives its revenue from three different streams: brand sponsorships, ticket sales for rotating experiences and merchandise transactions. Since the company isn't soley reliant on thin margin toy sales, Camp's stores are more likely to be profitable, he said.

"We have a high-margin line of business in ticketing, as well as a high-margin line in sponsorship," Kauffman said.

Camp also collaborates with toy manufacturers and brands to market-test products. It recently teamed with Moose Toys to help it launch Magic Mixies. The toy — which prompts kids to mix a variety of ingredients that bubble and mist, and then wave a magic wand to reveal an interactive creature — has landed on several lists of must-have holiday toys. Kauffman said Camp's stock sold out within 48 hours.

"That just shows you how we can be a traditional retailer, and buy and sell, but we can also act as a media and marketing platform for brands," Kauffman said.

But the past few months haven't been all that easy for Camp. When the pandemic struck and the business was forced to shut its stores temporarily, Camp still didn't have a presence on the internet.

It was able to get a website up and running before the 2020 holidays, and debuted a unique gift exchange service for kids, called Camp White Elephant. Kauffman said around 25,000 families were using it last Christmas Eve.

Moving forward, Camp said it's focused on building out its website to be accessible for younger users — not just their parents. It offers a new feature called the Present Shop, where children can enter information such as a budget and who they are shopping for, and Camp will suggest gifts and help them make a purchase. Adults can pay for the items by giving their kids a special code.

"It recreates the feeling we had as kids walking through a mall with a $20 bill, trying to decide what we want to get for ourselves, or our dad, mom or sister," Kauffman said.

And while Camp will be competing with Amazon, Walmart and Target for toy sales during the holidays, the company hopes to win some of the dollars that consumers plan to spend on experiences — not just gifts.

This holiday season, 43% of U.S. consumers say they're planning to redirect their spending away from physical goods and into experiences and services, an Accenture survey found. That percentage was 50% for Gen Z and 53% for younger millennials. Accenture's survey was conducted in August and counted 1,515 online participants. 

"This is going to be a very human holiday," said Jill Standish, senior managing director at Accenture and head of the firm's retail group. "So a prioritization around experiences and very personal things is what we're going to see."

Copyright CNBCs - CNBC
Contact Us