New Entry in Tablet Wars: Toys 'R' Us
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 website.
The tablet goes on sale Oct. 21, and pre-orders are now available online at Toysrus.com.
In addition to feeling pressure from online-only retailers such as Amazon.com Inc. (AMZN), the toy merchant also is facing stiff price competition on basic toys from Wal-Mart Stores Inc. (WMT) and Target Corp.
"It is our strategic position to offer products that you can't find anywhere [else] or be compared on price," said Troy Peterson, a vice president at Toys "R" Us, which is based in Wayne, N.J.
But while private-label products generally have higher profit margins for retailers, Toys "R" Us faces significant risks as it makes its first move into house-brand electronics, experts said.
For one thing, there is substantial competition.
The retailer priced its tablet significantly lower than the three similar child-oriented, Wi-Fi-equipped tablets already on the chain's shelves, but the makers of the Kurio 7, Meep and Lexibook quickly matched its $149.99 price tag, even though the Tabeo won't be available until late October.
Child-focused tablets also might compete with adult versions. The price of Amazon's Kindle Fire just dropped to $159, and parents trading up to a new Apple Inc. (AAPL) iPad might choose to hand over their old tablets to their offspring.
Toys "R" Us has struggled with price competition that has contributed to two years of profit declines while its annual sales of roughly $14 billion have remained relatively flat. Last week, the company said second-quarter sales at U.S. stores open at least a year dropped 3.4% and its loss for the quarter widened to $36 million from $34 million a year earlier.
It said the results were hurt partly by declines in the global videogame business and Europe's weak economy.
The Toys "R" Us tablet, which uses Google Inc.'s (GOOG) Android mobile operating system, more closely resembles an adult tablet; it comes loaded with 50 free game applications, including popular titles such as "Angry Birds," and the retailer has developed its own app store with 7,000 titles.
Focus groups of parents and children prompted the company to include features that allow parents to control what websites their children visit and how much time they spend playing with the tablet.
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 website.
The tablet goes on sale Oct. 21, and pre-orders are now available online at Toysrus.com.
In addition to feeling pressure from online-only retailers such as Amazon.com Inc. (AMZN), the toy merchant also is facing stiff price competition on basic toys from Wal-Mart Stores Inc. (WMT) and Target Corp.
"It is our strategic position to offer products that you can't find anywhere [else] or be compared on price," said Troy Peterson, a vice president at Toys "R" Us, which is based in Wayne, N.J.
But while private-label products generally have higher profit margins for retailers, Toys "R" Us faces significant risks as it makes its first move into house-brand electronics, experts said.
For one thing, there is substantial competition.
The retailer priced its tablet significantly lower than the three similar child-oriented, Wi-Fi-equipped tablets already on the chain's shelves, but the makers of the Kurio 7, Meep and Lexibook quickly matched its $149.99 price tag, even though the Tabeo won't be available until late October.
Child-focused tablets also might compete with adult versions. The price of Amazon's Kindle Fire just dropped to $159, and parents trading up to a new Apple Inc. (AAPL) iPad might choose to hand over their old tablets to their offspring.
Toys "R" Us has struggled with price competition that has contributed to two years of profit declines while its annual sales of roughly $14 billion have remained relatively flat. Last week, the company said second-quarter sales at U.S. stores open at least a year dropped 3.4% and its loss for the quarter widened to $36 million from $34 million a year earlier.
It said the results were hurt partly by declines in the global videogame business and Europe's weak economy.
The Toys "R" Us tablet, which uses Google Inc.'s (GOOG) Android mobile operating system, more closely resembles an adult tablet; it comes loaded with 50 free game applications, including popular titles such as "Angry Birds," and the retailer has developed its own app store with 7,000 titles.
Focus groups of parents and children prompted the company to include features that allow parents to control what websites their children visit and how much time they spend playing with the tablet.
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