The iconic toy retailer, Toys ‘R’ Us, announced on September 10 that they will be releasing their own brand of tablets for children. The new device, named Tabeo, will sell for $149.99 and will only be available through Toys ‘R’ Us. The company has stated that Tabeo will go on sale by October 21, right in time for the Christmas shopping season and the Android powered tablet is already available on the retailer’s ecommerce website for pre-order.
The introduction of Tabeo is a bid by Toys ‘R’ Us to counter the trend of “showrooming”. This recent phenomenon is when a customer walks into a brick and mortar store to physically check out products that they wish to buy. However, instead of purchasing the product from the retailer, shoppers go home and buy online after shopping around for a lower price. The physical store becomes a show room where buyers are able to touch and feel a product which they otherwise would not be able to do online. Toys ‘R’ Us wants to counter the trend by offering products that are not available on-line and can only be bought through them.
Toys ‘R’ Us may be gambling a lot by offering their own proprietary tablet for children especially with three brands already servicing the same sector. The Wi-Fi equipped Tabeo was priced low but the manufacturers of the rival Kurio 7, Meep and Lexibook tablets have dropped their price to compete. The toy retailer will also face a lot of competition from online only retailers like Amazon who have a low end tablet which targets adults but can easily be given to children.
The new tactic by Toys “R” Us may be bad news if it fails. In the toy industry toy makers give retailers a guarantee that their products will sell at a certain price. If a retailer has to slash prices to make products sell, the retailer has to cover the difference. This insurance cover is removed when a retailer makes their own products and any lose will have to come out of Toys ‘R’ Us own pockets.
Source: Wall Street Journal
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