“We didn’t really have a toy business and that is really a part of a lifestyle for every family today,” Mastronardi said. “We can create unbelievable, immersive experiences in stores and online — it’s an opportunity to create emotional connections and a reason to come in and stay.”
Shop-in-shops have been a growing tool for marketers as retailers look to reach new audiences. In recent months, for example, Sephora partnered with Kohl’s and Ulta Beauty teamed up with Target.
Macy’s will leverage the Toys ‘R’ Us relationship to build strong connections early on with young shoppers, including millennial parents, who will stick with the department store chain in the long term.
“You’ve got to be able to make that connection — the toy side helps us on acquiring this younger customer,” said Mastronardi.
As part of its holiday marketing efforts, Macy’s recently released a top toy list from longtime Toys ‘R’ Us mascot Geoffrey the Giraffe. The list of 75 items includes toys like a 2021 Holiday Barbie and FAO Schwarz Piano Dance Mat.
After struggling early on during the pandemic, Macy’s has seen sales rebound. For its most recent second quarter, the chain reported a 61% uptick in same-store sales, along with a 56% increase in net sales to $5.6 billion.
Like all retailers, Macy’s and Toys ‘R’ Us are both dealing with the supply chain crisis as well as labor shortages. Yet Yehuda Shmidman, CEO of WHP, said such problems are just temporary as supply and demand get straightened out.
“The supply chain challenge today is absolutely a real one, but if you take a step back and think about it more broadly, in supply and demand we all had too much supply going into the peak of COVID — there was not enough demand,” Shmidman said. “Now, coming out of the peak and demand has skyrocketed and supply is short. In the long run, this is a good thing because you want demand to come back — it means the consumer is strong and that retail is strong.”
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