Toys r Us started its 4th quarter a little early last week by blasting its way into the news. The combination of a speech by Jerry Storch, CEO, defending big box retailing; the announcement of a “Hot Toy Reservation Policy” and the launch of the “tabeo” tablet were designed to demand attention from the nation’ media; it worked.
In my last posting I commented on Mr. Storch’s speech about Big Box retailing (See: “Toys R Us; Jerry Storch Stands up for Big Box Retailing”). In this posting I want to look at the significance of Toys R Us’s decision to enter the tablet market via its “tabeo” tablet.
The “tabeo”, available only at Toys R Us, is designed for children, containing both kid based content and safety features. It will retail for $149.99 and comes with 50 free apps. There are an additional 7,000 apps available covering everything from educational to reading to entertainment.
It is interesting that Toys R Us chose to enter a field that has competing players and more on the way. It will also find itself competing with the lower priced Leapfrog Leappad ($99) and “adult” products like Kindle Fire ($159) and the iPad ($399 to $499) which, whether intended or not, have proven to be kid friendly.
The big questions I see are:
- Is there demand for another children’s tablet?
- Can Toys R Us make the case to parents that they need another tablet in addition to their iPad or Kindle Fire?
- How will “tabeo” differentiate itself from the Technosource, Lexibook and Oregon Scientific products?
- How will Toys R Us merchandise tabeo relative to those of its competitors?
It gets complicated when you are both a retailer and a manufacturer. It should be interesting.