The future of toy stores is not to sell you toys

Ben Kaufman doesn’t call Camp a toy store.

Of course, the store, which he co-founded and is CEO, has plenty of shelves filled with all kinds of toys, plus a handful of clothes and other knick-knacks. But that’s when the 33-year-old heads to the back of the space, asks one of his employees to “open the magic door”, then – after some theatrical fanfare – opens a thick Inward wall section of a brand new windowless bedroom it becomes clear why.

The space is large, full of mist, announced by a large sign that says “TOY LAB”. In the center is an elevated racecourse. Kaufman walks around, pointing at buttons that say “don’t push” (catnip for any clever kid, when pushed leads to fun results like disco balls popping out of the ceiling.)

Which brings Kaufman back to his point that Camp is not a toy store. Yes, Camp sells toys, but, adds Kaufman, “we’re a gift company; we are a clothing company; we are a general merchandise company. Above all, it is a playhouse centered on children. And he sells coffee.

Camp is part of a growing trend of companies focusing on aesthetics and experience first. “Experience” is certainly a marketing buzzword – which basically means dazzling the consumer until they’re tricked into buying something – and Camp is a perfect example.

Camp, which has a flagship location in New York’s Flatiron District is mostly like a toy store, with games and other items strategically placed throughout the space on shelves and displays. But a secret door, operated only by employees, leads people to the back – a rotating entertainment zone patrolled by brand partnerships. The walls are still lined with toys and other items to buy, but there are also places to play with the toys, buttons to press that will suddenly cause objects (like disco balls) to materialize. “We call ourselves a family experience,” Kaufman says, pointing to the camp’s organized events — workshops, toddler yoga, date night.

Child-focused retail establishments are certainly nothing new. They date back to 1862, when FAO Schwarz opened in Baltimore. The company pioneered the idea of ​​experiential retail centuries before such a concept existed. The experience simply amazed the children who then pestered their parents until they bought the expensive toys.

In a sense, FAO Schwarz was a pioneer in child-focused marketing. Prior to the 1980s, marketing to children was much more scrutinized, meaning toy stores and manufacturers had stricter reins on how they could advertise to children. Stores like FAO Schwarz marketed meccas – the only place they could have a direct, unmediated line with toy-hungry kids.

Then came the “category killers”, which were stores that focused on one area and offered extreme discounts – in toys – Toys ‘R’ Us and Toy Warehouse led the pack. Their rise has made the entire toy industry much more competitive, driving down prices and crippling more expensive options like FAO Schwarz. Sure, FAO Schwarz was nicer inside, but Toys ‘R’ Us had it all, albeit in a more warehouse environment. FAO Schwarz, in fact, had only a few years of profitability in the 1980s, according to a 1993 New York Times article.

But even the category killers couldn’t last; they were eventually devoured by bigger and more powerful competitors like Walmart and Amazon. The trajectories of these stores have followed consumer trends. At first, people wanted a one-of-a-kind store. Then the competition started driving the prices down. Then, new competition with more online choices and easy delivery made everything before even more obsolete. “If you want the Sorry game today, you can go to Amazon and have it in three hours,” says Greg Portell, global head of consumer and retail practices at Kearne. “It used to be ‘I want to go somewhere and I know they’ll get it.’ There has been a change in mentality regarding the need for a toy store.

In an attempt at self-defense, these retailers ultimately committed the same sins; “They took on debts that they couldn’t repay,” Portell says. By 2017, when Toys ‘R’ Us filed for bankruptcy, the store had amassed more than $5 billion in debt.

Perhaps that’s why Camp is allergic to the “toy store” descriptor. Kaufman explains that only 20% of his business comes from selling toys. “We see that as a good thing,” he says. Camp, in this sense, signals a slight shift in strategy. Where toy stores were once the only place to find toys, which in itself surprised and delighted children, Kaufman’s store wants to be a destination in addition to the fact that it sells items. “There is nowhere families can spend time together outside of the home,” he says. Camp, then, sees dollar signs as a neutral space that just happens to sell things (toys) to people (kids). “Our growth is driven by loyalty,” he says.

It also helps that families are invited to hang out for free, which gives both Camp and its partner brands eye real estate. The center of the rear area, for example, contains a fun activity area for children that is slightly raised with built-in walls to provide eye-level toy shelves for anyone looking around the periphery. “We cater to what brands are looking for in terms of reaching this demographic of young families and designing – I don’t want to call them ad products – but retail ad products that fit their goals,” Kaufman says. Simply put, he’s built a business that, when it’s not selling toys, attracts the attention of a captured, impressionable audience.

But we still don’t know if it will work. Camp’s big sell to investors — he’s raised more than $10 million so far — is that he can reinvent a retail space that never did well. “I think the jury is still out on how successful they are going to be,” Richard Gottlieb, managing director of Global Toy Experts, a consulting firm, told The New York Times last December. “When you dedicate so much space to the non-selling space, your challenges are greater in terms of profitability.” That is to say: Camp is a great experiment to find out if experiential retail actually leads to never-before-seen profits.

Kaufman remains optimistic about his finances. Currently, each Camp store is profitable, but the whole operation is not yet. “We don’t have enough stores yet to cover our business costs,” Kaufman says, “but we will soon.” Once that happens, the concept of sustainable toy stores (“family-centric retail experiences”) may finally leave Neverland.