Target bets on QR codes, exclusive toys this holiday

Wed Oct 3, 2012 12:17am EDT

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(Reuters) - Target Corp hopes that letting shoppers scan, buy and ship a selection of toys while shopping in its stores and having hundreds of exclusive toys will help drive sales this holiday season, one of its executives told Reuters.

Starting October 14, Target will feature 20 toys at the front of its aisles promoted with signs featuring QR codes. Shoppers with smart phones can scan the codes, those squares with dark boxes and lines, to buy any of those items and have them shipped free.

"Providing this convenience for mom is about ensuring that she's able to shop the way that she wants to," said Stephanie Lucy, Target's vice president of toys and the mother of two who knows about not wanting to ruin the surprise of the holidays.

Giving shoppers this new way to buy merchandise could help differentiate Target from its rivals including: Toys R Us, Wal-Mart Stores Inc and Amazon.com Inc.

The holiday season accounts for the bulk of toy sales at Target and other U.S. chains. Last year, Target's toy sales were hurt by Walmart's layaway push before Thanksgiving. Unlike some other major toy sellers, Target does not offer layaway, which gives shoppers the ability to put goods on hold and pay over time.

Instead, Target uses sales coupons, and free shipping and small discounts for its credit-card holders.

Target's fourth-quarter sales rose 3.3 percent last year, with sales at stores open at least a year up 2.2 percent, down from a 2.4 percent rise during the year-earlier holiday season. The company has not yet given a forecast for the holiday season, and Lucy declined to give a projection for toy sales.

Lucy said on Tuesday the top trends this season include: construction toys such as Lego; interactive toys such as Hasbro Inc's Furby and Just Play's Bounce Bounce Tigger; and educational toys led by LeapPad 2.

LeapPad 2, a kids' tablet from LeapFrog Enterprises Inc, is on several hot holiday toy lists that retailers and industry groups assemble.

To try to stand out, Target has an exclusive $130 LeapPad 2 bundle that includes playlists, a music video collection from Kidz Bop, known for popular music sung by kids, headphones and accessories that are valued at $199. The chain also sells the regular LeapPad 2 for $99.

Along with the LeapPad 2 bundle, two of Target's other top toys - Lego Friends Emma's horse trailer and Mattel Inc's Monster High Scary Tales Doll - are exclusive items for the Minneapolis chain.

Target has more than 300 exclusive toys this year, roughly the same amount as last year. The chain sells about 10,000 toys online and has roughly 2,500 in stores, Lucy said.

"Any retailer whose point of difference isn't based on having the lowest pricing every day lives and dies by exclusivity," Dan Cooney, vice president of sales at JAKKS Pacific Inc, said last week. "They need a marketable point of difference that they can compete with other than price."

Mattel works closely with large retailers such as Target, Toys R Us, Walmart and Amazon to identify opportunities to make their products stand out, Tim Kilpin, an executive vice president at Mattel, said last week.

"It differs by retailer, but we try to be connected to what they think is going to work best for them," Kilpin said. "It's going to be something that they can really behind, that they can really promote so they can explain to their guests why it means more to go there versus others."

Lego also makes exclusive toys for Target, Walmart and Toys R Us, and has done that for some time.

Fifteen of the 20 toys on Target's list are priced below $50 as the chain recognizes that customers want value, said Lucy.

"We believe we're poised to have a strong holiday season," she said.

(Additional reporting by Phil Wahba in New York; Editing by Leslie Gevirtz)

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