TRU finds niche market in Japan

Twelve years ago, Toys R Us decided to expand its business into uncharted territory, opening its first store in Arakawaoki, Japan (just north of Tokyo). While there was an initial concern about whether or not this type of venue could be adapted for a society and culture so different from those of the United States, the retailer met the challenge head-on. Toys R Us has since amassed a total of 135 Japanese locations, earning 180 billion yen in annual sales, which illustrates the company's ability to tap into a new domain successfully.

Simply re-packaging the traditional TRU concept for the Japanese market was not the m.o. for this new endeavor, explained John Barbour, president of Toys R Us International, at a recent conference held at New York's Japan Society. Instead, the retailer focused on aspects of Japanese culture to build a store that would address these customers' interests, as well as introducing them to something new.

For instance, he said, Japanese children are very involved in the gift-giving selection process: from shopping for and selecting a specific toy and wrapping it. As a result, they help drive parents—and traffic—to the stores.

A challenge was incorporating a registry business in store—something that was not part of Japanese culture. But, as Barbour expressed, "we can't succeed without taking some risks." The program was implemented and in just the first day, 140 registries had been created.

Showing no signs of slowing down, TRU has set a goal of operating 200 Japan-based stores in the next 20 years. If the past decade-plus has been any indication of its strength, the company's potential to continue to command this market sector is more than promising.