When the Holcomb family bought Toys & Co. back in 1987, it was a small, 10-year-old specialty business located in a high-end mall, with more than half its sales coming from collectible dolls. The Greensboro, N.C., business also carried juvenile products like strollers and car seats, and the Holcombs soon saw that with big box competitors like Babies “R” Us moving in, they’d have to make a change to their merchandise mix.

When a space opened in the nearby Friendly Center in 1996, an open-air mall with a central Greensboro location, the Holcombs jumped, moving their store to a new 3,500-square-foot venue. While they spent some time “trying to shed the image that we were the 'expensive’ toy store,” says Holcomb, within three years they had already outgrown that space and moved to their current 5,800-square-foot location, also in Friendly Center, perfectly sandwiched between Ann Taylor Loft and the neighborhood pet store—a beacon for moms and kids alike.

Today, a red-and-yellow, circus-tent-themed awning and a handful of balloons bobbing in the wind welcome customers to Toys & Co. starting at 9 a.m.—an hour earlier than the rest of the stores in the shopping center open. Holcomb says he started the early opening after finding moms and preschool kids regularly waiting outside his store at 10 a.m. Without a membership to the local Children’s Museum, there’s really not much for moms of young children to do in the morning, says Holcomb (if you have your doubts, visit your local Target in the early hours), and because of that, the 9 a.m. start time has been a huge success.

The result is that Toys & Co. has become a place not just to buy toys, but also “a place for moms to meet and chat and play with their kids,” says Holcomb. The store is laid out with numerous areas for kids to play with and try out toys—all at kid-friendly heights. Train tables, sure, but also musical instruments, chalkboards and toy cash registers; a low table in the toddler area with chunky-sized tractors, cars and stacking blocks; and perhaps most popular, a full-height Quadrilla Twist and Rail set.

“It’s not just a cool toy store; it’s a cool place to play,” says Holcomb.

But having toys out to play with is not just about entertainment for the children who stop by, it also means parents can see how a child interacts with a toy before forking over the money for it, something that can make or break a sale.

Throughout the store, toys are piled high on the shelves, topped with a repeat of the red-and-yellow awning around the perimeter of the store; large items like ride-on toys and table-and-chair sets are displayed along the top. A round big-top tent draws customers towards the back of the shop, with the most giant of giant stuffed animals perched on top along the edge, and a plethora of special toys underneath. The result is that when you enter the store you have a sense of being enveloped in toys—and not just the ones you expect to see; Toys & Co.’s wide range of products and items you won’t find just anywhere are what make it a retail destination.

To find those products, the Holcombs continue to shop at New York’s Toy Fair; they still find it the best place to see the greatest amount of new and exciting lines. They often find success with smaller companies that may only carry one item and are passed over by the masses—the kinds of things that they’d miss if they stayed home and waited for reps to bring lines their way. And they say Toy Fair gives them the opportunity to talk to other independent retailers, who are often their best insight into new products.

With a merchandise mix that includes specialty market bestsellers from Playmobil, Melissa & Doug, Plan, Folkmanis, Lamaze (RC2) and Schleich alongside mass market mainstays like Mattel, Toys & Co. offers something for everyone.

Holcomb tells Playthings that he used to shy away from mass market brands like Mattel because he couldn’t compete on price with big box discounters, but after slowly adding them back into his stores’ product selection, he realized that on items under $20, “there’s really not a big price difference.”

Plus, says Holcomb, after fighting the image of the “expensive toy store” for years, carrying brands like Mattel is “a legitimizing effect—it helps us be seen as more of a 'regular’ toy store.”

With an established, loyal following and a business built on repeat customers, Holcomb says he aims for an “appreciative attitude in the store.” It shows in little extras, like free gift-wrapping, free storage (especially popular at Christmas—customers can buy all their kids’ presents, have them wrapped for free, and pick them up Christmas Eve), and assembly of larger products. All employees are trained on age- and gender-appropriate toys, and know to always have something in the back of their minds when customers ask for recommendations—which they do often. That kind of customer service takes the guesswork out of birthday presents, makes it easy for grandparents to navigate a changing toy market, and keeps life a bit more simple for over-stressed, busy moms.

There’s no minimum on gift-wrapping—even the mom who bought 10 party favors for $1.99 each walked away with 10 gift bags, says Holcomb. That extra touch all but guarantees repeat business and the store logo on 10 gift bags at a kid’s birthday party doesn’t hurt business either. Holcomb says his philosophy is to do “whatever it takes to keep the customer happy. I’d rather lose a little bit than send somebody away mad.”

It is this kind of understanding of customer loyalty that has helped make Toys & Co. such a success. Involvement with the community is also key, says Holcomb. They’ve never turned down a school that has approached them for a donation, he says.

This past year, Holcomb also started the Toys & Co. School Week program. He approached local PTAs and invited them to sign up their school for a designated week, during which 20 percent of purchases from parents (or others) who mentioned the school would be donated back to the school. A similar program in 2007, Webkinz for Schools, resulted in Toys & Co. donating $10,000 to Greensboro schools in just one month.

Business has been so successful that in October 2007 Toys & Co. opened a new location in the Cotswold Village Shops in Charlotte, N.C. By August 2008, they’d expanded the Charlotte store an additional 1,600 square feet to its current 9,000-square-foot size.

Holcomb says starting with a brand-new store meant doing everything right from the get go—wide aisles, fixtures built to play on at kid height, more toys out to play with. In the first year, the store has seen “tremendous traffic,” says Holcomb, and the location is already outselling the 31-year-old Greensboro store.

The Holcombs also operate two 3,000-square-foot stores in Myrtle Beach, S.C., a totally different kind of market that’s based around a summer influx of tourists. The seasonality of the Myrtle Beach stores means the Holcombs have to understand two very different animals; while the Greensboro and Charlotte stores are based on repeat clientele and customer service, the Myrtle Beach stores focus on having the right products at the right time. This means more impulse priced items, so mom and dad can buy a little something for each of their children while they’re on vacation. While business is busy in the summer months, the difference between markets is easy to see: an average sale in Myrtle Beach is between $8 and $11 per transaction, compared to $26 per transaction in Greensboro on an average day and $40 per transaction in December.

While the Web business is a major bonus, in the end it’s the face-to-face transactions where the Holcombs really win. Theirs is a business where someone still remembers that a toy store should be magical, should offer personalized recommendations for a special gift, and add extra touches like free gift wrap and storage to differentiate it from the more mainstream competition. All are what have made Toys & Co. a destination store, and ultimately, an independent retailing success, in the face of competition from big boxes and Internet interlopers alike. n