A few weeks ago, Toys R Us announced that it was launching a “toy reservation service” for the toys it predicted would be the hottest toys of the Christmas season. Parents who place a reservation (with down payment) by October 31 are guaranteed a toy when they are released before Christmas.
Reading that story and thinking about it for a bit, I came up with the following conclusions:
1. You have to reserve by Halloween, which means we’re now officially rolling Christmas back before Halloween.
2. From the consumer point of view, this seems a lot like pre-ordering from Amazon. Except that most of the pre-orders I do are for books I know I’ll want to read, not toys I’m trying to predict if my kid will want three months from now.
3. Do kids always really want the “hottest toys”? What if you reserve and then on Christmas morning your kid’s all “meh”?
4. Arbitrage. Reserve now, then sell on Ebay for six times the price on December 22?
5. I wonder if there’s a limit from manufacturers on the number of toys Toys R Us can order, or if it would be possible for TRU to take enough reservations that manufacturers won’t have any stock left to sell to other retailers. If that happens, it could mean that TRU has essentially put Walmart, Target, and every other toy retailer out of business for the entire Christmas season.
6. From a supply chain perspective, this could make things far easier for toy manufacturers to predict and meet demand without excess.
What do you think about this? Would you do it?