Toys R Us, the nation-wide toy retailer struggling in recent years from relentless competition from Walmart, has launched its Christmas Savers Club, a throwback to depression-era tactics used by many retailers to build holiday sales. The plan is designed to help parents save for holiday toys, and to guarantee that they will spend those savings at Toys “R” Us.
The New Jersey-based retailer has reached back to the holiday savings clubs that became popular during the Depression for inspiration for its latest effort to build customer loyalty. It used to be that every neighborhood bank had a Christmas club savings program, which encouraged people to set aside a few dollars a week for holiday spending. Those programs began to lose popularity as credit and debit card use became more widespread.
“We’re a relatively old brand, and we’ve started to use components of nostalgia within our brand, so we’ve looked at things that people used to do. Christmas savers’ clubs were one of those things that people used a lot, especially in times when budgets were tight,” said Greg Ahearn, senior vice president for marketing and e-commerce for Toys “R” Us.
The recession created demand for programs like layaway and Christmas clubs, said Chris Byrne, toy consultant and toy trends researcher.
“Some moms started this all by themselves last year,” Byrne said. “They would open separate savings accounts” to make sure they had money for holiday toys, he said. Toys “R” Us, he said, is smart to tap into that consumer sentiment. “This is money that people can feel secure that they know that no matter what happens they’re going to be able to create the Christmas for their kids that they want to,” Byrne said, “That’s one of the things driving layaway and all this.”
The advantage of dedicated savings clubs, in the consumer’s mind, Byrne said, is that it makes them feel like the money won’t be spent on other necessities. “It’s not like I put it into the savings account and then the bathroom sink goes and there goes that money,” he said. The advantage for Toys “R” Us, he said, is that money saved through its plan will be spent at its stores. Cash refunds will not be allowed, except where required by law, the company said.
Kmart and Sears introduced a similar Christmas savings program last year.
As an incentive, Toys “R” Us will add a 3 percent bonus on the amount saved by Oct. 16, up to a maximum savings amount of $2,500. Customers who have saved the maximum amount would receive a $75 bonus.
“It gives consumers an opportunity to put money away, to budget themselves for Christmas, and to get paid a bonus for doing it,” said Ahearn. Participants will receive a Christmas Savers Card, similar to a gift card, and can add value at Toys “R” Us stores. The savings cards can be spent starting Oct. 31 at Toys “R” Us or Babies “R” Us stores.
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