Friday, November 22nd, 2019 November22nd2019

Sell for More Trivia: What is “Retail-as-a-Service”?

Published on November 22nd, 2019

Sell for More Trivia is a weekly blog series that playfully presents a trivia question about commercial real estate.

 

This holiday season the world’s most iconic toy retailer, Toys R Us, will be back in the US…with a completely new business model.

After closing more than 700 US stores and filing for Chapter 7 bankruptcy in 2018, the retailer has announced plans to open two new US stores.  Toys R Us entered into a joint venture with Silicon Valley startup b8ta to launch a new store that will “curate retail experiences in smaller-format spaces”.

The new stores will be a far cry from the 40,000 SF big box retail locations with aisles piled high with toys. Instead, the new stores will be 6,500 SF toy shops akin to an Apple Store.

What is Retail-as-a-Service?

B8ta’s Retail-as-a-Service (RaaS) platform enables consumers to test products out of the box before purchasing them.

B8ta which has 17 nationwide stores and has also worked with retailers Macy’s and Lowe’s to launch the RaaS concept in their stores.

Toy R Us says “We have an incredible opportunity to entirely reimagine the Toys R Us brand and are thrilled to partner with b8ta to create a new, highly-engaging retail experience designed for kids, families and to better fit within today’s retail environment.”

The company says that toy manufacturers will showcase products in a custom-designed interactive, playground-like environment creating a memorable retail experience centered around product discovery and engagement.

Under the watchful eyes of sensors and trained product specialists, children and parents will be able to interact with toys displayed out of the box before making a purchase.

With this new business model, nearly all of Toy R Us’s revenue (US only) will come from selling subscriptions to brands that will pay for in-store and online real estate.  That means, toy makers will pay for space in the stores but will get all the sales.  Brands will also get access to data that will track traffic patterns and other consumer metrics.

Toys R Us has entered into a 50/50 partnership with b8ta.  The company says it has plans to open 10 additional locations in high-traffic retail markets within the US throughout 2020.

 


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About Beau Beach, CCIM

Beau is a tenacious Commercial Real Estate Broker, author and adoring father of four. His clients appreciate his no-nonsense demeanor and his legendary work ethic.

Beau leads Beachwood which is a commercial real estate broker for sellers in the Nashville, Milwaukee, South Florida and Chicago markets.

He’s the author of the books The 3 Reasons: Why Most Commercial Properties Don’t Sell and True Wealth: What Every Seller Should Know About 1031 Exchanges.

Beau can be reached at 800-721-3287, click to schedule a call or Beau@BeachwoodSells.com