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Toys 'R' Us Builds Kid-Friendly Tablet Tabeo

September 12, 2012
By Greg Franzese

The tablet wars are more than Apple vs. Google vs. Amazon. 

Toys "R" Us announced it will sell its own seven-inch tablet for $150 this October.
 
Creating an in-house tablet is an interesting move, since private-label products usually have higher profit margins for retailers. But what if it doesn't sell well? WSJ explains the ramifications.
Toy makers often guarantee the price of their products and will make up the difference if retailers have to discount the toys to goose sales. "The downside to private-label products is if they flop, and have to be discounted, the retailer can't beat up the manufacturers," said Sean McGowan, a toy analyst at Needham & Co. "That's not an insignificant part of the toy business."
Toys "R" Us is in a particularly tough spot, hurt by Europe's weak economy and the decline of the video game business. Sales remained flat over the last two years, and losses have widened to $36 million in the second quarter, up from $34 million the year prior. But last holiday season proved tablets were a hot seller, and not just for adults. Most retailers sold out of LeapFrog's LeapPad Explorer, one of the first tablets for kids. These tablets for tots were then resold (with markup) on the secondary market and online.

 

Posted in Online Video News
Tags online video, mobile video, tablet video
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