Last month retailer Toys R Us announced they’re making a comeback into the US. Whilst we’ve known about their relaunch into the Australian market, predominately through an online-only offering, what is perhaps unique with their re-launch into the US was the announcement that this would be through a joint venture with experiential tech retailer B8ta.

Why B8ta?

B8ta was originally opened to operate as a showroom for tech startups, with a specific focus on connected devices and gadgets.  The idea was formed when the founders, all former Nest employees, noticed that many “Internet of Things” startups were struggling to get their products into the hands of consumers. From a consumer perspective, the main issue with new IOT devices and gadgets is that since they are often only available to purchase online, they often lack the ability to try before you buy and require something of a leap of faith when purchasing.

B8ta acts as somewhat of a showroom. That is, an immersive place for shoppers to watch live demonstrations and learn about products without necessarily buying them in-store. It leverages store design and data to showcase goods, many from little-known makers or start-ups and operates a network of showrooms both across it’s own stores and in other retailers’ “shop-in-shop” spaces. It also operates within a different business model. B8ta sells no merchandise itself nor does it take a cut of any profits. Instead it charges subscriptions that brands pay to use their spaces and the b8ta platform. Brands can also get direct feedback and customer analytics from B8ta as to how shoppers are interacting with products.

B8ta store has 15 standalone locations across the US, plus locations inside Lowe’s and Macy’s. Source: TechCrunch

So what will the new Toys R Us stores look like?

Rather than providing “warehouse like” stores overstocked with toys, Toys R Us are launching a number of new small format concept stores. And whist these new stores are significantly smaller than Toys R Us stores of the past, what they lack in size they make up for in cool factor.

“As the retail landscape changes, so do consumer shopping habits. But what hasn’t changed is that kids want to touch everything and simply play” said Phillip Raub, president of b8ta and interim co-CEO of Toys R Us Joint venture.

The new stores will feature interactive experiences that will continually evolve across the year – all centred around the theme of discovery and engagement. Stores will have open play areas and spaces for special events (like birthdays and workshops), interactive toy demonstrations and a dedicated space to watch movies or play video games.

The trend of struggling toy retailers opting for more “experiential” experiences in smaller spaces isn’t a new one. Last year we saw FAO Schwartz, whom were previously owned by Toys R Us, move to a smaller more interactive spaces. However the Toys R Us and B8ta partnership is particularly unique in that the stores will also act as somewhat of a test lab for both consumers and brands. Consumers will have the opportunity to play with toys out of the box before purchasing, whilst brands can also use this immersive in-store experience to help track consumer behaviour and measure how this will effect online sales.

After previously shutting down it’s iconic New York store in 2015, FAO Schwarz recently re-opened in a smaller location within Rockefeller Plaza. Source: Money.com

This isn’t the first time b8ta has stepped in to help a struggling retailer, previously stepping in to help Macy’s last year. Using Toys R Us’s experience in the toy industry combined with B8ta’s experiential retail design and data / analytics platform, the new partnership should help bridge the gap from Toys R Us’s big box business model of the past to that of one which is designed around the customer experience.