Last week, Michaels launched michaelskids.com, an online expansion of its in-store assortment of toys. The brand appears to be attempting to fill the void left by the closure of Toys”R”Us and Babies”R”Us, which collapsed due to their inability to compete with the low prices of Amazon, Target, and Walmart.
With the holiday season around the corner, Michaels is only the latest retailer to enter the kids space. The hobby store has a leg up already — Michaels beats Amazon in average top search position within the arts & crafts category, even further improving that position since last year, according to Gartner L2’s Digital IQ Index: Big Box.
While Michaels reported a drop in Q2 2018 earnings, the brand saw a two-fold increase in online sales compared to last year, citing enhanced searchability and expanded assortment as the drivers. The new kids site features more than three times the number of toy SKUs as stores and positions itself as the “creative piece of the kids’ industry” that steers kids away from video games. Because of this, Michaels focuses its expanded assortment on educational aspects of the toy market that reach younger kids.
The white space left by the toy behemoths has caught the eye of other retailers. buybuyBABY jumped in visibility against baby keywords year over year, and eBay improved its position against toy keywords. Crate & Barrel entered the category with expanded digital assets for its new kids line Crate&kids and promoted the label on the site’s header, alongside display advertising that introduced the label with limited-time deals.
With multiple retailers scrambling to pick up the pieces, the question remains as whether the big three will have competition in the kids space going forward. They’re certainly being proactive about staying ahead: after Michaels’ toy site launched, Walmart increased its investments in baby care and toy keywords, boosting paid visibility by 17 and 10 percentage points respectively, according to the Gartner L2 study. While Michaels earned no organic visibility against tested toy keywords during the study period, the retailer is positioning itself well to capitalize on Toys“R”Us’ absence.