Dive Brief:

• Target will carry an exclusive, 70-piece toy collection from FAO Schwarz, the company announced on Thursday. FAO Schwarz will also offer more than 300 Target items from the retailer's exclusive brands such as Cat & Jack and Pillowfort, per the company statement.

• The collection will be available at Target stores across the country and online as well as at the FAO Schwarz store in New York City, the company said. Target highlighted that "many" toys in the collection are under $20.

• Target is also offering 19 exclusive toys from the likes of Disney and Lego, the retailer said, and will donate up to $1 million based on top toys purchased as part of its partnership with Toys for Tots.

Dive Insight:

Target's partnership with FAO Schwarz is right on time for the holidays and could help Target differentiate itself from other major toy players, namely Walmart and Amazon. 

The toy category overall has been hit hard in recent years, with Toys R Us (which owned FAO Schwarz at one point) filing for bankruptcy right before the holidays in 2017 and liquidating in March the following year. Even a few years after its bankruptcy journey, the toy category continues to struggle with the aftereffects of its closure. With the fall of the nation's only remaining dedicated toy store, Target has been vying with Walmart and Amazon to dominate the market share that Toys R Us left behind. 

To that end, Target has ramped up SKUs and partnerships with toy makers over the past three holiday seasons since Toys R Us liquidated, with mixed results. The retailer's comparable sales in the toy category remained flat in the fourth quarter last year. That came as a surprise and disappointment to some in the toy industry, though some data showed Target gained share online.

Last holiday season, the retailer partnered with the revived Toys R Us to sell toys online via links to Target product pages on toysrus.com. As of August, that role is now filled by Amazon. Meanwhile, Target has found another toy icon to partner with in FAO Schwarz. 

It's not the toy seller's first partnership either. In October 2019, the iconic toy brand sold product exclusives through Macy's. Since FAO Schwarz filed for bankruptcy in the 2000s, it has lived on through collaborations with other companies over the years and has sold branded products in major retailers, including Barnes & Noble. 

In its announcement, Target touted its fulfillment options for customers this holiday season. In the second quarter, comps for those services, including Pick Up, Drive Up and Shipt, grew 273%. The company is also increasing its holiday staff dedicated to serving same-day customers. Research from SurveyGizmo and BlackFriday.com suggests that customers will be using more curbside and contactless pickup options this holiday season.