Toys ‘R’ Us taps tech startup b8ta to bring its stores into the future

Retail-as-a-Service startup b8ta, which has partnered with the likes of Google and Macy’s, is getting into the kids’ toys space. As part of a new joint venture with Tru Kids Brands, which owns Toys “R” Us, b8ta will bring its expertise in experiential retail to the iconic children’s toy store. Both entities will own 50% of the venture.

After about eight to 10 months of working together, b8ta and Tru Kids Brands are pulling back the curtains on what they’ve been working on. With these new stores, parents and kids can expect theaters for movies and video games, a treehouse where kids can play, STEAM workshops and more. The first two stores, which will open in November in Houston and New Jersey, are about 6,500 square feet with future stores being closer to 10,000 square feet. For context, these are much smaller than the size of the Toys “R” Us stores people became used to, which were about 30,000 square feet.

B8ta’s solution offers brands a physical presence with an experiential-driven store that comes with software for checkout, inventory, point of sale, inventory management, staff scheduling services and more. That means toy brands will have the option to pay to showcase their products in an interactive way at Toys “R” Us. Those brands can then manage their in-store experiences and give customers the options to buy things in the store, or direct them to buy online.

“I think there is an interesting mash-up between experiential retail that b8ta has been perfecting in its store with those hands-on experiences,” Tru Kids Brands CEO Richard Barry told TechCrunch. “Having the ability for brands to showcase things and give them online experiences too.”

This joint venture comes after Tru Kids Brands announced the return of Toys “R” Us in February, following the toy store shuttering its operations in the U.S. last year. For b8ta, it seems to have found a niche with struggling retailers. Last June, Macy’s acquired a minority stake in b8ta and used it to enhance some of its spaces. That came during a time when Macy’s was closing a bunch of its stores.

With Toys “R” Us, b8ta saw this as an opportunity to expand into the kids category.

“As you may recall, we had mentioned we were interested in taking our business model and our approach to designing stores in other categories,” b8ta CEO Vibhu Norby told TechCrunch. “Last year, we took a serious interest in the kids space. Around the same time, we heard the news about what happened at Toys ‘R’ Us and thought it was interesting.”

Fast-forward a bit to when Norby was introduced to Barry, and that’s when they landed on the idea for a joint venture to operate Toys “R” Us in the U.S. Next year, the companies will open additional locations in high-traffic areas throughout the U.S. To date, b8ta has raised $39 million in funding from Macy’s, Sound Ventures, Khosla Ventures and others.