The idea is that you buy a stuffed animal and it has a code on it that you can put in a computer and then you can play with a virtual version of the pet online.
For those of you not familiar with NYC 5th Avenue shopping experience, let me explain. This area is the most expensive area to rent space in the world by far. It costs as much as almost $1,300 per square foot per month. So even for a tiny store, it can easily cost over $100,000 per month in rent alone. So if you had a store in this area, you have to either make a huge profit on your items, sell a huge amount of them, and/or use it as expensive advertsing. Often it's the "expensive advertising" choice as it probably is in this case. This could mean that the physical store will only be there as long as it takes for the word to get out.
They're only $14.99 each, so for a young child, it's not that expensive of a toy and it will keep children occupied in front of a computer for awhile.
You can go to http:\\www.littlestpetshop.com to take a look if you like.
A little video explains it here.