I remember growing up as a kid and how exciting it would be to walk into a Toys-R-Us and the onslaught of every toy imaginable. Of course this was the 80s, and outside of television commercials, it was the only way to know what was out there. Sadly, like many other victims of the Amazon takeover, our old friend is dying a slow death:
Toys “R” Us Inc said on Tuesday it will shut about one-fifth of its stores in the United States in the coming months, as the toy store chain tries to emerge from one of the largest ever bankruptcies by a specialty retailer. The closure of about 180 U.S. stores will begin in early February and continue until mid-April, Chief Executive David Brandon said in a letter on its website. (Reuters)
For the past few years, I would drive by one of their stores in the neighborhood, and can remember thinking and saying often that it was just a matter of time before that store closed. It doesn’t take a rocket scientist to make a conclusion like that with Amazon, Walmart, and a myriad of other companies killing it online. But it didn’t have to be this way. The bottom line is that Toys-R-Us has failed miserably to adapt. The store you walk into now is practically the same tired old experience from 30 years ago. Nothing has really changed.
There are plenty or articles out there saying that traditional retail is dead which I disagree with. Yes, there are plenty of instances of retail chains closing their doors, but that’s not because people aren’t willing to put the mouse down and do things the old fashioned way. That’s where Experiential Marketing comes in. These companies have failed to evolve and give people a reason to shop offline. I practically always prefer to do my shopping online, but if a store gives me a reason to visit, I’ll make the trip. Traditional retail stores need to provide experiences, and not just sell product.
Toys-R-Us totally missed this and quite frankly I’m shocked by it. Talk about an incredible missed opportunity. What better environment to create meaningful, engaging, memorable experiences then a toy store?! Re-vamp your stores to create fun toy experiences for kids and adults…move away from your traditional shelved merchandising layout, and create stations and events, and experiences. Stop trying to be everything to everyone and assess which products you can realistically compete with and what kids are into these days. There’s so much that could have happened here over the years for them to really differentiate themselves and give people reasons to go to there stores. Host video game competitions, arts and crafts sessions. Hell, partner with some Kickstarter toy/game inventors to offer some exclusives and first looks…the list goes on and on.
But alas, they are falling victim to the evolve or die fate. It’s sad to see brands I grew up with as a kid fail to keep up with the times, but at the same time, it’s exciting to see how technology is making our lives more informative and easier. However there’s no reason we can’t have both the benefits and efficiencies that technology provide us in online environments along with getting to keep some of those traditional retail experiences. Companies just have to think differently and incorporate more experiential marketing into their plans.
Click on WACC calculator to calculate the Weighted Average Cost of Capital (WACC) of a capital raise.