Time to Rethink Retail? Reimagining Toys R Us

We’re coming to the end of the Black Friday/ Cyber Monday sales period… and early reports are showing that more people made purchases online rather than in shops. But is the internet solely to blame for the declining high street?

A walk down the high street is a tour of failed businesses that survived for decades…

“That used to be Woolworths”…. “JJB Sports was on that corner”… “remember when we used to go to that Blockbuster on Friday night.”

Almost every town centre in England and Wales has declined since 2013, with some losing over a fifth of stores. There are more empty shops than ever before on the British high street, with the vacancy rate passing 10% this year. 

For over a century, the only way we could buy something was to go to go on foot/ horse/ penny farthing/ car to a physical store, pick up your desired product and pay at the till. The high street, and later purpose-built out-of-town retail parks, were booming for decades with little threat to their existence. 

We all know the story that followed, internet shopping launched in the nineties, exploded in the early 2000s and started knocking long-standing retail giants off their perch one-by-one.

Specifically, Amazon came and turned the world of retail on its head. Customers didn’t have to leave their homes - the unique selling point of a physical shop could no longer just be that they sold a product, they had to offer something more. 

So we said goodbye to stores which never really had a strongly defined brand purpose - Woolworths, Comet, British Homes Stores. Blockbuster might have stood a chance if it took the opportunity to buy Netflix when it was offered to them for $50 million in 2000. 

In truth, the customer wasn’t always the most important stakeholder for some retail brands. The winners of retail used to be powerhouses who could throw their weight around with suppliers, taking advantage of economies-of-scales to buy products at a lower cost and quicker than smaller competitors.

Now, a customer-first approach is not only desirable but it’s essential for success. That’s why retailers such as JD Sport, Zara and Primark are bucking the trend in the declining high street, focusing on satisfying changing consumer tastes and giving them the retail experience they desire.

Let’s take a closer look at one of the giants of retail, Toys R Us, to see why it failed in the internet-age and what lessons retailers can learn from its demise… 

Lessons from Toys R Us

Toys R Us is treasured childhood memory for many of us. The experience of walking into the store with shelves twice as high as your parents stacked with every toy you can imagine filled you with joy. Getting a toy was a bonus, but just the experience was enough to satisfy an imaginative young mind. 

For me, that was the 1990s and, it’s almost quaint now looking back. 

But then, the child and teenager entertainment industry really exploded in the new millennium, with more and more homes owning video consoles, and then nearly everybody owning a smart phone. A visit to a toy store didn’t do it for kids anymore as an entertainment buzz.

Combine this with the explosion of the Amazon machine this century and it spelt the end for a company that failed to adapt to changing consumer behaviour. Kids have replaced the experience of visiting a toy store with constant dopamine hits on their phones. And, when it comes to buying a product, any toy or game could be bought by their parents online at a click of a button. 

Not even nostalgic loyalty could save Toys R Us. 

Amazon has eaten Toys R Us alive as purely a seller of products. But they had something that Amazon didn’t - a hell of a lot of physical retail space. And it’s retail space that was ripe for developing into more of an experiential shopping environment. 

Last week, it was announced that Toys R Us opened a new store in New Jersey since going into receivership in 2018, focusing on more of an interactive shopping experience. 

And it’s a big step in the right direction. The ‘Experience Economy’ is real phenomenon. 

It’s reported that 78% of millennials prefer to spend their money on experiences rather than buying a physical product. And guess what? Some millennials are now parents (a ‘millennial’ is born between 1981 - 1996, so the oldest is currently 38 years old). 

Anybody with young kids knows that weekends are usually packed with trying to find something to do to get children out of the house and keep them entertained for a few hours - sports training, music lessons and drama clubs to name a few.

Step forward what Toys R Us should have become years before its demise… THE go-to destination to keep your kids entertained.

It should have been the first place that parents thought of when thinking about how to keep their kids occupied and entertained for a couple of hours. And kids should have been begging to go there for the experience.

It should have transitioned into an indoor entertainment centre rather than a traditional toy store, split into different areas for different age groups:

• For Babies - learning experiences for new parents and their babies, guiding them through each developmental stage from newborn to toddler. 
• For Toddlers - a huge play centre full of ball pits, slides, swings…Essentially, the ideal place to tire out toddlers.
• For Preadolescents - Movie screenings, indoor mini golf, interactive learning, fun and educational games. And be known as the ideal place to host a kids’ party. 
• For Teenagers - Toys R Us could have been at the forefront of the esports revolution, one of the fastest growing sports and entertainment sectors in the world (expected to generate $1.8 billion in revenue by 2022) by providing gaming arenas in its stores. They could have been positioned as the physical home of the new esports world and involved in conversations about lucrative sponsorships, TV deals and partnerships.
• For Parents - Tie in with a coffee shop, cafe and/ or restaurant. Make the experience as enjoyable for the parent as it is for the kids (a rarity in the world of family entertainment!). And use it as an opportunity to encourage parents to bond with their kids - for example, with board games, painting classes or interactive games. 

And each of the areas could have been surrounded by toys, games and accessories sold by Toys R Us targeting each specific age range. It should be as easy as possible to buy the product by offering home delivery on any product available in the store that your child may have played with. 

Discounts could also have been offered on products when you attend an event - for example, 20% off the new FIFA game for esport players, 15% off a new baby pushchair for new parents, 10% off all products for children attending a birthday party at Toys R Us, to keep customers happy and keen to come back for more. 

A New Retail Experience 

While the desire for experiences is growing, the thirst to buy products shows no sign of slowing down. You just have to look at Amazon’s staggering revenue figures. In the twelve months ending 30th September 2019, it was at $265 billion, a 20.14% increase year-on-year. 

So why is this important from a marketing and communications perspective?

Well, at its core, marketing is about building brand reputation and generating more customer leads. Moving retail to a more experiential approach can help with both objectives.

Build Brand Reputation

You want people to feel positive emotions and feelings when they think about your brand. Giving them in-store experiences that they’ll enjoy, whether it’s entertaining, educational or a combination of the two will help give them that warm fuzzy feeling. 

Even if they don’t buy a product when in store for an event or experience, there’s a good chance they’ll subconsciously think of your business next time they want to make a purchase. Emotional attachment is an underrated factor in customer loyalty. Often, people can’t explain why they are loyal to a certain product - they just like the ‘feeling’ associated with it. 

And it’s not just the multi-nationals that should focus on the experience. It's also a valuable strategy for local, independent retailers. Retail shouldn’t be limited to just selling products, it’s about sharing your expertise. Think of the butcher that offers the ‘unique BBQ training course’, a clothes store giving you a free personal shopper and a glass of Prosecco as you try on a new outfit, or an off-licence giving lessons in wine-tasting.

Generate More Leads

A more positive relationship with your brand through more enjoyable experiences will naturally give your business a better chance of attracting more new customers, retaining existing customers and increasing the frequency of store visits.

By building your retail store around hosting special events and experiences, you would capture important contact details when they sign up. So, you can then share information about upcoming events, new product launches and offer special discounts in the future - all potentially leading to increased sales. 

If your store allows interaction with the products (which it should), it also gives the business owner real-time data about what the customers like and what they don’t. This could help manage stock more effectively as you get a better understanding of the levels of product demand and gives you the important data to know which of your best performing products you should use in marketing promotions.

Focusing on experiences also gives you vast opportunities to produce content at scale about your business. Get footage from events, take photos, interview attendees - all of this content can be shared on your social media channels, giving your business more positive exposure and better engagement with existing and potential customers. 

Retail isn’t dead, it’s just adapting into an experience-first sector. That’s why even tech giants such as Apple are snapping up thousands of acres of retail space.

If any part of your business has a physical retail element to it, think of yourself as an entertainment and informational centre first. 

Play the long game. Give your customers an experience to remember. It will build your brand and generate new customer leads naturally as your reputation as a customer-centric store is enhanced. The sales will come. 

Some traditional retail stores may be dying but the long live the new retail experience!