Farewell to toy stores leaves the toy industry at a loss
Magid’s Mona Neman, shares her thoughts on the fall of Toys ‘R’ Us and the future of toy retailers.
Back in September of 2017, Toys ‘R’ Us filed for bankruptcy and announced the closing of their stores. The latest casualty of brick-and-mortar retailers will have a huge effect on toy manufacturers such as Mattel and MGA Entertainment. The owner of MGA Entertainment (developer of BRATZ and LOL Surprise) offered $200 million of his own money and has been trying to raise funds to save the stores in the USA. Toys R Us has not accepted his bid.
The biggest question from the announcement is what does this mean for the toy industry and the companies that depend on it?
A child had a great soccer match, parents took them to Toys ‘R’ Us. A child had a great report card, parents took them to Toys ‘R’ Us. For a 4-year old child who loves his Thomas the Train set, it was the perfect place to let him explore new tracks and accessories for the set. Target and Walmart’s in-store inventory do not compare. As a result, many parents and kids alike will have to shop elsewhere.
Today, it’s no secret that children’s play habits have changed. They spend less time with physical toys and more time with screens. During screen time, children rarely, if ever, see commercials. Many children may not know a place such as Toys ‘R’ Us ever existed. As for family life, both parents usually work Monday through Friday and weekends are spent recovering from the week. Basically, there isn’t much left for a toy store. Basically, convenience is key in the digital age. Since family are staying at home more than ever, being able to be a convenient customer experience will attract customers that will be loyal to what is easy.
Along with convenience, there needs to be an experience that captures the user to keep up. Even though ToysRUs had an unbeatable in store experience, their website shopping was a different story. Compared to their digital competitors, they had a “clunky” experience. Not only was their experience less superior to that of other websites, the customer service experienced online wasn’t what it needed to be. Online customer service needs to be instantaneous these days to keep the customers focused on your business and what you offer.
Since ToysRUs come about in 1957, consumer behaviors have changed. Shoppers want something that is novel or customized to cater a specific need or want. Essentially, ToysRUs didn’t adapt fast enough to the online game, and Amazon specifically. Amazon is great for its speed and selection because of their infinite choices delivered to your front door. Magid’s Retail Pulse study found that one of the main reasons for the decline of Toys ‘R’ Us was digital competition. In recent years, the original big-box toy seller had fallen behind Amazon and Walmart. Target wasn’t too far behind either. The store chain was unable to capture e-commerce dollars because it was more expensive than its competitors. There is much competition among other toy retailers and price will be an important factor in driving loyalty.
The feeling of taking a child to a place where they can test ride a bike or different LEGOS by play may not be gone. Local book stores have seen a resurgence and there could be great opportunities for local toy stores to provide high touch personal experiences for shoppers.
