Toys R Us

Tom Dougherty, CEO – Stealing Share

27 September 2017

Toys R Us bankruptcy reflects new definition of toys

Most people recall brands like FAO Schwarz and Toys R Us when thinking of toys. (As many of you know, Toys R Us actually owns FAO Schwarz.) And now? Few of us do, because Toys R Us just entered bankruptcy protection, securing $3.1 billion to stay afloat.

Woe is me, is this yet another sad story of the demise of a iconic retail brand?

Sadly, I think it is but with a bit of a twist.

“What defines play today is not the same as it was even a few years ago. Kids play on their parent’s iPad. They play on their smartphones and they play with millions of other kids in MMOs and FPS on their consoles.”

Those dead retailers shut down because they fill a vacuum that doesn’t exist. Consumers continue buying the same products and services they always do, just in a different way. Apparel retailers don’t close because people stop buying clothes. Electronics retailers don’t shutter their stores because people stop buying TVs and computers.

Toys R Us falls victim to online play

Toys R UsWhen you think about toy retailing, however, the story is a bit different. The very nature of what stores like Toys R Us sell has changed. You can see this very clearly by watching kids at the grocery store or out to dinner. Look at how many kids bury their faces in an iPhone, iPad, LeapPad or some other electronic device. What is the definition of a toy today?

What defines play today is not the same as it was even a few years ago. Kids play on their parent’s iPad. They play on their smartphones and they play with millions of other kids in MMOs and FPS on their consoles. These screens are replacing traditional toys and the apps that run on them exist in the cloud somewhere, not in a toy store.

This is not to say consumers are completely ignoring more traditional toys. But they’re noticing them a helluva lot less. The double-digit same-store sales declines say it has a lot more to do with than simply the swan song of retail. The fabric of target audience is changing.

In the case of Toys R Us, online certainly impacts its business and the retail industry. But as a brand, the changing definition of a toy impacts its business more. Toys ‘R’ Us adapts by expanding its electronics departments but I really wonder if a big box toy retailer can survive en masse as it once did. I just don’t see the floor traffic coming back.

See more posts in the following related categories: bankruptcy Retail Toys R Us

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