The Internet pundits are taking to their keyboards in droves. They’re trying to explain why we’ll soon be living in a world without Toys R’ Us Kids. The general consensus about the primary reason for the fall of the toy retailer seems to be a lack of funds. Specifically, the company couldn’t pay off its debts, afford higher labor costs, rebound from the financial crisis, etc. That being said, Toys R’ Us also failed to alter its business model to meet the changing needs of consumers.
Blame It on Millennials
Millennials are killing big box stores. This seems to be the default explanation that many are giving for why large businesses like Toys R’ Us are going under. Is this really fair, though? It’s true that Amazon and other online retailers who are increasingly offering free shipping along with competitive prices, are giving brick-and-mortar locations a run for their money. However, retail giants like Walmart have gone to great lengths to appeal to the millennial demographic.
For example, they’ve expanded and improved their eCommerce offerings, purchasing Jet.com and offering free two-day shipping on their own site and app. Also, during the 2017 holiday season, Walmart partnered with Google and offered voice-assisted shopping, encouraging consumers to make purchases through their Google Home devices. These strategies are paying off for Walmart. Thus, it seems that the Alan Deutschman catchphrase “change or die” still rings true when we look at companies like Toys R’ Us and Sears that failed to adapt to a new shopping culture.
Blame It on the Kids
Some argue that we should blame those even younger than millennials: today’s children. Nowadays, kids are losing interest in physical toys more quickly. For example, in our Digital Marketing Fundamentals text, we note that Barbie’s target market used to be girls ages 3 – 9, but recently Mattel has seen their target demographic shrink to girls 3 – 6 years old. What’s happened? Children are now playing games on smartphones and tablets. So, how could Toys R’ Us have adjusted to this new reality? Some point to a missed opportunity, as the company failed to put greater focus on building its Babies R’ Us division. After all, babies will always need cribs, pacifiers, diapers, etc. Yet, this leads us to another problem: there just aren’t as many babies as there used to be.
Where Will Toys R’ Us Kids Go?
Toys R’ Us kids and their parents have a lot of options beyond Amazon and Walmart for toys. Take Mastermind Toys in Canada as an example. This toy retailer is successfully expanding its stores across the country. However, it currently operates 82 locations, whereas Toys R’ Us ballooned to 735 across the U.S.
Another avenue that many, including millennials, are choosing to follow is shopping locally. They are opting for smaller businesses that focus on fulfilling the needs of niche groups. They also offer personalized service and things like do-it-yourself workshops. In addition to providing better service, and exciting in-store events, bigger businesses can compete by having a strong content marketing strategy. The focus of this strategy should be to provide the consumer with valuable information, rather than a straightforward sales pitch.
What Can We Learn?
Adapting to the changing needs of your target audience is essential for brand survival. That’s why it’s crucial to engage in practices like social media listening. Find out where your consumers’ interests lie, what their pain points are. How can you relieve that pain? How can you best address their concerns online and in-person? Discovering the answers to these questions early and addressing them can help you to survive in today’s rapidly evolving and highly competitive marketplace.