The British Broadcasting Company (BBC) offers special insight into the demise of Toys ‘R Us. While the chain had more than 800 stores in the United States and a 15 percent share of the U.S. toy market, it also enjoyed a major presence in the United Kingdom (UK) market.
In a Feb. 28, 2018 broadcast the BBC offers special insight into Five Reasons Toys ‘R Us Failed.
Location is the first of the five reasons cited in the BBC broadcast. It pointed out that in the earlier, successful days of Toys ‘R Us, out-of-town locations offered a special destination event to customers.
“In the 1990s, the (business) model still worked for UK shoppers keen to pick up the latest Furby, Power Ranger or Tamagotchi. At the time, cheaper out-of-town real estate with purpose-built free parking, plus places to eat, offered an easy weekend day out,” according to BBC. “It was ceiling-to-floor toys. It was a destination,” says retail analyst Kate Hardcastle from Insight With Passion.
“But these days, out-of-town can mean out-of-sight compared with rival outlets.”
New technology is the second reason cited by BBC. An 8-year-old can download an app in 30 seconds, BBC says. “Birthday presents are now tech-related, such as virtual reality headsets, drones and go-pro cameras.”
Children seek experiences rather than possessions. “So a trip to the toy store is competing with trampolining parks, laser tag and go-karting,” according to BBC.
Pricing is the third reason BBC cites. “When it comes to toys, brand loyalty is to the manufacturer. You want to buy a box of Playmobil, a Barbie doll or a Scalextric set – it doesn’t matter who you buy from. That makes the market on and offline fiercely price-competitive,” according to BBC.
Lack of drama is reason No., 4. According to Hardcastle, “for a magical place, it’s not very magical, If you can’t compete on price, you can at least compete on theatre. If I walk into the Lego store … the first thing I look for is not the products piled up, but the huge benches of Lego to play with. And the team members are there waiting to build with me. That’s very exciting for a child.”
Hardcastle calls Toys ‘R Us “mundane and lacking in inspiration.” She says, “The main problem is simply that stores are too big and unwelcoming.”
Lack of imagination is the final reason cited by the BBC. “It didn’t feel like a kids place,” said Hardcastle. “They should have put children’s experiences front and centre.”
Another retail consultant Steve Dresser is also quoted in the BBC article: “Even if they (Toys R Us) didn’t want to give over their stores to the kinds of hands-on experience that you get in Hamleys or a Lego store, they should have done more to keep customers happy, been less functional, more on-trend. They just needed some buzz. The general feel isn’t one of fun, it’s one of tiredness.”
While the BBC gives a different spin, the basic reasons for the Toys ‘R Us failure are universal.