Toy ‘R’ Us is closing down. While many saw the this as a slow and inevitable death, it still sends shockwaves through the business community.
They were the top leader in their industry for decades, and in an industry that is still growing today. So there’s a lot of speculation around what they did wrong, and what they could have done differently.
There’s the business finance side, where many question their choices of going public, having Amazon handle their fulfillment or practices that led them into debt.
But I’m going to take a look at the branding and marketing perspective because it affects large corporations and small businesses alike.
Here’s what Toys ‘R’ Us should have done differently to not only stay in business, but also thrive.
Understand Their Customers’ Challenges and Desires
Customers change. Customers problems and desires change. A good business can react to those changes. A great business can anticipate them.
At its height in the 1990’s, Toys ‘R’ Us was great for the pre-online world. They ran TV ads during kids shows, prompting kids to want to go to Toys ‘R’ Us and run through the aisles. And you had to go to a physical store to buy something, so parents had no problem with driving to one.
But those kids grew up to be parents in a digital age, and their kids have only known an online world.
Their customers are busier and don’t have time to go to a store – they prefer to browse and shop online. If they do go somewhere, it’s gotta be worth the trip and someplace they could get multiple things done.
Kids are growing up in much larger “movie universes” where there are constant hits with Marvel, DC, Star Wars, and Lego.
Paying attention to the challenges and desires of their customers would have helped Toys ‘R’ Us to shift earlier, rather than relying on their past “tried and true” method of simply having a large warehouse of toys.
Refined Its Brand Identity
Simply put, Toys ‘R’ Us got comfortable in their previous success and got lazy. Their brand identity deteriorated.
If you poll any of their customers, you’ll hear the same complaints. You can’t return toys. The stores are old and dirty. The sales people are rude.
Even in an online world, physical retail stores still have a role brand identity. Compare this to walking into an Apple store where it’s modern, spotless, and all the Apple store employees are helpful, knowledgeable, and overly excited about Apple.
Beyond maintaining a strong brand identity, Toys ‘R’ Us needed a brand identity that would resonate with a new generation of customers. It needed to innovate and rebrand itself to avoid becoming an irrelevant, legacy company.
Adapt to the Changing Market
As trends and technologies change, so companies need to change with them. Businesses stay alive by adapting to the change. Business thrive when they are ahead of the change. And businesses lead when they are creating the change.
Toys ‘R’ Us just stayed the same, and tried to change too late. They used the the same business principles and the same marketing strategies as they always did.
As consumer habits shifted to online, they should have adapted to online sales. As media trends moved towards social, they should have adapted their marketing to those platforms. As large retail stores became obsolete, they should have adapted their physical locations to be experiential.
Tangible Things They Could Have Done
So how does all this translate into practical steps they could have taken? Here are a few:
- Made the move to online purchasing earlier
- Setup faster shipping, free shipping, and in-store pickups
- Offer returns
- Get rid of their large stores and transition to multiple smaller stores
- Carry a smaller in-store inventory of only the latest toys with fast-changing lineups
- Hire staff who love kids and love toys
- Make their stores experiential and themed to the latest movie
- Have play areas where kids can try out toys
- Provide weekly activities and contests for kids to participate in
- Create a cafe-like space for parents to sit down in
- Jumped on the latest social platforms faster (Instagram & Snapchat)
- Made toy unboxing videos on YouTube
Of course it’s all easier said than done. But the gist of it is that they needed to adapt to online business faster. They needed to rebrand their retail locations to be destination stores that both kids and parents wanted to go to. And they needed to create the type of marketing media that kids would watch, on the platforms that kids are on.
It’s easy to blame Amazon, Walmart, and Target for killing Toys ‘R’ Us. But that’s just not true. Those companies changed with the times, and so did all the other companies that are still in business today.
Toys ‘R’ Us didn’t. So if a large corporation that is an industry leader can die, what does that say about your business? What are you doing to ensure it will be alive and thrive in the future?