They had it coming
I didn't expect this to be the first blog post on my new website but I couldn't let the blame and shame directed at my generation go unanswered. I was born in 1986 and yes, I am a proud millennial and an original "Toys R Us Kid". I even remember the first 2 bars of the song, (fellow millennials, sing along) "I don't wanna grow up, I'm a Toys R Us kid, They got a million toys at Toys R us that I can play with" I grew up on Toy's R Us so you can imagine the sarcastic eye-roll and sigh that was unleashed when I read the following:
"Toys R Us says millennials not having kids hurt the company"
Don't hate the player... Hate the game. Toys R Us had a pretty dated and lazy business model. They were a big box niche store that sold toys made by other manufacturers. There were no exclusive toys, products, services, or price incentives. On the flip side, Babies R Us had a similar business model but their products were in a properly positioned niche that allowed them to be successful. Unfortunately, we millennials (and our low population of kids) have grown much too sophisticated in our choices of "toys" to sustain such a dated niche. We simply out grew it... I'm surprised that Toys R Us lasted this long. The only reason Toys R Us was so successful back in the day, was because they were the first and biggest kids on the block with all of the toys. Things have changed over the years and companies like Walmart, Target, BestBuy, and GameStop have carved away at their market share. There is no reason to go to Toys R Us over the other stores.
Don't hate the player... Hate the game
Walmart and Target are big box stores with large Toy and Bike aisles. Maybe not as big as Toy's R Us but big enough to have all the desirable toys available. In addition, they also sell, bread, milk, clothes, cleaning supplies, and everything else under the sun. Each item in their infinitely diverse inventory represents an "excuse" for you to drive out and spend your money at their stores. Heck, you might even find yourself walking down the toy aisle for that Barbie Doll your daughter wanted.
Bestbuy is basically the new Toys R Us for millennials. Think about it. Same business model as Toys R Us targeting the same people who probably begged their parents to go to Toys R Us when they were kids. Now those kids have grown up and become much more sophisticated. The toys have grown equally sophisticated and thus we go to best buy to see all the new grown-up toys; drones, tablets, phones, computers, cameras, smart home devices, smart-watches, appliances, and more. BestBuy continues to stay in business because their employees are knowledgeable and they are selling the products that most people want and won't outgrow. Aside from the apple store, BestBuy is one of the few nationwide stores that offer the experience to see, touch, and learn about the various new products in person.
Lastly, let's talk about GameStop. GameStop is extremely niche destination store but their success lies in real estate. They sell new games, used games and hobby grade action figures. Game Stops are smaller and they are usually located in malls or shopping centers. They rely on the foot traffic in the malls and shopping plazas to get people in their stores to pick up the physical copies of video games that their customers could have downloaded from the comfort of their couches. Because their stores are usually small rented spaces, the cost to open and run a GameStop is significantly lower than that of a Walmart, Target or BestBuy. In addition, GameStop gets to sell expensive games and high-end gaming consoles. GameStop has also partnered with game developers to embed downloadable content in the games that are reserved at their stores. GameStops are just as nimble as they are effective. I see this boutique method continuing to be successful in the future. BestBuy has already began placing small format stores in malls.
What they could have done...
Toy's R Us had ample time to change their business model in a creative way. They should have reformated their business to cater more to parents. Babies R Us was a great example of this. It's a shame that they are going down with the mothership. They were one of the few big-box retailers catering to expecting parents. Babies R Us had better furniture, bottles and baby clothes than Walmart and target.
Toy's R Us could have continued to sell toys but they need to capitalize on the experience. What if Toys R Us allowed you to open and try out the hottest toys? What if they had an arcade with all the game councils in the stores? What if there was a childcare component to the business that allowed them to climb through tubes and jump in ball-pits and they charged admission? What if Toy's R Us brought out the mascots and it felt like Disney Land when you walked in? What if they had theme parks with real Toy Prizes? What if they had a small television network similar to Baby First? What if your kids actually wanted to be a Toy's R Us Kid? What if they did something...different?