RIP TRU

Well today is a sad day in the UK. As the country succumbs to heavy snowfall, it seems all of civilisation is falling apart. KFC still has no chicken and both electronics retailer Maplin and leading toy retailer Toys R Us have gone into administration clearing the path to global domination for Tesco.

Joking aside this is terrible news for industry. To be sentimental for a moment. When I was a kid, I wasn’t able to go to Toys R Us very often. Their business model thrived on their stores being slightly out of the way, so naturally there was little cause to go there for parents wanting a quiet life like mine. But nevertheless on the rare occasion I did get to go there, it was an event and an experience. You were spoiled for choice and the release of endorphins was akin to what adults get seeing a fully stocked fridge. Back in those days just seeing what was out there was exciting enough, even if on that particular day whoever had taken you into the lion’s den wasn’t feeling particularly generous.

A lot of that has changed though. Of course we have the internet which is just a more immediate form of internet shopping and I am of the generation that considered the Argos catalogue to be the toy bible. With the internet we can view and buy products direct from the manufacturer. You know what is and should be out there, what is coming and budget accordingly and you can pre order for delivery the day it comes in stock. The choice is basically much wider. But this is one of the few things that doesn’t benefit the target audience. How many kids under the age of 5 can actively internet shop. Probably more than I expect but probably not many. Sure, man of them can work Youtube etc and apps and games. But how many are going to do product research. Kids learn by seeing and doing, which is why having a large specialist retailer like Toys R Us is important. It teaches kids about the logic of awareness and choice to some degree. Throwing them into the internet is just too broad even if it does have the benefit of instant-ish gratification although, so do stores. It is one aspect the medium can’t compete with, which is why Kids mainly use the internet and technology for access to games, media and other experiences. But this circumvents in itself one of the most important things, the value of play and imagination.

But at the same time, Toys R Us’ crucial flaw has been failure to keep up with the times both with its structure and its inventory. Structurally, the placement of stores slightly out of the way was a great model in its heyday. But in the current environment, people are not prepared to travel far, if at all, hence armchair shopping. If Toys R Us had secured mid sized locations in new shopping centres and high streets that are popping up, it would be a different story as they could pick up on casual shoppers being tortured by their kids. If a customer has a choice between a limited selection in the supermarket or the area they are already in, that is preferable to a wider selection out of the way. The lack of prominence in the high street has probably lead some consumers to think Toys R Us had folded long ago. The only newsworthy info about Toys R Us in recent times has been its struggling performance. Brand awareness is hugely important.

Then there is the whole online issue. Toys R Us’s website was to be honest, crap. Whilst it did have a stock location system and reservation facility, often this would be slow and out of date leading to frustration from customers who would reserve an item for pick up, arrive and it not be there. Not a good experience. They did not offer pre orders, which was absolutely crucial in this market, where collectors like myself want to secure an item in advance of sale rather than join in the mad unannounced rush as and when it appeared. Pre-orders would have given a good indication of how a product would sell and whether to order more. Rather than ordering a cautionary amount just so it doesn’t linger on pegs. Given that smaller competitors were able to offer this facility, they had major advantage over the UK’s leading chain of stores. Toys R Us really could have learned not only from major competitors like Amazon, but smaller specialists that stock what the loyal consumer wants. They did have a stock alert system, but sometimes these would be sent in the middle of the night! Or long after the product had already sold out.

Then there is the pricing. Often, Toys R Us products would be sold at RRP or slightly above. Given we live in an age where you can walk up an aisle and look up the same product on Amazon, see if it’s cheaper, then order the same product from elsewhere under Toys R Us’ roof, that isn’t good enough. In the UK we don’t have a coupon system like in the US where you can get a straight up 10 to 20% off anything. Here what you see is what you pay and maybe as a seasonal offer, if you spend £100 you might get £10 off your next purchase with a bunch of small print restrictions. Although after spending £100 you’re probably not going to want or be able to afford anything else. Completely unbeknownst to me, Toys R Us have apparently had a price matching policy this whole time. I don’t know what the Ts&Cs are on it but WHY WERE THEY NOT PROMOTING THIS???? But then, why were they not promoting themselves? I can not remember the last time I saw a Toys R Us advert on TV, although I’m probably not the target audience, but parents are. The only time they seem to get a push is around Christmas, where you are preaching to the converted. With internet ads, they come up advertising a product on the same page where you can buy the same product cheaper. Time was, Toys R Us was a force to be reckoned with. They could have been the market leader but have become just another toy shop. The biggest perhaps, but not the best at what they do.

So where does that leave us? It leaves a big vacuous hole in the market and the industry. I don’t think anyone will be in a hurry to fill that hole. Even if they could, they would be in danger of repeating the same mistakes. The downfall of Toys R Us is a stark warning. The ripples of this will be felt for a long time as the buying power of the biggest retailer is now gone. This significantly impacts the diversity and range of products that could be brought into the UK. Lines that just can’t get enough retailer orders will evaporate. This will have an ongoing impact on how and what children play with in future. It’s ironic however that the first indications of something wrong came from the US, where Toys R Us is a separate entity, and we were consistently reminded of that and reassured this would not affect the UK. Yet Toys R Us UK has collapsed and folded within that time and the US arm is still standing.

Speaking of the US, as a footnote here comes my own personal point of contention. The retailer exclusive. Linked to the above, items become store exclusives as a draw to a particular location, often because other retailers aren’t interested so a store like Toys R Us can take up the exclusivity option and have sole selling rights to a particular product. Despite being on life support, Toys R Us has still been entering into these deals. For Marvel Legends there is a Scarlet Witch and Vision two pack, then for Star Wars the Black Series, they have secured Zuckuss the last bounty hunter.  Two packs do not seem to materialise in the UK anyway and it seems Toys R Us has the sole option on them as they do not get offered to other retailers. But single figures like Zuckuss usually make it. But with no Toys R Us, it seems like a very significant, trans atlantic line in the sand is being drawn. If Toys R Us in the US goes down before Zuckuss hits shelves, we could be looking at a very rare ‘lost’ figure on the way.