‘A new experience that plays off the nostalgia’: How Toys ‘R’ Us could rebuild
Toys “R” Us is readying itself for a resurrection.
The effort is backed by a company called Tru Kids, led by former Toys “R” Us chief merchandiser Richard Barry. It has rights to the Toys “R” Us brand and is made up of former executives from the now-dead toy retailer. The name Tru Kids first appears in court documents dated Dec. 11; the company was incorporated in New Jersey on Jan. 22. Barry and other Tru Kids employees contacted by Digiday did not respond to requests for comment.
A rebuilt Toys “R” Us would have to graft an old name on to a completely new model that favors smaller, boutique, experience-based stores. It’s a shift that’s challenging for big-box brands that once focused on large-format stores with a breadth of inventory. With the rise of online shopping and marketplaces, physical retail spaces are additive to that journey. That’s why it’s so difficult for once-dead brands to come back, and to be successful, the company would have to launch an online-offline approach with refreshed, experiential stores.
“They need to create a new experience that plays off the nostalgia of the brand,” said Susan Cantor, CEO of branding agency Red Peak. “You have to go to a much more specialized place with a more curated selection; [and] you need to go to places where there are other cool brands.”
Cantor said Toys “R” Us could take some lessons from FAO Schwarz, a 150-year-old toy store which closed its doors in 2015. It since reopened a store at Rockefeller Center late last year and is growing its store footprint at airports, a new setting for the brand.
The company is also up against competing retailers that seized on the new white space in the market. Since Toys “R” Us closed, major retailers including Walmart and Target have been growing their product offerings in the toy category. Over the 2018 holiday season Target expanded its in-store toy selection, with 250,000 square-feet in 500 stores for toys and brand-exclusive merchandise. Meanwhile, Walmart has since rebranded its toy store to “America’s Best Toy Shop,” which includes an expanded selection, Walmart-exclusive brands, and marketing through YouTube influencers.
According to the NPD Group, U.S. consumers bought $21.7 billion in toys last year, down 2 percent from the previous year. Toys “R” Us can still carve out a place for itself, provided it rethinks store layouts, improves in-store experiences for customers and considers new revenue models, said digital marketing consultant Judge Graham. Its plans to expand its private-label offerings, as reported in October, would underpin these efforts.
“How they bring it back is through a unique product line, a reason for kids to experience the stores, and smaller footprints,” he said. “It would be really cool if they had some innovation around recurring revenue models like Stitch Fix.”
A way to keep customers in stores could be events tied to movie releases and exclusive product lines resulting from that, he added. Meanwhile, the e-commerce site could mirror the experience in-store through detailed product guides and comparison tools.
To be effective, however, any effort to innovate on store experience must be complemented by competitive pricing, said Neil Saunders, managing director of GlobalData Retail. In a context where customers do price comparisons effortlessly online, a few dollars can make a big difference.
Others question whether brand recognition alone coupled with a new store and e-commerce foundation is enough to rebuild a tired retail model in a competitive category. Sucharita Kodali, retail analyst at Forrester and a former Toys “R” Us employee, is skeptical of its prospects.
“The only reason you would want to resurrect it is to suck what remains of its brand equity dry,” she said. “Circuit City tried a relaunch and it was pretty inconsequential. I suspect this would be similar.”
Member ExclusiveDTC brands aren’t feeling the Black Friday pressure
In the five days following Thanksgiving, there's usually a wave of retailers offering anywhere from 20% to 50% off of their products. This year, that wave will feel more like a never-ending tsunami.
Member ExclusiveAs its ecosystem grows, companies are becoming reliant on Shopify for more parts of their business
Eight years ago, startups turned to Shopify primarily to sell products online. Now, a startup might turn to Shopify to help fulfill orders, get some cash for their business or use its point-of-sale system when it opens a physical store.
Member ExclusiveVertical marketplaces are the next hot investment area as DTC brands look for more places to sell online
For many direct-to-consumer brands looking to sell and ship their products through someone's website besides their own, there's still only one dominant choice for them in the U.S., and that's Amazon. But investors are trying to find -- and fund -- new types of alternatives.
SponsoredPublishers will lead the charge as cookie-less advertising becomes the norm
Steve Wing, managing director, EMEA, Magnite As the advertising industry moves closer to a cookieless world — one in which browserless environments including connected TV (CTV) and mobile in-app are an increasingly large part of ad budgets — publishers will have an increasingly important role in developing the future of identity. Segment creation and identity […]
Member Exclusive‘On a lot of people’s minds right now’: DTC startups are in a holding pattern until after the election
The election isn't the only thing on direct-to-consumer startup executives' minds -- after all, once the election is over, Black Friday is right around the corner. But Election Day also can't be business as usual
Member Exclusive‘More than a moment’: SPACs give DTC startups a potential new exit strategy
There's a new most-talked about acronym in the DTC world these days: SPAC, which stands for special purpose acquisition company.