Back from the dead: what retailers can learn from Toys R Us’s comeback

27 September 2019


Toys R Us closed all its stores in the United States last year due to bankruptcy and competition amongst other top retailers. Through a partnership between Tru Kids Brand (parent company of Toys R Us) and b8ta, the well-loved toy store is back and better than ever.

My parents bought me my first bike from Toys R Us. Every visit, my siblings and I spent hours looking and playing with the toys and would always get in trouble for leaving them in the aisles.   

The re-opening of Toys R Us is not only a monumental event for consumers, but it also brings attention to a larger issue in the retail space. Shopping preferences and habits have changed over the years and retailers now need to adapt in order to avoid being a part of the retail apocalypse.

The new Toys R Us features open play areas, interactive displays and spaces for special events and birthday parties. A former Toys R Us executive mentions that this new concept for Toys R Us is aimed at making the shopping experience fun and interactive for both the kids and the parents. Going back to my experience at the old Toys R Us, I remember wanting to play with everything and enjoying the “try me” parts of the toys since I was unable to take them out of the box. With the new store layout, retailers are giving the shoppers (in this case, the children) the ability to interact with the toys before they buy them.

It’s never a great thing when one of your favorite retailers from childhood announces that they are closing their doors for good. In fact, Toys R Us is just one of the many retailers closing stores within the past couple years. According to Coresight Research, 12,000 US stores are estimated to close by the end of 2019. This is not just happening in the US, the UK has already seen 2,868 stores close in the first half of this year alone, up 6.5% from the previous year.

So, why is this happening?
The retail apocalypse is defined by the continuing trend of Americans making purchases online. This influx in online shopping is just one of the many reasons why retailers are closing their doors. Over-expansion of malls, rising rent, bankruptcies of leveraged buyouts, low profits outside holiday binge spending, delayed effects of the recession, reduced consumer confidence and hence overall spending have all been other reported reasons for store closings.

But there’s more going on here.

Retailers need to pay attention to the changing consumer culture.

According to Deloitte, consumer behavior changes alongside a changing environment. Therefore, some retailers are closing their stores due to the inability to meet the consumer of today’s needs. Consumers today are shopping with their emotions rather than their wallets and demanding more experiences while shopping.  With many innovations entering the retail space in the last couple years, retailers are forced to get with the program or get out.

So, what can retailers learn from Toys R Us’s comeback?
For starters, retailers should not underestimate the power of how human emotion can drive purchases.

Allowing for an interactive atmosphere at the store not only gives consumers the freedom to shop with ease and comfort, but also gives the consumers the opportunity to form attachments with the products. This emotional connection that is established through an interactive shopping experience makes purchasing products much more meaningful.

Also, adapting to experiential retail not only changes the experience for the consumer, but also for the employees and staff.

As retail shifts its focus to customer experience, the employees will need to adapt and take on more customer-centric roles. One of the best ways to redeploy employees into these roles is by using automation.

Automation can be implemented in stores based on what processes a retailer feels needs to be automated. For retailers, there are three areas in which automation can be a suitable alternative.

  1. Predictable manual tasks
  2. Routine tasks
  3. Computational tasks

For example, automating cashier tasks such as the handling of cash will allow the employees to dedicate more time to create valuable connections with customers. Automating these processes will also enable the retailer to create new store designs that satisfy every stage of the customer journey from entering through the front door, browsing for products to queuing up and finally checking out. Automation can provide a more stress-free journey, while preserving the magic of the in-store retail experience.

Lastly, experiential retail is a novel concept for many retailers. One important thing to note here is that brick and mortar retail isn’t what is dying (rather, it is changing). Sure, e-commerce is becoming “the wave” for millennial and Gen Z shoppers, but it only amounts to 19% of total sales in the retail market. Although consumers enjoy the convenience of shopping through their phones and computers, there’s still value in visiting the physical retailer. As new advances continue to enter the space, retailers need to develop ways in which they can combine the convenience of online shopping, while preserving valuable in-store experiences (an example of this would be “buy online, pick-up in store”, which I personally enjoy).

Toys R US has risen again with a focus on improving the customer experience. Other retailers must follow in order to weather the challenges of the current retail environment. To learn more consumer preferences in retail or improving the payment process through automation check out What customers really want, and how we can help  or  How to Feel Good Paying


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