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How to stop retail from eating itself

10th April 2018

Grayling's US creative director, Will Kunkel looks for lessons from the demise of Toys R' Us. 

I have few more fond memories than pulling into the Toys R’ Us parking lot as a kid, and few things have struck me more sad than the giant Going out of Business signs that now adorn their entry ways. It’s easy to point at private equity as the video that killed this radio star, but there’s more to it. And Toys R’ Us isn’t alone...

Be aware

One of Toys R’ Us’ earlier issues was signing a distribution deal long before Amazon was what it is today. Years ago they signed a distribution deal that at the time gave them scale, but in today’s marketplace, basically phased them out. You need to be looking forward as to how technology can help your business, not end it.

Offer an experience

Toys R’ Us had many opportunities to innovate. From sponsoring events, to creating pop-up theme parks, or driving more in-store events, they could have differentiated themselves and avoided becoming what they ultimately did – a warehouse. There was no experience to be had; if you were lucky, you could find an employee to answer inquiries, but even that experience was often replaced by in-store scanners and online inventory checks. If you have nothing more than inventory to offer, why would a customer shop there when they can find what they want cheaper and more easily online?


The age at which children stop playing with non-digital toys is becoming younger and younger. And again, while Toys R' Us offered plenty of video games and consoles, they didn’t offer anything unique, and saw stores like Game Stop pop up over time. You cannot rely on name recognition or heritage and ignore the changing tastes and wants of your customers.

People matter, too

There are examples of retailers who have found a way to remain relevant. REI, Nike, Tiffany and Co. and others have found a way to hire people with some subject matter expertise and to pay attention to their customers’ divergent wants and interests. Many high-end fashion brands have done the same. Others, however, may face the same fate or some version of the same fate as Toys R’ Us. For all their brand cachet or equity, Home Depot and Target are big box retailers that suffer from some of the same issues – the feeling that no one there knows better than you do, or that there is no one there to help you. And the bix box brands responsibility often goes beyond their own businesses – if they are the anchor of a shopping center or mall, it’s not only their employees whose livelihoods are at stake – it’s the other stores that rely on those stores as an entry point.

The brick and mortar advantage

The ubiquity and speed of internet shopping is great. As are demo videos. But there’s something to be said for being a destination and for offering a real, live experience. You can’t try something out online, nor can you try something on. And even with same day or near same day shipping, there’s nothing quite like the immediate gratification of having something in hand the moment you purchase. And there’s still no substitute for occasional real-live human interaction.

Will Kunkel is Grayling's US creative director. 

Grayling Team

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