The Sky is Falling: Part 2
Not again! It's falling again! Last time it was Lego losing sales and now, as everyone is aware, Toys R Us yesterday announced they are filing for bankruptcy, and the world is in a frenzy! Well, some are, at least. It certainly makes for good press.
None of this should come as a surprise to anyone in the toy industry. TRU has been having financial trouble for years, and there are many reasons for the state of their current business. They are one of many companies that have either folded or are closing retail stores. You read about it everyday. They have tried many different ways to get the consumer through their doors, without a lot of success. We are talking toys. What about the kids? They don't have a lot of influence where to have their parents shop, and those parents are different from those of the past. I'm not writing this because I know the business rules and projections for bankruptcy. I'm writing because I believe there exists a problem TRU, and quite frankly a lot of other brands are suffering from. I certainly got to know TRU over the years designing and developing toys. Toys that had to past the TRU muster to get listed. I noticed there was little conversation during presentations about one essential consumer aspect: Connection.
Toys R Us is the venerable, once king of toy retail, since 1948. Who didn't want to be a Toys R Us kid? It was the destination. If you needed anything in toys, it was there, likely just around the corner. And there was Geoffrey the Giraffe! You went there with mom and dad to see the latest cool toys. But that was then.
Back then, consumers were boomers and Xrs. They watched TV, viewed commercials whether they liked it or not, and up until the 90's were influenced by few other things. See it on TV; go to TRU and buy it. Move to today, and you have an entirely different consumer. A consumer who is digitally connected to everything, rarely, if ever, watch a commercial, and depend on the impressions of their friends more than anything else when making a decision. Millennials especially want to know the brand, not just the product. They want authenticity. They want to know what they're about, what do they stand for, where is their place in todays sustainability range, and how do they give back? Many brands and retailer have missed that connection. Toys R Us lost their story.
My good friend and colleague, Kevin Mowrer, in his recent blog about entertainment and the critical importance to have the story connect in many directions, discusses how Millennials want a relationship with a brand versus a transaction. They only want to chose stories that are meaningful to them. They want to have a personal experience with a brand, whether it's a video character, a clothing company, or a retailer. Cost is seldom considered if they really connect to what its about.
Toys R Us touts the biggest selection and unique exclusives, all in one place. How close and personal is that story? What makes them a destination that motivates a consumer to visit? They can get the same toys everywhere, Walmart, Target, Amazon. They have forayed into giving back but it has not connected to todays consumer. They will need to consider that connection story once they exit bankruptcy.
I do expect TRU will get organized and exit bankruptcy. It will be a process and a bit of a slog, but I think if they re-examine their relationship with the consumer, connect them to there unique story, and think about how to experience a relationship; things will work out. I hope so. I really like Geoffrey!