Toys ‘R’ Us, Back from the Dead, Will Open U.S. Stores in 2019
bloomberg.com
bloomberg.com
Around here if you add a playground to your restaurant you will immediately get families.
They should keep toys in the back and make the store one big toy playground. Playscape, track for riding bikes and electric cars, sand area, water area, walls of video games etc. Have "lands" similar to disney where those types of toys are available to play with. Have guides to help kids play with toys. Consumable toys can have a charge to use or art classes, science classes, electronics, etc.
Catalogs or computer screens that let you buy the toy and someone brings it from the back.
Parents will bring their kids to play and will end up buying things.
And then there's concessions (IKEA and Costco do it).
Shopping as entertainment adventure rather than pushing a shopping cart down aisles of loud marketing boxes floor-to-ceiling.
And, they need to work with apps and games publishers to have the next Cabbage Patch or Transformers not just in iPhone-like limited supply, but as a whole launch event.
Embrace and extend, Toys R Us!
This way, they earn a steady income regardless of whether someone buys it in store or tries it in store and then buys from Amazon.
The toymakers would pay assuming that letting people try the toys in person leads to better sales, which should be the case.
If you could go in and ask questions and get knowledgeable answers to technical things, it might be helpful. Like early radio shack, not like right before it died.
If it's a chain, it will never reliably have knowledgeable employees in all of its locations. Nobody with electronics knowledge is going to work for a dinky salary racking up capacitors on the cash register of some little store, unless they have life-long personality problems.
It basically has to be a family business with a knowledgeable owner, who passed some of it on to the kids.
Unless they're a college student or a retiree.
Grr; I know what I'm doing, and found the parts I need in three minutes. Can I pay now?
Nope, some dolt is explaining some cockamamie project idea to the clerk, asking for suggestions that add up to half of the design.
Guy behind him brought a toaster and wants to ask how to get it working again. Has zero troubleshooting skills.
This could easily be solved with the McDonald's model: Provide self-service kiosks where you can order what you want and pay and have a "pickup" register which also serves as the hub for online orders.
> Guy behind him brought a toaster and wants to ask how to get it working again. Has zero troubleshooting skills.
That one can be solved by integrating a "maker space" into the store, with either volunteers or paid staff. Even better: combine this concept with an entirely automated warehouse so that online, in-person and "maker space" orders can be served basically 24/7.
All electronic components, from tiny SMD resistors over huge electrolytic condensators to processors, are available on machine-feedable spools anyway for mass production... so it shouldn't be that hard to automate anyway with existing components!
(Please, someone, please implement this idea!)
1. You order online.
2. The parts go in a delivery truck.
3. The truck drives for a few hours.
4. The parts get loaded into a vending machine.
5. You go there to get the parts.
This makes it possible to supply a small city with parts that are always available within 4 to 6 hours. You only need to drive a mile or two.
Maybe it really isn't worth it to keep more product in-store or pay for better qualified sales reps, I don't know. But if it's not worth it, then yeah: I don't see why I should buy from a brick & mortar store except just to keep them in business for when I do need them.
Radio Shack used to have a similar markup: charging $.70 for a $.03 part.
https://www.banggood.com/0805-SMD-Resistor-And-Capacitor-Sam...
I was thinking the same thing.
Those categories are the perfect way for brick and mortar stores to differentiate themselves from online retailers. They're accessible enough that the average consumer may be interested in them, but complex enough that you'll probably need advice from someone knowledgeable before buying.
I'm really surprised Best Buy hasn't devoted much (if any) floor space to those things. I bet they could sell truckloads of things like micro FPV drones if they just demonstrated them for customers.
(I wouldn't order power supplies or flash memory from Chinese retailers, though.)
You're thinking of an entirely different market.
People who shop for something like a drone in Best Buy are never going to order one directly from China. First, they don't trust Chinese websites (and I've ordered from them all, so I completely understand why). Second, they probably don't know exactly what they want, so they need to talk to someone first. Third, even if they do know what they want, 99% of the stuff you see on sites like AliExpress is actually toy-grade junk, even when the price is $100+. Finding something that's actually worth your money is like finding a needle in a haystack.
I think there's a ton of potential in selling these types of hobby electronics to consumers, but it's only possible with salespeople who can demonstrate and explain the products. Fast shipping (or pickup) and easy returns/exchanges/repairs would just be icing on the cake.
Arrow is quite amazing if they have it. And for "real" hardware, McMaster-Carr can often deliver on the weekend within hours if you're willing to pay for it.
Mouser is one of my go-tos as well, but not for something I need same day.
I have used McMaster-Carr, but they don't have electronics components beyond a token selection (at least they didn't last time I looked).
I'm convinced that cell phones are the only thing that's kept most Radio Shack stores afloat since there's decent margin in cell phone accessories and plans.
They were. Source: A friend of mine worked for Radioshack between 2008 and 2012. He had no idea why his store was still in business.
The only thing he ever sold at any volume was cellphones.
Besides phones, there'd also be the occasional lunatic who would wander in, convinced that the end of the world was nigh, who wanted to buy a battery-powered off-the-grid television, while talking about his stockpile of guns, and how the country was heading towards civil war.
It was never entirely clear what kind of television broadcasts he was planning on watching after the fall of civilization.
The hobbiest electronics business seems even harder, it's hard to sell a 4 pack of resistors for $3.99 when you can buy a 300 pack on e-bay for the same price. But they couldn't afford to stock a useful variety of parts and sell them for much less than that, a decent size metro area can support a few electronic component houses that have enough volume to have good inventor, but not 27 neighborhood Radio Shack retailers. Though even then it's hard to compete when national online retailers like Digikey have a catalog of 8 million items and can ship most of them the next day -- whether you need 1 or 10,000 components.
Make Magazine found out that that the entire Maker movement is not really enough to sustain a business.
Circuit City is back in business.
https://www.dealerscope.com/article/in-time-for-black-friday...
Once the company re-established itself online, Shmoel said at the time, then they’d be able to consider a move back into the physical retail space in the form of Circuit City Express stores, and a potential store-within-a-store model
With the ongoing decline of brick-and-mortal retail in general, it seems unlikely that they'll ever have a significant physical presence.
I think my first phone plan had 100 minutes a month.
This was a typical cellphone circa 1996
https://steemitimages.com/DQmaMWsMbXEaUxf4oAHVp6q5Y8r7A4QgxF...
One wouldn't want to inadvertently age-box anything by implying any particular position on the toddler-geezer age axis. Kids of sufficient skill can think of themselves as "advanced", and adults of sufficient budget won't think they're blowing it all on "toys".
This is how you compete with Amazon.
https://www.forbes.com/sites/csylt/2014/09/10/magical-makeov...
Is this a common thing?
I have a hunch that most of the retail businesses will transition to online in next 10-20 years and all the current retail spaces, especially the malls, would be repurposed into entertainment+place to gather such as restaurants, games, private cinema booths, party places, making spaces, painting places etc. The brick-and-mortar places that stores goods for selling would be fairly odd concept in one or two generations.
Great points. As a parent of two small kids, though, I'd much prefer that the entertainment NOT be attached to a Toys-R-Us, as that would more or less obligate me to buy a toy every time I went (good luck getting out of a TRU with a little kid without buying something.)
The local mall already has a few paint/build/create spots for little kids, so I can see the transition you mention happening already.
Retail thinks that better service and experiences is enough but when it comes down to it, parents want to buy toys in a toy store and they want to buy them as cheaply as possible. Physical stores also keep ignoring that Amazon actually offers really good service with cheap (or free shipping) and fast shipping, and a great return policy.
https://www.nytimes.com/2017/09/18/business/best-buy-amazon....
the sample is too small to say for sure, but I suspect they commission custom runs of things like flash drives that would be too cheap to profit off of if they were actually exposed to matching Amazon prices.
https://consumerist.com/2007/02/best-buys-secret-employee-on...
https://www.nytimes.com/2018/03/15/business/toys-r-us-bankru...
also see: Pretty Woman
Then couple that with liquidating all the valuable assets with all the profits going to the private equity group.
Meanwhile, your private equity group is also your landlord, and they charge outrageous property rental prices.
Once all value to the property has been extracted and transferred to the private equity group, and the only thing left is liabilities, you then go bankrupt and try to flog off the liabilities to the highest bidder (who is stupid enough to pay money for something that has negative value).
That's the history of Bain Capital, Blackrock, and all the other Private Equity Groups.
Having demonstration models in the store is a normal retail thing to do for selling the product in question, and does not need to be relabeled as an experience. Real experience-sellers already have their exit through their gift shop.
The advantages [New] Toys 'R' Us will probably have to leverage over Amazon will have to include lower per-unit shipping costs (in both time and money), in-person inspection and demonstration, search/discovery of well-curated product lines, no-hassle replacements with low-hassle returns, and counterfeits/defects protection. And it's still going to need website sales and some way for kids (who may be COPPA-aged) to browse the catalog, engage, and build up a wish list.
But in all likelihood, they'll probably just try throwing more money at brand marketing, rather than actually being better toy retailers. I shall be preemptively disappointed until my dearth of faith is invalidated.
We are having a heck of a time trying to find stuff not made in China, primarily concerned with toxic plastic/rubber coatings and elevated amount of lead reported in some of these imports.
NYT just published an article about counterfeit books. Fake branded chargers have been an issue as well. Why not toxic toys from China?
Which is in a way, is also a subversive commentary on the value of brands. Billions spent on advertising in the 80s is worth nothing more than a downvote on HN today, despite endless claims of the immense value of sunk cost in marketing.
I'm a gosh darn industry murderin millennial and I remember it.
If they want to survive the come back, the pricing needs to be more price competitive with other convenient solutions.
If I were them, I'd rent dead spaces in malls for Nov, Dec and Jan (returns, liquidation). I'd also demand that Lego or Hasbro or whomever give them several exclusive toys for the season you can only get there. Make all the money in one quarter without maintaining expensive stores the rest of the year. Anything else is folly outside of 20 stores in the 20 biggest markets.
At the same time, the new owners must understand that the value of the name they purchased has been tarnished by the past owners.
What is the value in the brand? They don't manufacture anything - the product all comes from third parties and they're just a middleman dumping it on a shelf for you to come and pick up. They don't do anything else. Where's the value?
You've got to be joking - it's was just a big cold warehouse in a cheap out-of-town location stocking whatever. It wasn't Hamleys.
After doing it reasonably well for decades we're at the point where for millions of people, when they think to themselves "I need some toys, where should I look?", Toys R Us is one of the top answers that occurs to them. If you can follow though by delivering a decent shopping experience, that's going to lead to a lot of money.
Even if TRU has a bad association with the experience, no one is going to care where you got your Hot Wheels once you have them.
The only thing Toys R Us has ever been to my mind is "well the electronics department and toy department of [current store] doesn't have [thing], maybe Toys R Us does?" And that could be solved with a phone call, or now, the internet. Product discovery was from ads in parents' newspapers (I suppose some of them may have been Toys R Us ads and it's possible some of my Extreme Dinosaurs figures originated there before being wrapped by Santa) and rarely from wandering the aforementioned department aisles.
Another poster made a comment about the aisles dedicated to video games. You would pull out a paper slip and bring it to some off-to-the-side area where you would get your selection fulfilled by some back of the house magic. I can't remember if that was before or after checkout and I think they were all a bit different in how they did it but I seem to recall a long conveyer belt being involved. Later on, my local store cordoned off an area called "R Zone" which, on top of additional security, had everything out in the open as well as many kiosks and demo units.
To me, Toys R Us and games go hand in hand.
For what it’s worth, we went to Toys/Babies R Us all the time when our daughter was born six years ago. When you’re out of diapers or the bottle breaks or you need a last-minute birthday present for a friend’s party, you need supply in 30 minutes; even same-day isn’t fast enough. The stores filled that role for my family.
Amazon has struggled to launch their own line of diapers and baby products multiple times, they shuttered the Quidsi acquisition after they couldn’t make it work, etc. I don’t think it’s foregone that Toys R Us would’ve become another one of their victims.
Whatever you may think of iPad quality versus the competition, you can't argue with them deciding to keep premium pricing.
Their idea to open new stores in small footage locations focusing on high margin and popular products during Christmas time is great.
By "changing market", I mean:
- Retail is brutal business. Everyone focuses on Amazon, but on the ground, Target did a bigger number on them. Target got really good at capturing the kid product lifecycles, from baby to tween. Target does toy and gadget merchandising much better than Walmart. Amazon prices for baby stuff always suck as compared to Target.
- Tablets and smartphones also really killed the toy market in general -- kids aren't playing with toys as tablets capture attention.
- Toys suck. As toys consolidated into a couple of giants, the quality of everything is just garbage. I bought a board game recently where the board was so thin, it bent from humidity! There's actually a thriving resale market for 70s and 80s toys. My wife sold a Fisher-Price House and a GI Joe helicopter at a consignment sale for $75!
I'd expect TRU to have a decent, but not great holiday 2019, then pretty much fall apart after that.
- Low birth rates. The size of their target population is actually shrinking.
There was a slight dip between 2010 and 2015, but not enough to be cause smaller cohorts to be a problem nationally. We're talking about the difference of a few hundred thousand kids across a population of 70 million+. There was bigger dip in the 70s.
https://www.census.gov/data/tables/time-series/demo/income-p...
Take a look at Table HINC-04, which identifies income for families with children under 18:
showing median/mean income:
* white alone, not hispanic: 93K/120K
* asian: 101K/136K
* hispanic: 53K/72K
* black: 47K/66K
So stores like Toys-R-us can get hammered as a result of demographic shifts even if total population of kids is increasing.This is really easy to underestimate if you don't have kids. If have elementary-school age kids. They get plenty of toys at birthdays and Christmas and I'm always surprised how many of them literally sit on a bookshelf unopened. (We end up donating many of them after a while.)
They are basically interested in screen time or books and that's about it.
This is the case for just about any of the fiddlier board games and boardgame-adjacent things from back then. Often the story is some Chinese company bought the license and is churning out the same thing, but 10-20% smaller and all the plastic's 1/2 as thick at best. Rock 'Em Sock 'Em? Smaller, way thinner plastic. Hungry Hungry Hippos? Similar story. Loopin' Louie? Weaker motor. Over and over if you dig into board game nerd talk about these the advice is to find an original, because though you can buy a new one on Amazon it isn't really the same thing, and often barely works at all.
Conventional toys are much, much better. Are you kidding? The plastic manufacturing techniques available today put 70s toys to pale. Computer modeling also makes more complicated designs possible.
In the 70s, action figures were lucky to have a blocky head with eyebrows painted on in about the right place. Modern GI Joe figures have full naso-labial folds and neck musculature. It isn't even close.
In 1985, Optimus Prime was able to transform from a blocky truck to a truck rotated vertically with a robot head and arms that kinda swung out. You had to add the fists and you lost them almost immediately.
Modern Optimus figures transform from an aerodynamic semi-truck into a fully articulated robot samurai that looks better than the one drawn in the original cartoon.
Have you compared a modern plush to one from the 80s? Take a look at the stitching. You can get plushes for $10 now that would have cost $80 in 1985 and had less facial detail.
Toys are mostly better made now. We just don't care about them as much and they fade into the generic plastic darkness.
This article was written before the Toys 'R Us takeover and liqudation, but prior to that Bain Capital had done the exact same thing to KB Toys.
https://www.rollingstone.com/politics/politics-news/greed-an...
Not sure why Amazon didn’t buy out some of the locations.
Edit: apparently I could have pointed drones/printers.