Customer Impact and Response to Toys “R” Us Stores Closing

The toy industry is in a tizzy with the liquidation of all Toys “R” Us (TRU) and Babies “R” Us operations in the United States. Over the years, retailers like Amazon and Walmart have taken more than their fair share of the toy market but there is still a place in retail for dedicated toy stores.

According to the Toy Industry Association, 61% of consumers shopped at specialty toy stores within a 12-month span. Toys “R” Us made up 76% of that specialty toy store shopping. Specialty toy stores are defined as retailers focused primarily on selling toys, not to be confused with independent toy stores which are a subset of specialty stores that are privately owned. For small and medium businesses, such as independent toy stores, there’s a huge opportunity with Toys “R” Us going away to gain more foot traffic from consumers who like to be immersed in toys.

Regional Response to the Closing of Toys “R” Us

In light of the TRU news, DIRT wanted to understand how shoppers with few brick-and-mortar specialty toy store options felt about the situation, so we conducted a survey targeting a small metro area. Here are some statements from our respondents when asked, How do you feel about Toys ‘R’ Us going out of business?

“I don’t know where I will buy toys now. Target and Walmart are the only options and most of the selection consists of one time “junk” toys. Pottery barn kids is too over priced. So, I’ll likely have to research and buy online without being able to see it first.”

“Fine, it was overpriced and impersonal.”

“Sad because toys are great but also not interested in crazy corporate conglomerates.”

“It’s sad because it is the end of an era, but most, it not all, of these toys can be found elsewhere or online. If they would have lowered prices a couple dollars per toy, they may have been able to stay in business.”

Word Cloud from Responses

There are a few key topics in the word cloud that some small businesses may or may not be able to compete with such as competitive pricing. The general sentiment is indifference though. An area they can take advantage of is the personable feel and care.

Some DIRT: The “Telephone” Effect

I was talking with a respondent about a toy store that their friend used to visit, it’s pricey, but they like to support local shops. During Christmas, the friend couldn’t choose between two moderately sized, highly priced play pianos. It was a few hours before closing when she asked the shop owner if she could buy both of the models to bring home, show her husband, and then return the one they didn’t want first thing in the morning.

This seems like something you wouldn’t even ask when you’re giving your money to a store but she was the only one in there and wanted to share her situation in hopes she’d get some help. The shop owner would not allow it. “What if” the product they didn’t want would sell within the two hours before closing that day. Now, you can argue both sides of this equation, but I’m pretty sure a product like that isn’t flying off of the shelves. So, the friend left the store without buying anything, never returned, and tells her story any chance that she gets. She likes to also add in there that her husband would’ve chosen the $270 one. The fact that I heard this “through the grapevine” shows how the telephone effect takes place when a customer gets rubbed the wrong way.

These are the sort of interactions that feel like they would come from a large corporation due to policies and not from a small business owner trying to build a reputation with the community. So, when thinking about how to compete with these extra large businesses, be polite, considerate, and if you find yourself in the shoes of that shop owner, share your knowledge to help them through.

Will Consumers Visit More Independent Toy Stores Now that TRU is Closing?

The verdict is still out, but the research says yes. I think this puts a lot of pressure on local toy stores.

Does Toys ‘R’ Us going out of business make you more interested in shopping at an independent toy store?

  • Yes
  • No

From our research, the main factor that drives customers to an independent toy store over other shopping options is if that store sells products of their own that are not available anywhere else.

This falls in line with what the top toy stores of today look like. The LEGO Store, Build-A-Bear Workshop, and The Disney Store are just three examples of toy stores who remain popular and profitable. Though each store is different from the next and much of their products can be bought online, they provide an experience that allows consumers to explore the store for a unique toy that they have never seen before.

It’s a very interesting time to be an independent toy store. The idea of “innovate or die” is all too real. The pressure is there to compete with the bigwigs more than ever before. If the rest of the U.S. consumer trends similar to the metro area we polled, small businesses have a few things to consider:

  • Focus on promoting your brand and awareness within your area to capture some of those regular TRU shoppers
  • Provide a personable experience that’s better than any big box retailer out there
  • Offer unique products that give consumers a reason to visit your store

These may seem basic, but when looked at through the lens of the toy industry, they’re more important than ever.

Want to talk more about what’s going on in the world of toys?

how can we help you?

Contact us at the Consulting WP office nearest to you or submit a business inquiry online.

see our gallery