Are you prepared to reap the benefits provided by the demise of Toys”R”Us (TRU)? It still held 13.6 percent of the toy market in 2016, and the spoils will go to those who move quickly enough to capture the consumer.
Enough of the sad tales of childhood lost, I am not going to go there at all. This is a company that was saddled with too much debt (>$5 B), moved too slowly to change, and squandered tremendous brand recognition in the process. Physical toy retailing is not dead, and Amazon did not kill TRU. Amazon and Walmart will be the largest beneficiaries from its demise but there will be business left on the table, and how much each of these giants gain is very dependent on quick and decisive action.
What TRU provided was an incredibly deep and immersive toy experience unlike any other retailer. Where else could a child have such a magical experience that costs parent’s and grandparent’s so much? Impulse buying was likely a major player in its sales. That of course comes with tremendous expense, through physical infrastructure and inventory to fill it. Using new digital technologies there is an opportunity to create a physical environment that mimics and even expands this experience with a fraction of the space or inventory carrying costs, yet still allows for the physical interaction and immediate gratification that comes from a visit to the toy store.
Time for those “delightfully disruptive” use cases to kick into action!
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