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Five reasons Toys R Us failed

«It’s a magical place. We’re on our way there.»

The old Toys R Us jingle has worn thin. Now it’s on its way out.

The retailer’s UK arm has gone into administration, putting thousands of jobs at risk.

It isn’t that we have stopped indulging our children’s demands. Argos and The Entertainer are still successfully separating children from their pocket money. Disney and Lego are still going strong.

So what went wrong at Toys R Us?

Toys R Us UK goes into administration

1. Out-of-town

In 1950s America, when retail was taking off as a leisure activity and baby-boomers were in pushchairs and short trousers, the time was right for a huge, Aladdin’s cave of toys, that could overwhelm children with a wealth of choice.

In the 1990s, the model still worked for UK shoppers keen to pick up the latest Furby, Power Ranger or Tamagotchi.

At the time, cheaper out-of-town real estate with purpose-built free parking, plus places to eat, offered an easy weekend day out.

«It was ceiling-to-floor toys. It was a destination,» says retail analyst Kate Hardcastle from Insight With Passion.

2. New kids on the block

«Kids are changing,» says Kate Hardcastle.

«An eight-year-old now, they can download an app in 30 seconds to distort their face and make them look like Spiderman. Retail almost can’t keep up.»

Birthday presents are now tech-related, such as virtual reality headsets, drones or go-pro cameras, she says.

«That wasn’t something Toys R Us was able to get into very successfully,» she says.

«They did it in a generic way… it was just another aisle.»

And like the rest of us, children are seeking experiences rather than possessions. So a trip to a toy store is competing with trampolining parks, laser tag and go-karting.

But the digital ecosystem can be an opportunity as well as a challenge, says another retail analyst, Steve Dresser.

«For my four-year-old, YouTube is the first port of call. And there’s a lot going on around there.»

It isn’t hard, he says, for retailers to spot fashions — like the current trend for making slime — and capitalise on that, he suggests. The Irish chain Smyths has done so.

But Toys R Us failed there too.

 

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