Being Engaging and Attractive: The Tinder World of Toys
The Playing Field is UNBALANCED
In a final plea, Toys ‘R’ US, the proclaimed creator of the toy industry sent a final shot at exonerating itself from the shame that comes with bankruptcy. The former toy superstore pushed blame on its main competitors: Walmart, Target, and Amazon for discounting prices when Toys ‘R’ Us was at its weakest, forcing liquidation and running them out of every store they owned.
If blaming their competitors is all Toys ‘R’ Us had left, then so be it. Toys ‘R’ Us’ final attempt to save their name did not mask their self-inflicted wounds.
Toys ‘R’ Us had an overabundance of problems but the most noteworthy are threefold.
INNOVATIVE TECHNOLOGY
From a non-analytical standpoint, it would be easy to blame Amazon for the downfall of Toys ‘R’ Us but there is more to the story. Back in 2000, Toys ‘R’ Us signed a $50 million plus deal with Amazon to be the sole distributer of toys and baby accessories on Amazon. This meant Toys ‘R’ Us’ website was essentially a gateway to Amazon. However, when Amazon began to take on other clients, the Toys ‘R’ Us website just became a branding playground for all of their competitors. This opened a world where any toy on the Amazon could easily be compared by customers and examine prices, names, and customer satisfaction.
But can you blame Amazon? The resulting lawsuit from Amazon taking on more clients in the baby products category was a $51 million settlement, coming in 2004, clearly a net gain for Amazon and huge loss for the toy store giant at the time.
Toys ‘R’ Us decided to sit back and let Amazon, a company taking off, handle a major aspect of their sales. However, as Amazon grew, Toys ‘R’ Us did not. When Amazon got bigger, the internet sales kingpin saw benefits which excluded the toy store giant and left Toys ‘R’ Us in the dust. Toys ‘R’ Us became a pawn in the greater scheme since they embodied a lack of management and the ability to prepare for the future. The world changed without Toys ‘R’ Us and by the time they adjusted, Amazon and other competitors swiftly moved ahead.
WHAT ATTRACTS A YOUNG AUDIENCE
Circa 2001, the most popular toy amongst kids was the “Bratz Doll”. A shelf stuffer for Toys ‘R’ Us. The dolls came in an array, with different hair styles, outfits, and accessories. Fast forward to 2010, the hottest toy on the market evolved into the iPad. By this point, Toys ‘R’ Us was on the chopping block. Children were past physical dolls and tended towards a virtual playing experience. Now kids were able to create their own characters, environments, and availability to dispose of hundreds of characters. Today, the average age for a kid to own a “smart” device is just over 10 years old. Toys ‘R’ Us watched their customers change and was not prepared to do the same.
Toys ‘R’ Us witnessed their industry shrink at alarming rate for the better half of this decade. When they finally decided to hire advisors to get them out of the rut, it was too late. Debt accumulation led to deterred investors and reduced shipments from companies that feared they would not get their returns. A rational concern.
Brand image and loyalty to one’s trade is essential for all business owners. Pride is a blessing and a curse, but ignorance is a fast track to bankruptcy. You have to decide what is more important; the end of your business or being humble enough to admit that you must change. It is important to evolve to what the customer wants and what your competitors are up to. Basking in the past when one is on top is a harder fall than a climb up.
BEING A DREAMER
What is a toy to a kid? It is a way to take an object come to life. A toy car becomes Lightning Mcqueen, a doll becomes a best friend, building blocks become a prestigious castle. Just look at “Build a Bear”, they cater to the dreams of children by providing an opportunity to create a teddy bear and bring it to life. From the stuffing to the clothing, the child’s imagination becomes a tool.
It can be argued that Toys ‘R’ Us lost the “dreamer” vision and made their products only important for their value. However, in a consumer arena of children under the guidance of their parents, style and vision were the way to value. It was more about creating the experience to promote the sale, than trust that the sale would sell itself.
Everyone’s dream is to create a business that they love. There are dangers associated with passion in business, as passion used in the wrong way can lead to a neglect to change, and then neglect leads to losing what you have built.
Business owners: you should be proud of what you build, and passionate about its creation, but do not allow your attachment to lead to your downfall.
