Toys are fun, but toy shopping is even better — how experiential retail is changing the toy industry post Toys R Us

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Latitude

8 min readSep 11, 2019

When Toys R Us collapsed, it left more than just a gaping hole in the 25 billion dollar toy industry. It left retailers of all sizes wondering what went wrong for such a recognizable and large company to fail. Clearly, something went awry.

For all the ambiguity, however, one thing remained certain — customers of today were not responding to the retail model of yesterday. Ecommerce, namely Amazon, had seen to that.

With Toys R Us out, Amazon absorbed much of the market share previously controlled by the former giant. But, despite its size, Amazon couldn’t snatch up all the unclaimed business on its own. Currently, a new wave of brick-and-mortar retailers intends to capitalize on the opportunity without falling into the same traps that snared Toys R Us.

Here’s what they’re up to.

Target & Disney’s Secret Handshake

As two iconic brands well versed in both retail and creating unique customer experiences, Disney and Target have a lot in common. Those commonalities also include a similar group of customers or what Bob Chapek, chairman of Disney Parks, Experiences, and Products, calculated as a 90% overlap in customers. With trends in retail constantly shifting, Disney and Target decided to better cater to their shared customers by creating a unique retail experience — a Disney-branded, Target-operated store-within-a-store.

Averaging 750 square feet, the Disney shops will roll out in 65 different Target locations by 2020 and include 450 items — 100 of which were previously exclusive to Disney retail locations. The spaces also include lounging areas where families can hang out and watch clips from Disney movies and parks, spaces for photo opportunities, music, and interactive displays. The store features items ranging from $2 to $200 with most items hovering in the neighborhood below $20.

For their own part, each company brings something unique to the partnership. Disney brings its storytelling and entertainment experience while Target brings its existing omnichannel retail experience. Both companies built part of their reputations on creating above-average customer experiences, but as consumer demands shifted, Disney found itself less able to adapt its 300 retail locations to the changing times.

Even then, the partnership with Target remains far from a survival mechanism. It’s an incredible opportunity unique only to the two companies. Through its developed infrastructure, Target offers Disney easy access to its existing customers. In turn, Disney offers Target the opportunity to capitalize on sales from the incredibly well known and popular brands under the Disney Umbrella, including Marvel, Star Wars, and Pixar Studios (Think Toy Story). Together, the two companies deliver not just more products in more places. They deliver a unique experience for customers. And that, in the end, is what sells.

Camp — a toy store that’s all about adventure

Toys are inherently fun, but why not make shopping for them part of the fun as well? That’s the philosophy behind Camp — a toy store that recently opened up in New York City’s Flatiron District and that will soon open a second location in Dallas, Texas.

Unlike traditional toy retailers, Camp displays its toys throughout an entirely interactable store environment. According to The Dallas Morning News, rather than being neatly ordered on shelves, toys might appear on display in, for instance, a canoe sitting in the midst of a camp-themed playground within the store. The store, which includes an “old fashioned soda fountain cafe” also hosts workshops and features a dance hall and a theater. Paying members enjoy extended hours and the average family of customers in New York spends about an hour to an hour and a half at a time in the store.

Does that seem like a long amount of time to spend at a toy store? It might and it might not. But, how about this — how many parents drop their kids off to play at a toy store while they go out on date night (also possible within the same shopping center)? For families shopping at Camp, it’s not just about the toys. The novelty of the store comes from the experience of play it invokes even before the toys come home.

It’s toy shopping like no other, unless, perhaps, you’re comparing it to Rockets of Awesome.

Rockets of Awesome creates room for kids to be kids

Like its fellow New York counterpart, Camp, Rockets of Awesome relies heavily on creating a unique shopping experience just as much as it relies on the goods it actually sells. Rockets of Awesome emphasizes discovery and spontaneity. Half playground and half clothing store, the shop redefines what the retail experience means for customers. When they’re done jumping around in the marshmallow pit or swinging on the rainbow swings, kids can enter the customization bar and try on different combinations of bomber jackets and backpacks in the fitting rooms where they’re more than welcome to sticker the walls while they’re at it.

According to the store’s founder and CEO, Rachel Blumenthal, “We wanted to create a place where we don’t have to say ‘no.’ We don’t have to say ‘don’t jump off of that’ or ‘don’t touch that.’” According to Blumenthal, “We wanted to create an environment of being your best self and being confident, and really just having fun in this environment.” For many parents, that open philosophy probably takes some of the stress out of shopping too. At Rockets of Awesome, kids can just be kids. In fact, they’re encouraged to do so.

And, just when you thought you’d seen the last of them…

They’re back on the scene — Toys R Us. And, this time, things are going to be different. In a move that seems to account for their own past mistakes, Toys R Us, in partnership with retail service provider, B8ta, recently announced its plans to relaunch two new stores that focus entirely on experience creation.

For Toys R Us, that means 10,000 square foot stores that include different brand stations, play areas (a giant treehouse, in this case), places for playing video games, and another area for in-store toy testing. It also means integrating brick-and-mortar with the online shopping experience by allowing customers the option for digital checkout and the option to purchase goods online.

Even with their new emphasis on experience, will Toys R Us have what it takes to make the most of their shot at redemption? That remains to be seen. The questions this retail phoenix faces are those faced by the rest of the industry as well — will in-store experience alone be enough to reach customers in the new day and age? Again, we’ll have to wait and see.

Despite the ambiguity, one thing remains certain — when it comes to toys and having fun, kids know what they want. And, for that reason, they might just be our best teachers yet.

In the toy industry, kids have the most to teach us

After all, kids know how to have fun. They invent it wherever they go. They seek it out and find it in the most unexpected places. If kids constantly seek out play, exploration, and the chance to let loose, why not bring those same experiences into retail? Why not infuse the store experience with wonderment, joy, and surprise if that’s what kids love and gravitate towards anyways? Today’s retail doesn’t just give people access to things. It gives customers access to emotion and experience — something we really can’t put a price tag on in the end.

The Takeaway

With retail evolving rapidly, especially in the midst of disruption and the collapse of the old order, what can retailers do to not only survive but thrive? Consider the following:

Give your customers as many ways as you can to interact with your products. Think like a kid — make it fun!
Utilize retail’s inherent strengths but provide a way for shoppers to interact with the store in the digital space as well. Have an online shopping experience that compliments the in-store experience.
Seek partnerships when and where you can. Leverage the power and reach of brands with similar customer bases. Look for opportunities to team up.
Change things up. Give your customers reasons to come back by offering in-store perks and by changing what the store has to offer, including what it offers in terms of in-store experiences.
Give customers opportunities to customize and create their own experiences. Allow for them to customize the products they buy in-store as well. Encourage them to make an experience and a product their own.

Want to learn more? Feel free to reach out at any time. We would love to chat!

The above piece was written by the Latitude Supercharge Research Team, which includes Connor Beck and Carter Jensen

Supporting Resources

Resources and original reporting of the above points covered by the following publications — PSFK, Observer, RIS News, Chain Store Age.com, Inc., Statista, & The Dallas Morning News

At Latitude, we love taking incredible brands of all sizes and elevating them through tech-fueled experiences that add true value. From pop-up retail to permanent build-outs, our team brings brand stories and modern-day commerce together to truly stand out. Want to learn more? See our case studies. Give us a shout.

Additional Resources

Want to learn more? Our 2019 retail report is now available and includes a long list of case studies and insights from Shopify, Dollar Shave Club, and much more.

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