Ready, set, shop — crowds arrive early
Toys R Us seeks to reclaim season as it restructures
“There’s a meaningful opportunity to take a toy store and bring it to life.” Toys R Us CEO Dave Brandon, on the stores’ interactive offerings
Long before the days of Amazon and iPhones, the toy store ruled holiday shopping. And Toys R Us was perhaps the greatest American toy merchant of them all: truly a place, as its inescapable slogan promised, where a kid could be a kid.
Nowadays, CEO Dave Brandon takes a more pragmatic approach toward the crucial four weeks between Black Friday and Christmas.
“We’re glad we’re in the baby business,” Brandon said in an interview two months after Toys R Us filed for bankruptcy protection. Consistent sales of everyday baby supplies such as food, diapers and bedding, he said, help the chain survive the bruising price wars that now mark this time of year.
In many ways, Toys R Us represents the struggles of once-dominant brick-andmortar chains against online retailers such as Amazon, whose emphasis on convenience and low prices have lured shoppers away from physical stores. This especially occurs around the holiday shopping season, which can account for one-third of annual sales.
But Brandon is trying to keep people coming to brickand-mortar stores in the digital era. When it comes to a fun, hands-on category like toys, the store should be the primary center of discovery, he said.
At its store in Concord, the company recently opened a Play Lab section, which offers kids a more interactive experience with toys thanks to digital technology. For example, Toys R Us introduced an augmented reality app that allows kids to race monster trucks, see safari animals and play basketball — all virtually.
“There’s a meaningful opportunity to take a toy store and bring it to life,” Brandon said. “That’s a lot easier than office supplies.”
About 35 people, a couple with Thanksgiving gravy stains on them, were in line at 5 p.m. at Toys R Us in Concord when store manager Charley Almassey started handing out reservation slips for the hottest of the hot toys (Xbox, LOL Surprise dolls) to prevent pushing and shoving and bloodshed.
“Welcome to the new Toys R Us,” he told the folks in line. “We have no Fingerlings tonight. Come back Sunday. We’ll have plenty on Sunday.”
Fingerlings are tiny puppets you wear on the end of your fingers. Sophie Hill, 6, was waiting with her parents, Ed and Nicole Hill of Pittsburg, to get a monkey one.
“Awww,” she said, when she learned she would not be going home with a monkey Fingerling.
Ed and Nicole said they started cooking their Thanksgiving turkey at 7 a.m., ate it at 1 p.m. and did the dishes by 3 p.m. so they’d be free to jump-start Black Friday at 5 p.m.
“We worked it all out,” Ed said.
Despite all the electronic sales gizmos, interactive games and tryout stations inside the new store, it still came down to mommies and daddies pushing blue carts down the aisles.
Steve and Doris Blankenship of Concord came to load up on stuff for what they said were their “5½ grandchildren” (one is on the way). Doris said she will finish cleaning up the Thanksgiving dishes still at home once she has purchased a rainbow mermaid Barbie, which has fins instead of legs, for $21.99.
E-commerce is no doubt a top concern for privately held Toys R Us. From 2012 to 2016, sales from its physical stores fell nearly 20 percent to $10 billion, according to eMarketer. Digital sales have grown, but not nearly enough to keep pace with the decline of the stores.
Almassey, the Concord store manager, said all the new sales gizmos inside his store are necessary “if we want people to come back to brick-and-mortar stores.”
“Our motto used to be, ‘Stack ’em high, and watch ’em fly,’ ” he said. “Not anymore.”
The future of physical toy retailers looks grim. IBISWorld estimates that online sales will account for 14 percent of all toys sold by 2021, compared with just under 4 percent in 2007.
In September, Toys R Us filed for bankruptcy, hoping to restructure more than $5 billion in debt. The company was paying $400 million in interest each month. Brandon said he hopes that the bankruptcy will give the company time to right itself before it raises capital from an initial public offering.
He also hopes digital investments will boost e-commerce sales to 20 percent of total revenue by 2020.
However, that means 80 percent of annual sales will still come from the 1,600 Toys R Us and Babies R Us stores around the world. To attract customers, the company will need to focus more on developing its own toy brands and strike exclusive deals with major toy manufacturers like Hasbro and Mattel, he said.
Toys R Us has been partially hamstrung by problems outside its control, said Burt Flickinger, managing director of the Strategic Resource Group consulting firm in New York. The retailer is heavily dependent on Hollywood studios to create blockbuster movies that will create excitement and boost sales of related toys, he said.
Aside from the “Star Wars” and “Lego” movie franchises, there have been quite a few duds, Flickinger said.
Brittain Ladd, a retail consultant and former strategy official with Amazon, says Toys R Us should seize more control of its destiny by extending beyond toys and into media — to be more like Disney, which produces both.
“The Toys R Us brand is dated,” Ladd said. “The company needs to generate excitement. Why can’t Toys R Us come out with its own television show or movie? They need to change ... from ‘We sell toys’ to ‘We sell entertainment.’ ”
No matter what Toys R Us chooses to do, its fate will hinge on its stores. Here’s the good news for the company: Despite the unmistakable growth of online shopping, people are still waiting in line outside its stores come Thanksgiving evening and Black Friday morning.
Andrew Jackson of Redding came to Concord to buy himself a Lego “Star Wars” spaceship set because it was 30 percent off. He said he could not believe he was actually doing it.
“Today it’s Thanksgiving, and I’m thankful I’m not getting trampled to death,” he said.