LifestyleRuth Noble

Toys ‘R’ Us: the fall of a giant

The recent announcement that Toys R Us is closing all 100 stores in the UK comes as no shock after previous profit warnings, and the brand joins a growing list of retailers that have failed to thrive of late. Post-mortems often point the finger at economic factors as well as the march of ecommerce, and while both of these are certainly shaping the landscape and changing the rules around how consumers engage with retailers, other brands are managing to forge a more positive route forwards.


So what went wrong for Toys R Us and how can other retailers ensure they succeed?

Toys ‘R’ Us: the fall of a giant

With huge megastores occupying out-of-town retail parks, Toys R Us encapsulated the by-gone trend of abundance over experience, with soulless aisles stacked high with brightly coloured plastic designed to unleash children's Pester Power. However, ecommerce has changed the rules of physical shopping: when online can neatly offer variety and range, physical stores now need to stand for something above and beyond that. Experience is King. Today's consumer, overwhelmed by choice, is looking for a more curated, interactive experience and Toys R Us were unable to respond.

Furthermore, Toys R Us out-of-town location does not fit well with the upward trend for Retailtainment: nothing screams 'fun day out' like hauling your kids across a giant car park ring-fenced by a collection of mismatched warehouse stores and the promise of a burger van if you're lucky. Lunch anyone?

However, there are notable exceptions: IKEA, also occupying an out-of-town space has struck a different chord. With a strong family focus, the stores offer everything from a crèche, to café offering free baby food, changing and feeding facilities and toddler level entertainment. The experiential store layout caters for the curious child as well as igniting a world of possibilities for the paying adult and if that's not enough, the end of your journey is rewarded by ice-cream and scandi-food delights to send you on your merry way.

To safeguard for the future, retailers need to ensure they make it worthwhile for consumers to visit physical stores, with a strong focus on experiential to support a multi-channel approach

Like many large organisations, Toys R Us have been hit by a decline in consumer trust and confidence and have struggled to maintain relevance, while smaller seemingly more nimble players close in. A growing shift in consumer values away from abundance and towards more mindful, ethical shopping does not fit well with the cut-price plastic-empire and consumers are turning to alternatives that offer a greater sense of authenticity.

Many big players have turned to brand partnerships as a way of leveraging authenticity while still maintaining their presence: mainstream fashion retailers frequently run limited edition collaborations, often only available in-store. Others, such as Waterstones have attempted something bolder: the Trojan horse approach of rebranding as an independent, to mixed consumer reaction.

With consumers increasingly looking for an authentic experience, established brands need to ensure they can credibly meet this need

The consumer of today is savvy. Where once Brand ruled supreme, today value-centric purchasing behaviour means that products can often hold more power. Without the lure of superior experience or other tangible RTBs such as the chance to combine a trip to Toys R Us with other leisure activities, the brand has been devalued and once unique facets such as superior choice now hold little currency vs. online alternatives.

Brands need to be aware of the changing consumer dynamics and be able to clearly define their purpose

At 2CV we work with a diverse client portfolio in the retail space, from helping big brands to redefine their values and retain their relevance to ensuring customer needs are central to the in-store experience. 

If you would like to talk further to 2CV about our retail experience and how this could help you, please contact or