Was—I was a Toys ‘R’ Us Kid. Because Toys ‘R’ Us kids did in fact grow up but apparently not enough of them grew up to be Toys ‘R’ Us adults. Now Toys ‘R’ Us is doneso.
I had another blog post started about customer privacy and personalized consumer experiences but the recent news of Toys ‘R’ Us going bye-bye was too good to pass up. And by good I mean bad. I’ve been chomping at the bit to see what they would do since they filed for chapter 11 bankruptcy protection in September. Now grab some tissues as we gather together and mourn the loss of the giraffe and catchy “I don’t want to grow up, I’m a Toys ‘R’ Us Kid” jingle that haunted my parents’ dreams in the 90s.
So *sniffle* what happened to this toy giant of 70 years? Well first off, I can’t help but take on a little blame. I’m like the 70—and continuously growing—percent of people who make a purchase decision based off of customer experience versus price. That noted, it’s probably appropriate to state that I am an avid Amazon Prime shopper, and by avid I mean I have a problem. It’s just so easy, convenient, lovely, and addicting. The Amazon brand is more significant than ever and the customer experience is unbeatable. Feel free to challenge me on this; I want to hear about any business that is easier to spend your money with than Amazon. Don’t get me wrong, my heart still beats for my hometown hero Tar-zhay (Target for you non-freaks), but it isn’t the same kind of love.
Back to Toys ‘R’ Us. CNN Money1 would tell me to take my Midwest-guilt blame back because Amazon didn’t kill Geoffrey the Giraffe. They do state a valid claim that what really sunk the ship was the inexorable amount of debt that darn cute giraffe was in. They reported that in 2005 Toys ‘R’ Us’ debt downgraded the company to junk bond status at a time when Amazon’s sales were just 4% of their current revenue. And then we all know what happened after that: they were taken private, secured $5.3 billion of debt with assets, and slowly crawled to their death.
I can’t help but think that there was a lot of upper management that completely dismissed planning for a future generation of cha-ching spenders. They knew we were coming! They knew we were getting to an age where the 90s kids would have kids of their own… and we’d buy those tiny ones tons of stuff! [You know, once we moved out of our parent’s basement.] In 2000, first-time moms were ~25 years old when they had their first youngster. That first-time mom was just north of 26 in 2014. Regardless of the shift in childrearing age trends, they knew that the first millennials would start having kids somewhere around 2008ish, and to meet the demand of that generation they needed to continue to connect with these buyers and they needed to be ready to earn their business.
80 million Toys ‘R’ Us Kids decided to buy toys elsewhere! I have no actual data to back this figure up other than I estimated that if half of the 65 million Gen Xers and 60% of the 80 million millennials were Toys ‘R’ Us Kids, then we have a population of over 80 million adults. I can feel myself falling down the rabbit hole so I’ll wrap things up pretty quickly here. Disrupt or be disrupted. Cisco released a great post last year about the current state of digital transformation in retail, and how many retailers are stuck in the early phase of the digital roadmap. Perhaps this is what keeled Geoffrey. Whether it was their failed digital strategy or their inability to unbury themselves from their debt, I’ll miss Toys ‘R’ Us, and may we never have to feel this pain with Target or Amazon.
If you need me, I’ll be at a Toys ‘R’ Us for the first time in more than five years, where I’ll be buying a year’s worth of birthday and Christmas gifts at 80% off for my nieces and nephews.
Everyone loves a good sale.
Cheers,
Becky
Shout out to @BillMurphyJr who published his Inc. article about Amazon ‘Follow the Money’ and Other Lessons From Jeff Bezos in 2013. That article got me obsessed with following Inc. who is one of the thought-leaders/publishers that fueled the business passion that got me in/through B-School. His Say Goodbye to Toys R Us Forever (It Takes Literally 2 Minutes) article is—needless to say—fantastic.
1 Isidor, Chris. Amazon didn’t kill Toys ‘R’ Us. Here’s what did. CNN Money, 15 March 2018.
Tin Cans & String 