Toy Nostalgia: Where Toys “R” Us Lost Its Way

By Matthew Stoffel on 09/27/17
Updated on 04/09/21

You’d look both ways as you crossed the parking lot, of course, but once those glass doors parted to let you in, all bets were off.

I can remember tearing through the maze of aisles with my brother to take in all that was around us or to hunt down that newest toy we had seen on TV.

Usually, we’d discover something wonderful, fun, and altogether unexpected.

We grew up in rural Minnesota, where distance is measured in time on I-90, and no stores bigger than our Hy-Vee, Shopko, or Kmart were within an hour of us. Even those were a 20-minute drive.

Because of that distance, exploring the bounty of Toys “R” Us was a rare treat.

Toys “R” Us Forced into Bankruptcy

Hearing that headline this week, I didn’t feel surprise. The information was registered with a ready nod.

“Well, sure,” I thought. “Of course.”

That’s not even because of the favorite reason local media outlets have all grabbed onto: that kids are so heavily into their screens, they don’t want physical toys anymore.

I’m not going to argue with that theory, but chalking up the chapter 11 reorganization of Toys “R” Us to the idea that the toy industry is dying is dismissive.

For one thing, have you been to a Toys “R” Us in the last few years? The stores are dirty and disorganized. It’s almost impressive that they’ve managed to coordinate an untidy milieu across so many locations.

Product quality also seems to have dropped since I was a kid, which makes sense as more toy producers try to turn a profit in a world where kids “only want to stare at screens.”

The problem for Toys “R” Us wasn’t just screens, though. The stores have long been well stocked with video games and movies, and the company has understood electronics for decades. When I was in college a few years ago, I knew it was the best place to shop for batteries.

The problem for Toys “R” Us was neglecting to transform how they did business while the toy industry — and the toy customer — evolved.

Conquering & Relinquishing the “Fun” Industry

For so long, the advantage of Toys “R” Us over your local toy store was the vast selection. It had everything.

While more general stores would stock a modest selection of plastic wonders, Toys “R” Us was teeming with every niche novelty that Hasbro and Mattel put out. Even when Walmart and Target bolstered their toy selections, Toys “R” Us was the place.

If Toys “R” Us didn’t have what you were looking for, nobody would.

After pushing so many smaller shops out of the market, Toys “R” Us also knew its products the best. If you were looking for a Transformer, sure, a Walmart employee might know roughly where those were hanging. A Toys “R” Us employee would be more likely to ask if you were looking for Starscream or Ironhide.

So what changed? Toys “R” Us got comfortable, it seems.

As kids became increasingly interested in games on tablets and consoles, Toys “R” Us gave up ground on knowing its products. It didn’t keep up with the online capability and convenience of Walmart, Target, and Amazon.

But most importantly? Toys “R” Us stopped paying attention to the excitement of kids running through the doors.

The problem wasn’t that kids are more interested in digital stimulation than board games and Hot Wheels. The problem was that Toys “R” Us didn’t go with them.

If dinosaurs, Barbies, and lightsabers are no longer what get kids grinning, Toys “R” Us needed to transform into whatever does.

Meeting Today’s Customers Where They Are

Charles Lazarus, who founded Toys “R” Us and kept it growing for several decades, specialized in appealing to children. His toy stores offered an experience akin to visiting Willy Wonka.

The franchise lost hold of that magic when it sacrificed the wonder of discovery.

It’s great to have the nearest location for whatever you’re selling, and having the best selection is important, too. If you also manage to know the most — fantastic.

But when you lose sight of who your customers are and what they want, it’s game over.

Don’t let that happen to you. As your industry and your customer change, change with them. You need to be constantly communicating, observing, and questioning whether “the way we’ve always done it” is the way you should really keep doing it.

Look at what this bankruptcy for Toys “R” Us really means.

The CEO says the company will use its flexibility with creditors to transform the in-store experience. He wants to build “interactive spaces” for birthdays and toy demos. He wants to develop “augmented reality” elements for kids to explore.

Toys “R” Us wants to put the wonder back in the store — and give kids the excitement of discovery again.