If you haven't heard by now, Toys R Us (TRU) Australia have entered in to voluntary administration. The news comes months after the US and UK divisions announced liquidation.
The retail landscape has been forced to change in the wake of online disruption, and TRU was too late to the party.
The business didn't have an online presence until 2009, which globally, is very late. Despite online shopping beating brick-and-mortars on price and convenience, TRU remained a cluttered, full-of-inventory-and-not-much-else store.
Thrown in to the mix is big department stores – like Kmart, as well as supermarkets, diversifying their range to include more toys and games, something TRU could not compete against.
So Toy & Hobby Retailer turned to the experts to find out what the future of toy retail looks like and what retailers can do to ensure they don't go down the gurgler.
What Kim Do, IBISWorld Senior Industry Analyst emphasised, is that retailers have to focus more on experiences rather than goods.
“Retailing is shifting in to being more about an experience in a store that builds brand value and loyalty. Retailers should use their physical presence to compliment their online store,” she said.
A relationship with a customer and building stories around a brand will prove to be key in toy retailing.
“Interacting with consumers on social media and creating relationships with them offers them more than just goods,” she said.
Smaller operators can capitalise on the TRU news, differentiating themselves and their brand from not only traditional retail styles, but their competitors, through experiences and social media.
Retailers have to create a space that lures in parents and kids. Having a fun experience in a store is what will get consumers away from the convenience of online shopping and puts up fierce competition to other brick-and-mortars with low prices.
“It is difficult to compete on price because everyone is having sales,” Do said.
Aussie retailer Toymate is aware of this. Danny Bloom, Idan Levy and Calvin Chilchik opened a new Toymate store in Blacktown last weekend, the eighth they've opened in the last three years.
Aesthetically, the store is visually pleasing, with a rainbow-lit entrance and intriguing displays. The floor is even exciting, with race-tracks and Monopoly squares covering up what would otherwise be a boring floor. The store is designed to encourage play and fun.
New Blacktown Toymate store.
“We just feel like the future of retail is being entertaining - having an entertaining offer. So the concept here is like 'lights, camera, action' as well as some in-store activities. We've taken a bigger shop as well because we feel like you need more space to create that magical experience,” Danny Bloom, owner of Toymate said.
You can't miss the store in the shopping centre, the lights and colours stand out against the neutral background of the shopping centre.
“What we want to do, what we've tried our best to do, is we want to bring the colourful toys to life, so that children walk in and just get lost throughout every step of the shop. I think you have to give people a reason to come in to the shop,” Bloom said.
As much as relationships with customers will be an increasing focus, strong relationships with other people in the industry has helped Toymate thrive.
“We've built a good team and good relationships with a lot of the great suppliers in the industry. We feel like we've got a good, young, energised team, which has been a big help in trying to grow the business,” Bloom said.
Although Bloom recognises that traditional retailing is threatened by online shopping, he remains hopeful for the future of toy retail.
“The good thing for toy retailers is that landlords want an entertaining offering and they want something that will bring in kids and mums in to the shopping centres. So there's a good opportunity for toy retailers because we can provide something different to what is normally in here,” he said.
So the take away message from the demise of the once-great TRU and Kim Do's expert opinion is that to survive in the changing retail landscape retailers have to offer more than just goods.
“Find your brand value and what you want to provide to consumers. What is your experienced-based value to your customers?” Do said.