The TRU Transformation initiative, which Toys ‘R Us has undertaken in its effort to shore up sagging sales and redefine its image in the toy market, has one primary goal: Make stores fun. Achieving this goal will involve several changes.
In stores, the transformed space will feature more play areas, designed to attract young consumers to the experience of a toy store. Interactive media throughout the new stores will aim to appeal to both children and their parents. Furthermore, staffers will be equipped with handheld inventory devices so that customers can obtain detailed information from any employee they encounter.
What they won’t do is attempt to compete on price. With the recognition that consumers can nearly always find lower prices at competitors such as Walmart or Amazon—both of which can use toys as loss leaders and make up for any revenue losses with sales in other product areas—the transformed Toys ‘R Us will not seek to be the low price option.
To overcome the price differential, in addition to its in-store experience plans, Toys ‘R Us will expand its loyalty and rewards program. In an effort to shift customers’ attention from prices, it also plans to reduce its promotional offers.
Still, the transformation has no guarantees of success. External factors, such as declining birth rates, challenge the toy market overall. And for many parents, the confidence provided by online retailers, which guarantee the delivery of the latest must-have toy, whether an Elsa Frozen doll or an Avengers playset, may be irresistible. To achieve its goals, Toys ‘R Us needs to make sure it can get shoppers to its transformed stores, so that they can experience the fun and be transformed into loyal shoppers themselves.
Discussion Questions:
- What is Toys ‘R Us’s new strategy?
- On a scale of 1 to 10, with 1 being “run of the mill” and 10 being “revolutionary,” how would you rate this strategy?
- Realizing that most of you are not in Toys ‘R Us’s target market, would this new strategy cause you to shop there rather than at Walmart or Amazon?
Sources: George Anderson, “Toys ‘R Us Transformation to be Built on Fun,” Retail Wire, April 17, 2015; Bryan Pearson, “Run on Fun: Toys ‘R Us Playing Customer Experience to Win Against Walmart, Amazon,” Forbes, April 16, 2015