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There's nothing about the brick & mortar toy space that's inherently living on borrowed time. It was Toys 'R' Us' own mismanagement that doomed it. Toy stores

There's nothing about the brick & mortar toy space that's inherently living on borrowed time. It was Toys 'R' Us' own mismanagement that doomed it. Toy stores can be a destination. Provide a compelling experience for parents and kids alike. It's easy to imagine a space where kids get to play with toys hands-on, and parents get to judge for themselves whether they think they're appropriate in terms of fun and quality—something you can't do online. Make the adult experience a mixture of café and Apple store, and give the kids a safe "penned in" experience like IKEA does in their kids' section. Parents will enjoy the respite, and kids will beg to go. And of course, once they get there, they'll cajole their parents to spend more money. Never underestimate the power of a child in a store. IKEA has nailed the brick & mortar experience, even though most of their products could easily be purchased online. Toys 'R' Us merely had to abandon their hubris and old thinking, and they could have killed it. Instead, they languished with a chain of dirty, disorganized, depressing stores, ill-treated and unmotivated employees, and no vision. They didn't have to die, but their leadership and strategy did.

pdpi 8y ago
Hamley's (in London) seems to have nailed the whole "destination" thing, and I think it's largely because it treats the adults as bigger, hairier kids.
- nindalf 8y ago
  I'm a grown ass man and I'd legit be excited to go to Hamley's.
tlb 8y ago
There are a few destination toy stores, but mostly limited to affluent, progressive markets like NYC, SF and Boulder. If your theory is correct, they should be able to scale up nationwide. Why do you think this hasn't happened?
gkoberger 8y ago
It's easy to rattle off a list of things on HN, but a lot harder to build. If people were invited to come play with toys, they'd just do it for free, enjoy the day, and buy it online after. Your other ideas just seem like... free babysitting? It's not like parents are going to shop for toys while their kids are babysat for free. I agree the stores aren't great now... but they were working with insane debt and a dying business model. I don't think it's impossible to sell toys (see: Disney), but it's really hard to do it when you're trying to pivot something like Toys 'R Us with no money to spend and nowhere to really go.
- jiggliemon 8y ago
  The LEGO stores have this exact experience, and they seem to be doing well.
- emodendroket 8y ago
  I'd argue that a toy store, more than any other kind of retailer, is insulated from that, because the store has an little advocate for spending ten dollars extra to buy the product right now with most shoppers. And going to the toy store itself is kind of an activity that I don't think you can replace with online shopping.
  - sasaf5 8y ago
    Anecdote time: I took my cousin (12) to a toy store once. First it was difficult to get him out of his iPad and get out of home. Second he was completely indifferent to anything in the store. We ended up buying some card games and credit for mobile games. + There aren't many kids anymore.
    - nradov 8y ago
      I don't know why you're being down voted. For better or worse, this is common child behavior now.
      - sasaf5 8y ago
koolba 8y ago
IKEA doesn’t work online because of the cost of shipping on a per unit basis.
- seanmcdirmid 8y ago
  They have a flat charge, so if you buy a lot it can work. A lot of third party IKEA resellers on Amazon exist because of this (they basically run to the local IKEA to fulfill an order with better low volume shipping options).
  - randomsearch 8y ago
    > They have a flat charge, so if you buy a lot it can work. They don't, at least in the UK. You pay a variable charge depending on what is shipping.
    - seanmcdirmid 8y ago
      Sorry, I met the USA. Other countries will be diffferent of course, like China where deliveries are expected and rediculously cheap even including assembly.
      - randomsearch 8y ago
        According to their US site: Shipping rates are approximate and calculated by weight/volume & retail value of the order. https://www.ikea.com/us/en/store/homeshopping/shipping_calculator https://www.ikea.com/us/en/store/homeshopping/shipping_calcu... Maybe it's changed, or that info is wrong.
        seanmcdirmid 8y ago
        Hmm. When we did our ikea order in late 2016, it was $99 for as much as we wanted.
- CalRobert 8y ago
  Ikea works well online for me and several people I know. The main factor is that we live in city centre and don't own cars, so 40 euro (or whatever it is) for shipping compares favourably to getting a taxi or a short-term car hire like car2go, gocar, etc. TBH I even like visiting Ikea sometimes but ordering online solves the whole "this is going to chew up a whole Sunday afternoon" problem too.
yourapostasy 8y ago
IKEA's physical presence only works because they are sole and best-priced supplier of what they offer. Don't build a retail business on the premise that people will want what they handle in the store right now instead of saving a few bucks ordering it online from elsewhere. The underlying price of the real estate to the revenue brought in by a toys-based sales funnel simply makes these locations untenable to flog products that can be sourced online for cheaper. You need a hell of a lot of sales volume to keep up, and online took away enough volume to starve these models. The parenting culture is also wise to the models that are built around "hook 'em young and get them to insist on instant gratification". Look inside parenting forums and you'll see a shift in shopping habits, where toy stores are deliberately and consciously avoided precisely because parents are annoyed at the effects. Personally, I'd rather see more parents teaching children through involvement in daily activities than throwing more toys (including computer and video time) at their children. We're "over-toyed", over-retailed, and "under-practicum'd".
- throw55 8y ago
  "toy stores are deliberately and consciously avoided precisely because parents are annoyed at the effects" This. I have a few kids of my own and make a point to never go with them to toy stores - they go crazy from looking at all the possible options and end up being unhappy because no matter what we end up buying, there is a gazillion things we ended up not getting. Much better to get ideas from wherever (window shopping, other kids, forums, etc) and buy online - free no hassle / screaming delivery. Even if you end up getting not the "perfect" toy they would have picked, it's a superior shopping experience for the adult.
- jinglebells 8y ago
  Good point. I've got two young kids, they're not particularly over-toyed but over the years the collection has grown. My wife got fed up with the toys not being put away so she put all the toys in the attic. The kids now play with the boxes, turns out they didn't even need the toys.
seanmcdirmid 8y ago
FAO Schwartz was such a destination as you describe, until they ran into trouble and were bought by the giraffe.
ghaff 8y ago
And the ultimate toy destination store FAI Schwarz also went out of business. Maybe Toys R Us could have done better but they were in a place where digital was making big gains. I’m not sure to what degree you can focus on elaborate experiences for stores that are in every shopping mall.
jonhendry18 8y ago
" It was Toys 'R' Us' own mismanagement that doomed it." It was the private equity investors who loaded it up with debt in order to cash out who doomed it. You don't have a hope in hell of adjusting to market changes when your funds are tied up paying off the loans your owners made you take on in order to fund their takeover.
- gaius 8y ago
  It’s insane that as a PE you can borrow money, buy a company with it, transfer the debt to the company and you magically own the company having paid $0 of your own money for it.

pdpi 8y ago

Hamley's (in London) seems to have nailed the whole "destination" thing, and I think it's largely because it treats the adults as bigger, hairier kids.

nindalf 8y ago
I'm a grown ass man and I'd legit be excited to go to Hamley's.

tlb 8y ago

There are a few destination toy stores, but mostly limited to affluent, progressive markets like NYC, SF and Boulder. If your theory is correct, they should be able to scale up nationwide. Why do you think this hasn't happened?

gkoberger 8y ago

It's easy to rattle off a list of things on HN, but a lot harder to build. If people were invited to come play with toys, they'd just do it for free, enjoy the day, and buy it online after. Your other ideas just seem like... free babysitting? It's not like parents are going to shop for toys while their kids are babysat for free. I agree the stores aren't great now... but they were working with insane debt and a dying business model. I don't think it's impossible to sell toys (see: Disney), but it's really hard to do it when you're trying to pivot something like Toys 'R Us with no money to spend and nowhere to really go.

jiggliemon 8y ago
The LEGO stores have this exact experience, and they seem to be doing well.
emodendroket 8y ago
I'd argue that a toy store, more than any other kind of retailer, is insulated from that, because the store has an little advocate for spending ten dollars extra to buy the product right now with most shoppers. And going to the toy store itself is kind of an activity that I don't think you can replace with online shopping.
- sasaf5 8y ago
  Anecdote time: I took my cousin (12) to a toy store once. First it was difficult to get him out of his iPad and get out of home. Second he was completely indifferent to anything in the store. We ended up buying some card games and credit for mobile games. + There aren't many kids anymore.
  - nradov 8y ago
    I don't know why you're being down voted. For better or worse, this is common child behavior now.
    - sasaf5 8y ago

koolba 8y ago

IKEA doesn’t work online because of the cost of shipping on a per unit basis.

seanmcdirmid 8y ago
They have a flat charge, so if you buy a lot it can work. A lot of third party IKEA resellers on Amazon exist because of this (they basically run to the local IKEA to fulfill an order with better low volume shipping options).
- randomsearch 8y ago
  > They have a flat charge, so if you buy a lot it can work. They don't, at least in the UK. You pay a variable charge depending on what is shipping.
  - seanmcdirmid 8y ago
    Sorry, I met the USA. Other countries will be diffferent of course, like China where deliveries are expected and rediculously cheap even including assembly.
    - randomsearch 8y ago
      According to their US site: Shipping rates are approximate and calculated by weight/volume & retail value of the order. https://www.ikea.com/us/en/store/homeshopping/shipping_calculator https://www.ikea.com/us/en/store/homeshopping/shipping_calcu... Maybe it's changed, or that info is wrong.
      - seanmcdirmid 8y ago
        Hmm. When we did our ikea order in late 2016, it was $99 for as much as we wanted.
CalRobert 8y ago
Ikea works well online for me and several people I know. The main factor is that we live in city centre and don't own cars, so 40 euro (or whatever it is) for shipping compares favourably to getting a taxi or a short-term car hire like car2go, gocar, etc. TBH I even like visiting Ikea sometimes but ordering online solves the whole "this is going to chew up a whole Sunday afternoon" problem too.

yourapostasy 8y ago

IKEA's physical presence only works because they are sole and best-priced supplier of what they offer. Don't build a retail business on the premise that people will want what they handle in the store right now instead of saving a few bucks ordering it online from elsewhere. The underlying price of the real estate to the revenue brought in by a toys-based sales funnel simply makes these locations untenable to flog products that can be sourced online for cheaper. You need a hell of a lot of sales volume to keep up, and online took away enough volume to starve these models. The parenting culture is also wise to the models that are built around "hook 'em young and get them to insist on instant gratification". Look inside parenting forums and you'll see a shift in shopping habits, where toy stores are deliberately and consciously avoided precisely because parents are annoyed at the effects. Personally, I'd rather see more parents teaching children through involvement in daily activities than throwing more toys (including computer and video time) at their children. We're "over-toyed", over-retailed, and "under-practicum'd".

throw55 8y ago
"toy stores are deliberately and consciously avoided precisely because parents are annoyed at the effects" This. I have a few kids of my own and make a point to never go with them to toy stores - they go crazy from looking at all the possible options and end up being unhappy because no matter what we end up buying, there is a gazillion things we ended up not getting. Much better to get ideas from wherever (window shopping, other kids, forums, etc) and buy online - free no hassle / screaming delivery. Even if you end up getting not the "perfect" toy they would have picked, it's a superior shopping experience for the adult.
jinglebells 8y ago
Good point. I've got two young kids, they're not particularly over-toyed but over the years the collection has grown. My wife got fed up with the toys not being put away so she put all the toys in the attic. The kids now play with the boxes, turns out they didn't even need the toys.

seanmcdirmid 8y ago

FAO Schwartz was such a destination as you describe, until they ran into trouble and were bought by the giraffe.

ghaff 8y ago

And the ultimate toy destination store FAI Schwarz also went out of business. Maybe Toys R Us could have done better but they were in a place where digital was making big gains. I’m not sure to what degree you can focus on elaborate experiences for stores that are in every shopping mall.

jonhendry18 8y ago

" It was Toys 'R' Us' own mismanagement that doomed it." It was the private equity investors who loaded it up with debt in order to cash out who doomed it. You don't have a hope in hell of adjusting to market changes when your funds are tied up paying off the loans your owners made you take on in order to fund their takeover.

gaius 8y ago
It’s insane that as a PE you can borrow money, buy a company with it, transfer the debt to the company and you magically own the company having paid $0 of your own money for it.