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Toys ‘R’ Us Didn’t Have to Die

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Re: Toys ‘R’ Us Didn’t Have to Die

#61

Post by seanmcdirmid »

jaysonelliot wrote: post #10
gkoberger wrote: post #5

I read the whole article, and I didn't really see a convincing argument that it didn't have to die. Sure, it could have eked out a few more years... but it was living on borrowed time. Not only do most people shop online now, most toys are also online. I imagine most parents put money into TV shows, video games, iPhone apps, etc.

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—…

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

Re: Toys ‘R’ Us Didn’t Have to Die

#62

Post by seanmcdirmid »

koolba wrote: post #26
jaysonelliot wrote: post #10

Earlier quoted context omitted.

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—…

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

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).

Re: Toys ‘R’ Us Didn’t Have to Die

#63

Post by seandougall »

yourapostasy wrote: post #54
duxup wrote: post #41

Earlier quoted context omitted.

What I don't get is there are a lot of empty storefronts and places moving that I see... and retailers say the rents are still sky high for those storefronts. Is it really worth the property owners keeping them empty?

> Is it really worth the property owners keeping them empty? Yes. It's a tax dodge. [1] [2] The owners "...hold out for higher rents to increase the worth of their properties because value is based on future income stream...They can afford to forego current rental income, waiting for higher-paying tenants because they claim big business losses. Landlords get a tax loss from negative rental income when no rent comes i…

Thanks for that — it helps start to make sense of it. I wonder how sustainable the practice is; presumably a property owner making that sort of calculated decision is also looking at the negative impact on their other tenants.

Re: Toys ‘R’ Us Didn’t Have to Die

#64

Post by duxup »

yourapostasy wrote: post #54
duxup wrote: post #41

Earlier quoted context omitted.

What I don't get is there are a lot of empty storefronts and places moving that I see... and retailers say the rents are still sky high for those storefronts. Is it really worth the property owners keeping them empty?

> Is it really worth the property owners keeping them empty? Yes. It's a tax dodge. [1] [2] The owners "...hold out for higher rents to increase the worth of their properties because value is based on future income stream...They can afford to forego current rental income, waiting for higher-paying tenants because they claim big business losses. Landlords get a tax loss from negative rental income when no rent comes i…

I figured it had to be something with the tax laws, otherwise it makes no sense how much I see empty some places.

Re: Toys ‘R’ Us Didn’t Have to Die

#65

Post by suresk »

PhasmaFelis wrote: post #30

The thing that's really lacking to me in online toy stores is, I guess, discoverability. Amazon can give you a list of all the Transformers, or all the Legos, in an instant, and with a bit of prodding it does an acceptable job of showing you the current top-selling toys, but it's impossible to walk down an aisle at Amazon and see something awesome that you've never heard of.

Yeah, my wife and I are definitely disappointed they could find a way to make it work, largely because of discoverability. It definitely made it easy to find new toys, see how they would look/feel in person, etc. Others stores just don't have the selection they did and the experience on Amazon isn't as easy.

Another thing is knowing the quality of stuff you are getting. Of course, plenty of cheap crap gets sold at Toys-R-Us and elsewhere, but some of the stuff on Amazon is in a league of its own in terms of poor quality and I suspect it will continue to get worse.

Re: Toys ‘R’ Us Didn’t Have to Die

#66

Post by yourapostasy »

Analemma_ wrote: post #51
hn_throwaway_99 wrote: post #20

Earlier quoted context omitted.

It at least sounds plausible to me that you could make a toy store a "destination" business if you did something to differentiate it from Amazon: kids parties, video game tournaments, something. You'd have to transform what it means to be a "toy store". Of course, that takes a lot of money, and with Toys-R-Us' debt load there was no way they could have afforded that.

I don't know if it scales up to big box stores, but this– plus adding food/café– is what a lot of game and hobby stores have been doing, and it seems to be working. There at least five stores like this in the Seattle area (2 of Café Mox, Meeples, etc.) and they seem to do good business.

Of more interest is will this scale up culturally. Going in this direction at scale means monetizing physical socialization. I've observed this while touring Tokyo, where the society and culture has accepted eye watering residential real estate prices with accompanying micro-sized residences by American standards, in exchange for scads of commercially-run spaces used for social activities. Socialization there seems to take place outside of people's homes, and in restaurants, bars, and other commercial venues. These venues seem predominantly mom and pop sized and run in the non-tourist areas, small, and affordable.

I have no idea if that will translate into American urban culture; I can see cases made for Millennials and post-Millennials embracing this model and rejecting it. I don't see it happening in the suburbs, much less exurbs. For this business model to work at scale, it would have to be embraced ubiquitously, but I'm not convinced there is a lot of space left to scale into after Starbucks got there first in so many locations.

Re: Toys ‘R’ Us Didn’t Have to Die

#67

Post by sasaf5 »

emodendroket wrote: post #27
gkoberger wrote: post #22

Earlier quoted context omitted.

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…

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.

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.

Re: Toys ‘R’ Us Didn’t Have to Die

#68

Post by throw55 »

yourapostasy wrote: post #45
jaysonelliot wrote: post #10

Earlier quoted context omitted.

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—…

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 pro…

"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.

Re: Toys ‘R’ Us Didn’t Have to Die

#69

Post by walru »

wgerard wrote: post #39

What a trip. I used to go to the Times Square location with people who came in from out of town, as an attraction for when they inevitably wanted to check out Times Square. The article doesn't really do justice to what a spectacle it was (which is saying something, since the article calls it out repeatedly). The person-sized Lego Hulk they built for that store is still my phone background. Made this even more shockin…

Flagship stores are a form of advertising. Many many retailers embark on this journey. Does advertising work? Or, more importantly, which is the case here, does selling your store shelves to specific brands hurt? (rather than stocking what's selling?) Some youtubers have done in length videos on Star Wars toys that sat on shelves for years.

Re: Toys ‘R’ Us Didn’t Have to Die

#70

Post by rorykoehler »

thisisit wrote: post #8

Retailing seems to be dying in US irrespective of the company: https://www.bloomberg.com/news/articles/2018-04-17/retail-st... Couple of years ago, one of my friends bought a store at a strip mall. The store was making a loss. And the previously owners were an elderly couple. So my friends thesis was that they weren't exactly tuned into the digital presence business and it was still entirely possible to run a store i…

The same is happening in Singapore. The maps have re-strategized to focus on food and drink experiences. Now people go out to make to hang out mainly
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