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Why Everyone Will Wanna Be A Toys R Us Kid—Again

The greatest consequence of eCommerce has been the separation of shopping from buying

Much of the retail real estate growth that has taken place over the past four or five decades has been motivated by scale for scale’s sake. The industry was fixated on a correlation between doors and dollars. The internet has changed that. And as a result eCommerce penetration is expected to reach 25% by 2026, according to UBS Securities, while store contraction and mall closures will continue in lock-step with one another.

The greatest consequence of e-commerce has been the separation of shopping from buying. The old equations that correlate floor space and sales pace are quickly becoming irrelevant, as are year-over-year store sales. Metrics will still matter, but they will change; as will the store itself.

Fortunately, the age-old desire to gather in the marketplace, engage, socialize, touch and feel goods is still very much alive. Not surprisingly, our innate needs for community pair well with those of the manufacturers and purveyors of goods, many of which are losing access to their customers. Because of accessibility to everything in a mere click, brands are dying for facetime and meaningful engagement.

With the tsunami-like growth of online and the contraction of in-store retailing, the very nature of THE STORE is undergoing dramatic and fundamental transformation. Spaces that at one time were primarily intended for “storing” (hence the name) are being repurposed for “exploring”.

Perhaps the most profound example of this evolution is emerging with the reinvention of the Toys R Us brand. Everything that was associated with the behemoth’s spectacular demise is about to be jettisoned in favor of a “New Retail” retrofit. Gone will be endless aisles of towering boxes filled with the moment’s most marvelous must-haves. Gone too will be the wobbly shopping carts and the migraine-inducing strip-fluorescents that were hallmarks of marathon mark-downs, minute margins, and commoditized commerce.

The rebranded Toys R Us will transport us from the world of distraction and transaction to recovery and discovery—from the old world of “storing” to the new world of “exploring”. It promises to be as different as a Tesla is from a Taurus!

Reimagining an Old Brand for New Realities

At the helm of Tru Kids Brands, the parent of the resurrected entity, is none other than Toys R Us’ former chief merchandising officer, Richard Barry. Barry’s group has partnered with the revolutionary omnichannel technology retailer b8ta, creators of the Retail as a Service (RaaS)

concept, whereby manufacturers pay to play, literally and figuratively. This dramatic new approach to retail monetization turns all the old retailing norms on their heads.

The first two prototype stores, scheduled to open in October, will be less than a quarter of the size of their predecessors. They are expected to range between 6,500 to 10,000 square feet, compared to the 40,000 square-foot boxes of yore. This new model is a true celebration of experiential selling, where the activity, discovery, and fun associated with the product takes precedence over the product itself.

Manufacturers will pay a fee for the privilege of having their goods showcased in carefully staged, experiential venues, designed by Tru Kids Brands. Income from the product sales will go directly back to the manufacturers.

Brand Democratization

One of b8ta’s core differentiators is their penchant for finding the hottest new “tech-toys”—often from start-ups. These entrepreneurs are rarely able to gain access to major markets, let alone get featured in A-class real estate (both online and offline). Similarly, the new Toys R Us will defy the old norms where only the biggest, wealthiest manufacturers got top billing. Now, these small upstarts will be showcased right next to the behemoths.

Among the other benefits to the toy manufacturers will be a treasure trove of data. B8ta’s in-house data platform will provide feedback on customer/product interface, internet sales assistance, and even in-store event management.

Another key differentiator of this new concept will be its emphasis on play and product interaction. The retailer plans to devote 30% of the floorspace to events and product demonstration. The store will feature a full theater for games and movies, as well as a virtual reality room. They are also planning a “treehouse” in the middle of the store for kids’ play.

It would be no surprise at all if another method of monetization included birthday parties and group gatherings, as is the case at the Buzzfeed influenced CAMP, a reimagined “toy store” in New York City’s Chelsea neighborhood.

Brand Humanism

In studying the underpinnings of the unique b8ta brand, from which Tru Kids’ reimagined Toys R Us is being modeled, I learned a bit about their “secret sauce”. Besides the unique, constantly-changing products, and carefully staged, virtually museum-like product presentation, there is a third component that is fundamental to the “terms of engagement”.

B8ta spends heavily on human resources. They understand that the talent, level of training, emotional intelligence, and motivation of their brand ambassadors must be exceptional to yield a positive outcome. The quality of the technology-assisted interaction that takes place between the customer and associates only works if she/he can properly assist and inform the customer in a personal, non-intimidating fashion. These are key to ensuring high brand value for their partner manufacturers.

This is, not surprisingly, in direct opposition to the purely transactional selling ethos of the old Toys R Us. That same “stack and pack” mentality is also emblematic of the downfall of the department stores, where short-term thinking led to stripping out service, whenever and wherever they could.

A Million Technologies To Play With

We know that the disruption occurring in the retail industry is due in large part to the internet’s ease of usage, its price transparency, and the technology associated with these changes. It’s quite clear that some of the same technologies that caused the disruption will empower the New Retail, enriching and supercharging the path to purchase. These cloud-based technologies will help foster the fundamental transition from “transaction to discovery” that will alter the in-store experience and its purpose.

Because Toys R Us’ success will no longer be measured solely in conventional, dollar-per-square-foot terms, the entire customer experience must be immersive, if not transformational. This will require a very well-planned-out visitor experience that blends products, product testing, and event venues in a fluid and exciting manner. It must combine scripted product information with more dynamic, age-appropriate discovery, learning and “wonderment”. Technology will play a huge role in the success of this concept and is the core component of unified retail.

The exact technology systems being employed at the new Toys are very much under wraps. However, given that they are building onto the stealthy system that b8ta has already developed, several assumptions can be made.

Imagination and Tech Augmentation

Unlike legacy retailers that are dealing with siloed technology systems that generally separate in-store POS systems from e-commerce activity, you can bet that Toys will have a cloud-based system that seamlessly integrates in-store and online activity. Their associates will likely have a 360-degree view of the customer. This includes their online and offline behavior as well as global inventory availability and additional supply chain information, easily at their disposal.

Like b8ta, the store will no doubt feature designated tablets with each product to enable both assisted and unassisted discovery and product demonstration. It is also likely, as is the case with b8ta’s stores, that customers will not be waiting in check-out lines. Associates will most certainly be equipped with tablets for mobile POS.

The path to purchase for nearly every consumer demographic now involves smartphone use throughout the shopping experience. The New Retail will require that retail infrastructure be equipped to leverage the opportunity from both the buy and sell side of the equation. Today’s technologies can assist smartphone-toting customers in wayfinding via geo-locating technology, along with QR codes to understand product differentiators, consumer reports, and so on.

Among the many new technologies that support unified commerce are “smart lighting technologies,” which ingeniously pair the latest LED lighting technology with retail navigation and location analytics capabilities in the same systems. This both benefits the retailer as well as provides the customer with some of the benefits of digital shopping, in-store. Such is the case with the Philips/Signify Interact brand lighting system.

Regardless of the trajectory that the new Toys R Us will take, the path the developers are taking will become well-traveled by the New Retail voyagers going forward. These physical embodiments of unified commerce will become a technological, experiential, and immersive component of the retail path to purchase. The store will become an even more dynamic chapter of the entire brand story.

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