Game’s Over: What Forward-Thinking Retailers Can Learn From The Demise of Toys “R” Us

On March 15, Toys “R” Us filed documents with the U.S. bankruptcy court announcing the closure of roughly 800 stores if a sale couldn’t be made, putting thousands of employees—and itself—out of business.

For decades, the retail chain—founded in 1948—was king when it came to toy sales, but it struggled in recent years as one-stop shops like Walmart Inc. undercut them by selling popular toys at discounted prices, and e-commerce giants like Amazon made it even easier for cash-strapped parents to buy presents without ever stepping inside a store.


The end of an era

Last September, Toys “R” Us filed for bankruptcy with a supposed plan in place to turn things around, but it seems that spotty sales during the holiday season was the final nail in the coffin. (In recent months, shoppers reported empty shelves and a lack of sales staff in stores.)

But perhaps Toys “R” Us’ biggest downfall was failing to really embrace experiential retail. It should have been an entertainment destination, not just a place to buy toys.

According to Financial Post, Chief Executive Officer Dave Brandon had a vision of kids “dragging their parents to our stores because they want to see what’s going on.” But that was an unrealistic goal when unboxing videos rakes in millions of subscribers and dollars on YouTube and customers are reluctant to enter brick-and-mortar locations if there isn’t much of an incentive.

To be fair, Toys “R” Us had been making strides to regain consumers by offering Nerf target practice, Pokémon trading card and birthday parties, installing video screens and motion-sensor lights, but it was too little too late.

But that doesn’t mean what’s happening to Toys “R” Us has to befall its competitors.

Educate and Entertain

Major retailers need to re-think the in-store experience to keep customers coming back (or entering in the first place). To do so, they have to turn their stores into both educational and entertainment destinations.

On the educational side of things, it’s an easy opportunity for retailers to provide free learning opportunities, whether it’s through storytimes for parents or nannies doing daily errands with their children in tow (Toys “R” Us had a large books and learning section they could have drawn from) or by offering other forms of educational programming.

Before the GameStops of the world took over, Toys “R” Us was widely considered a go-to destination for video games. With the rise of e-sports, competitors can (and should) host gaming competitions that double as product demonstrations. (Cineplex theatres has been experimenting in the sphere with their GameOn series, which brings hardcore gamers from across the country into their local theatres to compete for massive cash prizes and bragging rights). Same goes for LEGO building competitions or in-store races (remember Power Wheels?).


Final Thoughts

Retail these days isn’t about selling products per se. It’s about the shopping experiences that keep consumers coming back.

If a retailer wants to stand out amongst the competition, they need to focus less on delivering the season’s hottest toys, and more on moments customers can’t find anywhere else.

The dollar amount may ultimately be the bottom line, but the opportunities to educate, entertain and engage with consumers are endless.




Marc Gingras is the CEO of Foko Retail, a platform that delivers the art and science of retail execution. He is an entrepreneur and angel investor, and sold his last venture,, to Blackberry. Marc holds an MBA from INSEAD, a MASc in Management Sciences from the University of Waterloo and a BASc in Mechanical Engineering.