Thriving Through the Toys R Us Liquidation

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Retail Door

The Toys R Us liquidation has begun. Customers everywhere will be stocking up on toys, taking a chunk out of toy sales from every other channel.  People won’t need to shop for birthdays for months. Some might not need to shop for Christmas at all.

That is the conventional wisdom you’ll hear, and it sounds bleak for indie toy stores across the country. If you feel the urge to hunker down and wait for all of this to pass, I can understand.

The reality, however, is far from the conventional wisdom.

First, the volume of inventory they are liquidating is not what it could have been. Vendors have been slow to replenish Toys R Us since Christmas. The bankruptcy and the threat of liquidation has kept TRU inventory levels far below normal. For most markets, the liquidations will go quickly – they just don’t have that much to sell.

Second, the inventory they are selling isn’t the same as that on indie shelves. Sure, this will affect LEGO, Playmobil, and a few other top cross-over brands, but for the most part, the TRU liquidation is compiled of a different product mix.

Third, that crowd is not our crowd.

Here are the three most likely shoppers at a Toys R Us liquidation:

  • Loyal Toys R Us Customers
  • Bargain Hunters
  • Curiosity Seekers

The first group will be the largest. People who loved Toys R Us will want to be part of their last days. These customers were not indie customers. We won’t lose any business because of them shopping the sale.

The bargain hunters will be next. These customers are always looking for a deal. They scour the Internet, read through the Sunday inserts, and only shop when the price is right. Not only are they likely not our customers; if they are, they aren’t our most profitable.

In truth, the bargain hunters are our allies. The more of them there are, the sooner Toys R Us gets rid of all the inventory and the faster the liquidation.

The third group, the curiosity seekers, have not yet decided whether they will join the frenzy of buying products during the liquidation and more importantly, where they will shop after.

This is our opportunity. If we can convince the curiosity seekers to hold off on buying the remaining inventory (by now the LEGO® and Playmobil® shelves have already been wiped clean), we can turn many of them into our customers down the road.

Turn Up the Volume

Leveraging everything from email taglines to social media advertising, start talking now about how you’ll be able to step into the void left by Toys R Us. Talk about the way you select toys to best fill their needs and help their children grow. Make sure they know about the fun events, the educational programming, and the magical experiences you have to offer. Start talking about your hands-on demos, your unique services, and how you want to take care of them.

A message that may resonate with this group:

“Go beyond buying a product just because it’s on sale. Invest your money in a better selection and quality of toys guaranteed to delight the kids and kids at heart you love – all while making new memories for them at your local toy store.”

The more Toys R Us stores liquidate down to the bottom of their inventory barrel, the stronger this message becomes. Not only will the curiosity seekers hear you, so will the loyal Toys R Us shoppers. Those loyal customers might fill up on birthday gifts now, but they will be starving for somewhere new to go for the holidays.

You still may take a small hit the next month or two, especially the smaller your market, but by the time we meet in New Orleans there will be a few million customers already wondering where they are going to shop for toys next. Walmart and Amazon will be talking to them. You will be, too.

PS Look for my article in an upcoming EdPlay magazine and my presentation Getting Your Customers to Talk! (About You) at ASTRA’s Marketplace & Academy this June for specific ways to win over the loyal Toys R Us shoppers this holiday season.


Phil 2017 Closeup
Phil Wrzesinski is a former toy retailer who now uses his decades of retail experience helping other independent retailers compete and grow. You can learn more about what Phil is doing at www.PhilsForum.com.

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