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Toys 'R' Us Is More Than a Business Story

Toys 'R' Us Is More Than a Business Story

By    |   Friday, 16 March 2018 03:24 PM

I wasn’t a Toys ‘R’ Us kid.

By the time the big box wonderland arrived in my hometown, I was a 25-year-old business reporter living 900 miles away. So instead of conjuring up memories of dolls, bikes and video games, the chain’s imminent demise reminds me of what the world was like before it arrived: Most toys were available only around Christmas and even then the choices were limited unless you lived in a big city. We got my doll house in Atlanta.

Toys ‘R’ Us changed that. “They got a million toys at Toys ‘R’ Us that I can play with,” boasted its famous jingle. “The selection—more than 18,000 different toys in every store—is almost inconceivably vast,” wrote David Owen in a 1986 Atlantic article on the toy business. "There's an enormous opportunity in America if you're willing to make a commitment to inventory,” founder Charles Lazarus told him.

Indeed there was.

What Toys ‘R’ Us did for toys, Home Depot and Lowe’s did for hardware; Best Buy and Circuit City for electronics and music; Borders and Barnes & Noble for books; Bed, Bath and Beyond and Linens n’ Things for home goods; and Staples, Office Depot and Office Max for office supplies. The rise of category killers in the 1980s accustomed consumers of all ages to unprecedented variety and choice—in any season and just about any locale. In less populated areas, Walmart filled in the gaps.

By internet standards, the selection Owen termed “inconceivably vast” now looks paltry. “I stopped by my local Best Buy to do research, and found they stock something like 30,000 different titles,” I wrote in 1999. Looking at that text today I wondered if the number was a typo. A mere 30,000? Surely there was a missing zero. Or two.

Internet retailing revives an old challenge for sellers: attracting attention. In the heyday of category killers, you had a chance to catch shoppers’ eyes simply by getting in the stores. The chains wanted as much variety as possible, which gave offbeat offerings a shot. Their decline—as this author and the book industry can testify—makes getting your product discovered much more difficult.

Losing Toys ‘R’ Us means losing an important showcase. “Toys ‘R’ Us is where new products can be discovered and blossom. It’s also where smaller toy companies can have an opportunity,” a concerned Gerrick Johnson, an analyst for BMO Capital Markets, told Bloomberg’s Matthew Townsend last week.

One likely result, foreshadowed by Owen’s extended discussion in the Atlantic of TV tie-ins -- remember Strawberry Shortcake? He-Man and the Masters of the Universe? GoBots? Care Bears? -- is even more emphasis on the licensed products that come with a built-in media blitz. That, in turn, makes it critically important to correctly predict which movie characters will resonate with kids. Right now, Black Panther toys are flying off the shelves, but retailers aren’t offering much variety. “Among the stores carrying Black Panther toys, stores only carried 11 toys on average,” writes NPD analyst Juli Lennett, about “half the number of toys carried on average for Justice League, one-third of Power Rangers, and one-quarter of Spider-Man.” With its stock-everything policy, the old Toys ‘R’ Us would have avoided that mistake.

The toy business is a strange one, combining the most fleeting of fashions with deep nostalgia. “In a world where people disagree about almost everything, it's reassuring that there is a single, universally accepted standard for judging toys,” wrote Owen. “This standard can be stated simply: A toy is appropriate for my child if I had either it or something almost exactly like it when I was growing up.” The demise of Toys ‘R’ Us is more than a business story. There really were Toys ‘R’ Us kids. And unbeknownst to the company or its customers, the chain's stacked-high aisles were giving them psychological training wheels for the near-infinite choices to come.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Virginia Postrel is a Bloomberg View columnist. She was the editor of Reason magazine and a columnist for the Wall Street Journal, the Atlantic, the New York Times and Forbes. Her books include “The Power of Glamour” and “The Future and Its Enemies.”

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Friday, 16 March 2018 03:24 PM
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