It seems like only yesterday that I stood in interminably long lines at Toys R Us to check out with a shopping cart full of Christmas and birthday gifts for my children. Now there won’t be any more waiting. Toys R Us announced the obvious last week – the closure of its 200 US stores.
How could a popular toy supermarket with a lovable mascot named Geoffrey go from boom to bankruptcy? From all appearances, its customers grew up and left the toy-filled aisles of Toys R Us behind in favor of ordering toys online.
In that respect, what happened to Toys R Us isn’t so unique. Other retailers are suffering a similar fate at the hands of technology, but perhaps none evokes the kind of nostalgia as the demise of the store with the backwards R in its marquee and a friendly giraffe. Most bankruptcies are greeted with grumbling and snarkiness. The Toys R Us store closures have sparked, perhaps ironically, threads of online reminisces about the good old days waiting for the doors to open so you could dash to the shelf with that year’s most coveted – and scarce – toy.
The nostalgia for Toys R Us should be comingled with a good dose of real-time anxiety about how your own business enterprise could be disrupted by change, whether from technology or some other source.
A friend of mine who worked for Expedia recalled he lost sleep worrying that Amazon would extend its reach to the travel and tourism market. One analyst is egging on Amazon, "Amazon's focus on selection/service, pricing and frictionless payment that drive conversion and stronger user economics also translate directly to travel." That’s not how a travel agent would think of his or her service, and it’s also not the same value proposition of companies like Expedia. But Amazon’s entry into this space could disrupt both big time.
The specialty toy business was always cyclical. Toys R Us founder Charles Lazarus sought to keep customers coming through the doors by offering good deals on diapers. Strategically locating the diaper shelves forced shoppers – and their kids – to eyeball toys, puzzled and darling stuffed animals. When Walmart started selling cheaper diapers and Amazon started selling and delivering them to your doorstep, the eyeball tours in Toys R Us started to drop off and the long holiday lines at checkout sparked shudders, not sweet memories. Who would have thought an iconic toy store would be humbled by diapers.
Toys R Us wasn’t oblivious to its circumstances. It cut a deal with Amazon to sell its toys online, but the deal eventually went sideways. Who knows exactly why, but possibly because Toys R Us needed Amazon more than the reverse. Knowing your weak spot and realizing the extent of your vulnerability are not the same thing.
Many Americans have fond memories of going to movie houses to see new flicks, munch on popcorn and maybe have the first kiss with their eventual mate. But those fond memories haven’t prevented them from renting movies or subscribing to services that allow them to watch what they want where and when they want.
Eating healthier at home usually meant more grocery shopping and more time in the kitchen. Now you can order healthy fare that is delivered to your doorstep.
Starbucks has recognized a lot of its coffee drinkers don’t want the experience of hanging out in its coffee shops and would prefer to drink their brew from a bottle they buy at a store – or have delivered along with other groceries.
No business is immune from disruption. Looking for and marketing disruptive ideas has become its own industry. Business leaders need to be vigilant and attentive to trends and innovations so they can contemplate whether they will become the messy diapers that destroy their wonderful toy empire.
Gary Conkling is principal and co-founder of CFM Strategic Communications, and he leads the firm's PR practice, specializing in crisis communications. He is a former journalist, who later worked on Capitol Hill and represented a major Oregon company. But most importantly, he’s a die-hard Ducks fan. You can reach Gary at firstname.lastname@example.org and you can follow him on Twitter at @GaryConkling.