The rise of the Megacorporations and the fall of Toy R Us

Small mom&pop toy store here in my town is doing well. They focus on educational and other more intellectual toys for the most part - blocks, kites, magna tiles, legos, etc. The upper middle class parents here eat that sh*t up. LOL. The Toy's R Us near me is kind of ghetto.

a reply to: Edumakated

Why isnt that a thread?

originally posted by: StoutBroux
Many small mom and pop's sell their items through Amazon. Many brick and mortar stores, both large and small sell their wares on Amazon. I know a lady who operates out of her house that sells items on Amazon. Amazon is

Then once Amazon knows about an item they add it into their Amazon Prime inventory at a lower price.

a reply to: JAGStorm

I'm waiting for the 3D printer in the house that will just make anything I order.

Toys R Us is just a Canary in the Coal Mine that is the death of retail brick and mortar stores for many things. It's hard to compete when the other person doesn't have the same expenses related to selling, storing or shipping the same product.


I feel bad sometimes when I shop physically at a store only to look it up online for 30% or more less.

Seems like karma to me. Toys-r-us donates to “Planned” Parenthood then goes out of business due to lack of customers. Good riddance.

originally posted by: IgnoranceIsntBlisss

originally posted by: StoutBroux
Many small mom and pop's sell their items through Amazon. Many brick and mortar stores, both large and small sell their wares on Amazon. I know a lady who operates out of her house that sells items on Amazon. Amazon is

Then once Amazon knows about an item they add it into their Amazon Prime inventory at a lower price.

Not just Amazon, other sellers jump on the same trend. You have to find really obscure niche or have a unique product to make it work before all the vultures come in to feast on your bounty.

Had a friend who did it with food worms for pet reptiles and even then, he got crowded out by the competition.

originally posted by: operation mindcrime
a reply to: JAGStorm

Yeah the whole "showrooming" has been an issue for some time now. People going into appliance-stores, getting adviced and subsequently go home and find the item online...

Business owners are not too happy with this development and even call it "advise theft"...

It is their game, we just learned how to play it. As soon as Internet prices/delivery costs exceed buying from the store, back we go.

Peace

I had a little old lady come in a few weeks ago that wanted that "box with the woman's voice." She had no idea what it was she wanted, only knew it sounded female and a friend had one. I finally managed to deduce that she wanted Alexa but we don't carry that as it's a direct competitor (Amazon) product. Despite telling her we don't carry it at all and can't get it for her, she persisted in making me look it up online and answer all her questions about the product we don't carry, can't get, and I know very little about. Nearly half an hour with this customer so I could advise her on something she was going to buy from online and not even from our online shop.

Great stuff.

Toys R Us could have capitalized on the changes to the purchasing world if they'd established an online presence early like many others did. Not only that, but they could have gone that extra step and added in those online order kiosks so people could order products the store didn't have in stock and have it shipped to the store or their home.

They just didn't keep afloat of the changes in kids desires in toys. We see more kids loitering around in the electronics section looking at the games and tablets than in the toy section. Most of those in the toy department are the much younger crowd grabbing at the Paw Patrol and Hatchimals toys.

Actual brick and mortar stores are being phased out or slimmed down. I don't see the decline stopping or reversing unless something comes along to unseat Amazon from the lead position.

a reply to: JAGStorm

Toys r us would have gone under even if Amazon never existed. This is why anecdotes don't equal evidence.

a reply to: JAGStorm

Why can't a failed company's failure be its own mismanagement? Everything I've read on the matter suggests that Toys R' US was over leveraged with massive debt and they couldn't handle it because of a poor business plan of being a major toy chain with a premium price (so they lose market share to Wal-Mart, Target, Amazon) but without a premium gimmick that makes smaller toy stores with premium prices profitable.

originally posted by: nwtrucker
As Toys-R-Us sells only toys...

You forgetting their other channels like Kids'R'Us and Babies'R'Us? They did and still do sell more than toys and had been selling online since 1998. And tough deal if someone wants to place loss leader with certain items, maybe if you ran your business better they'd wouldn't be going bankrupt.

Maybe we can bail them out for nostalgia's sake...

a reply to: JAGStorm

Toys r us failed for 2 reasons one poor choices by the owner that bought them which pushed 400 million in debt on to them. The buyout was a loan taken to pay for the company and then the investors shoved that loan on to the company. This is border line illegal since they forced the company to pay back the money they borrowed. Then the banks were unwilling to extend a loan 400 million to a company that made 720 million a year. There is no reason a bank shouldn't loan this money other then they don't trust the owners to repay.

Toys r us people should be going to jail over this and has nothing to do with amazon or online sales.

I'm amazed that nobody has mentioned the $15 dollar an hour minimum wage push. I work for a company that designs and manufactures point of purchase displays. I got laid off the beginning of January along with over 40 other people. Toys R Us was one of our customers. The person who mentioned people going to the stores to look and then buying from home is exactly right. An emerging trend is for companies to have showrooms where people can go and look at things and then buy them online. The thing is that these showrooms are only going to be in the big cities.

originally posted by: AugustusMasonicus

originally posted by: nwtrucker
As Toys-R-Us sells only toys...

You forgetting their other channels like Kids'R'Us and Babies'R'Us? They did and still do sell more than toys and had been selling online since 1998. And tough deal if someone wants to place loss leader with certain items, maybe if you ran your business better they'd wouldn't be going bankrupt.

Maybe we can bail them out for nostalgia's sake...

Do you think those other efforts won't fall prey to the same mechanisms? If their mainstay goes down, and it is, then likely the other will follow suit.

In the day, when the horse and carriage was the transportation norm, the invention of the Model T assured the change. Not poor business practices. The analogy is weak, but there is a point when continuing loses even more money than recognizing an inevitability.

Then again, your smarter than me, you may see an 'out' they missed. I can't see one.

originally posted by: nwtrucker
Do you think those other efforts won't fall prey to the same mechanisms?

Uh, Kids'R'Us crapped the bed in 2003, F.A.O. Shawrz did the same in 2015, they have a history of bad business decisions.

Then again, your smarter than me, you may see an 'out' they missed.

There is no 'out' once your this deep down the Poor Decision Path.

I don't spend a lot of time around small children but I do spend a lot of time around pre-teens and adolescents. Most of the children I am around, don't have a lot of toys. They spend almost all their times with video games and their cell phones.

Maybe that is why the toy industry is going down the tubes.

it's inevitable that online shopping will force physical store locations to either start focusing on the rich, move to locations with a lot more people, start selling more food items and the like or focusing online.

eventually even that won't be enough and at some point physical store locations will be a thing of the past, the biggest side-effect will be either many abandoned small towns like in europe or a revival of small time businesses to fill the gap left behind by the chain stores leaving(unlikely).

america is undergoing the biggest population shift in it's history right now all because online shopping and we are going to become more urban focused as a result as small town people move to the bigger cities.

america is about to change drastically within the next 10 years and large corporations will indeed dominate every aspect of daily life in american society more and more.

Malls are going out of business as well. This is the change to a fully digitally plugged in society, Megacorps(mostly already prevalent) as the Op mentions as well. Studies are showing younger people are forgoing warehouse stores for online warehouse deals with perks-note the closing of Sam's Club stores.

I assume people of all ages find it more comforting and of course money and time saving to just shop online, have it delivered to your home. How many go to stores, malls, then find the long trip to the location doesn't yield a specific item. Seems some stores are limiting items now days as it is. Plus, as technological items are replaced so fast, stores can't keep up with having all variations of the protect for people with older items. Where else can you find it, but online, can find most any item.

< facepalm >

PEOPLE. Pull the panties out of there, stat. This is not solely, or even largely the fault of competitors, it's a series of very bad business moves stretching back into the double digits' worth of years that fooked TRU over by way of utterly BURYING them in massive amounts of high interest debt before the ink on the deal papers was dry. Not Amazon.

They gambled on high risk, and lost badly. Their demise is no one else's fault but their own here.

a reply to: Nyiah

Not to mention this leaves a retail vacuum for some mom and pops to open up and fill the specialty toy void. I see this as a positive thing when the big chains die off. The only way I would spend more than the online price is to support a local owner.

originally posted by: JIMC5499
I'm amazed that nobody has mentioned the $15 dollar an hour minimum wage push. I work for a company that designs and manufactures point of purchase displays. I got laid off the beginning of January along with over 40 other people. Toys R Us was one of our customers. The person who mentioned people going to the stores to look and then buying from home is exactly right. An emerging trend is for companies to have showrooms where people can go and look at things and then buy them online. The thing is that these showrooms are only going to be in the big cities.

I'm really sorry to hear that you got laid off! Hope you have been able to find a good job since then!!