Tuesday, December 26, 2006

When diversity is a bad thing

No, I'm not agreeing with Prop 2 that passed in Michigan this past election, I'm talking about businesses that try to be everything to everyone. Specifically, I'm talking about Toys "R" Us. I had to go there because they were the exclusive supplier of the Thomas the Tank Engine Aqua Doodle, and that's what my niece wanted for Christmas. (note to self: next year go back to ordering everything online a month in advance)

Remember back in the day? Everyone wanted to be a Toys "R" Us Kid. Hell, you know the jingle -- "From bikes to trains to video games, it's the biggest toy store there is".



And it was true. But that was then, and this is now. The store is a shell of what it used to be. The entrance houses clearance items (please explain that to me), and heading counter clockwise around the perimeter of the store it's clothes at 3 o'clock, large items like strollers at noon. The aforementioned good eat up about a third of the store. When all is said and done, their non-toy inventory accounts for about 35% of the store.

So what's left? For starters, not the Thomas the Tank Engine Aqua Doodle. In fact, out of the 12 or so things on my list, they had one - a Lego Bionicle. However, compared to the other stores, it looked as though Toys "R" Us got the bottom of the barrel when it came to packaging on this item. The other stores had cool grey/black carrying cases that displayed the flashing swords and the colored balls prominently. The Toys "R" Us package was a plain, clear package with a sticker covering the contents. If Toys "R" Us was last on my list I would have passed on the package, but in a holiday frenzy I grabbed one.

I know the history of the company: their union issues in Europe, the screw job from Amazon and the success of their Babies "R" Us stores.

Regardless of those things, they made a fundamental mistake - much like the Cincinnati Bengals game plan against the Indianapolis Colts two weeks ago, you need to avoid the temptation of rushing on every down and dance with who brung ya'. In fact, bring her sisters, her mom, her aunt and her cousins. The Bengals lost because they abandoned their potent aerial attack for a ground game - and Toys "R" Us caved in to pressure from the success of Wal-Mart, Target and Meijer.

Look at what makes niche stores with multiple retail chains successful - depth AND breadth within one category. It's not just about having four aisles of toys AND having groceries AND having cheap clothes. Look at Starbucks. Coffee. That's their bread and butter. Sure, they sell scones - but it hasn't changed their core business, which is, you guessed it - coffee.

So what it's really about is focus. "What makes us successful?" is what the board at Toys "R" Us should've asked. Was it in clothes? Nope. Well, maybe a Geoffrey t-shirt that said "I'm a Toys 'R' Us Kid!", but that's a crowded marketplace today. When the man or woman stood up and said "We need to get leaner in toys and add clothes" someone should've played the commercial and pointed them down the hall to the Babies "R" Us meeting.

Gap Brands, Gymboree, Target, Wal-Mart, you name it - they all serve an audience in terms of price. What does Toys "R" Us stand for here? What do you think of when you hear "Toys 'R' Us"? Clothes?

Back in the day you went to Toys "R" Us first, then the Kmarts, Sears, et al of the world second. Could Babies "R" Us still exist? Absolutely. I'm not saying they shouldn't recognize other opportunities in the market and capitalize where their size can be used to aide those businesses - distribution, volume, price, etc.

What I'm suggesting is that instead of shrinking their inventory they should have been ramping up those efforts to make their competitors irrelevant. The others stores toy departments should be the "last resort" in consumers minds.

Oh, if they'd only had listened to their own song: More games, more toys (Oh boy!).

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