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In this report, Actual Market Research dives into the history of toy retailing in North America and discusses the fabled tale of the rise and fall of the American giant Toys "R" Us across the region.
Apr, 20
2021

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In this report, Actual Market Research dives into the history of toy retailing in North America and discusses the fabled tale of the rise and fall of the American giant Toys "R" Us across the region.

 

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In the research report titled "North America Toy Market Research Report, 2027," Actual Market Research has anticipated that the market will grow at a rate of above 4% CAGR during the forecast period. The discussion in relation to the classic cases of Toys “R” Us, a toy retail store which was opened 74 years ago, cannot be missed while outlining the toy market in the North American toy market. In 1948, Charles Lazarus returned from World War 2 and opened his first store Children’s Bargain Town, in Washington, D.C. He went into business at the right positioning himself well to capitalize the “baby boom” in the country. Children’s Bargain Town specialized in baby goods and toys. In 1957, he got out of the baby furniture business and renamed his business Toys “R” Us to create the first ever big box toy store. This store inspired from the supermarket style approach and offered product lines and varieties larger than any other toy store.

The other toy stores in the region were usually small and family run and carried a very limited line of products. Toys “R” Us highly astonished and influenced the consumers of that era. Lazarus’s idea was simple. He wanted to build a supermarket for toys. When other toy stores were focusing on interiors and display, Toy “R” Us wanted to keep it simple. Just racks and racks of toys filled at one place. The lack of interior or display efforts did not seem to bother the consumers as they were mesmerised with the quantity and variety of toys. Few retail historians also recognize Toy “R” Us as the first “category killer” as it drove the negotiation of contracts to buy toys cheaper than its competitors. Also, as the television, entertainment and media reached homes and penetrated deeper, Toys “R” Us benefited significantly from the advertisements by the toy manufacturers. At the height of its power, Toys “R” Us sold 18000 different toys in 1450 locations around the globe and controlled 25 percent of the world’s toy market. However, the company faced several challenges too like the rise of e-commerce, changing toy tastes a transfer to private hands in 2005 and a leverage buyout that failed miserably. The store themselves started to become increasingly irrelevant.

But what really killed Toy “R” Us was the Big-Box model it helped create. The once original and first category killer was killed by the black box stores like the Walmart and Amazon. Toys were highly seasonal once. People use to buy them only during the winter festivities shopping. Toy “R” Us changed the consumers buying pattern significantly. It modelled the big-box retail. Toys “R” Us was one of the pioneers to structure the toy retailing in the region as the entire toy retailing industry was inspired by what Toys “R” Us set to achieve. Today about 75% of the toy annual toy sales in the North America Toy Market was is accounted for offline sales channel and although the e-commerce is a lucrative channel for toy market sales, the characteristics and nature of toys make offline retail continue play a significantly crucial role in fuelling the growth of the toy market in the region.

The company closed all its stores in the Americas and Europe and filed motion for bankruptcy in 2018. However, the company is set to comeback reinventing its business model. The company has partnered with Amazon as its online sales channel and is also said to open new stores in the region. However only time will tell if the company can still make itself relevant in a regional market that is already pretty matured than the rest of the world. Only time will tell.