Lessons Showrooms Can Learn from the Demise of Toys R Us

Your business is not a toy store, but the closure of all of the 735 U.S. big box Toys R Us retail stores, which will in turn eliminate 33,000 American jobs, is another serious blow to the brick-and-mortar landscape.  And yes, the lessons that felled Toys R Us are equally applicable to boutique decorative plumbing and hardware showrooms.  DPHA 2018 Conference Speaker Bob Phibbs, aka the Retail Doctor, had an interesting blog post explaining the lessons that every DPHA member can learn from the demise of Toys R Us. 

 

Phibbs points out that many people will erroneously claim Amazon was the reason for the Toys R Us, but that's not really the reason.  Toys R Us became the most dominant toy store in North America because founder Charles Lazarus capitalized on a demographic shift he foresaw among Baby Boomers who wanted to give their children more than what they received themselves as children.  Lazarus modeled his retail operations after grocery stores, stocking shelves from floor to ceiling with an endless array of offerings.  If you entered Toys R Us you did not have to go anywhere else.  Any toy you could imagine was within your reach.  The go-to-market strategy equated choice as the vehicle to generate easy sales.

 

Toys R Us became a category king before most Americans had heard of Walmart and before Amazon or the Internet was created.  With the advent of the Internet though, the brick-and-mortar retail landscape started to change.  Products became secondary to the experience.  Go to a boutique toy store today and you will find employees and kids playing with the merchandise.  They get a chance to experience it firsthand, ala Apple stores.   Few, if any kids, played with toys at Toys R Us.

 

The parallels between Toys R Us and decorative plumbing and hardware showrooms are eerily similar.  Many showrooms became first-to-market destinations, pioneering products and displaying a vast array of merchandise that "wowed" customers who had little idea that the products on display actually existed.  More meant better based on the premise if you display as much as you can, consumers will believe that you have everything and then don't need to go to elsewhere to find what they want and need.  Similar to Toys R Us, DPH showrooms operated under the premise that choice equated to easy sales.  To paraphrase Bob Dylan, "The Times Have Been Changed."

 

Toys R Us teaches us the valuable lesson that product does not equate to easy sales or profitability.  Consumers are overwhelmed by choices in all phases of their life.  Consider how many emails they receive, the number of channels they have with their cable television subscription, the number of social media posts, texts, snaps, etc. that they encounter daily.  We are inundated with content.  Look around your showroom.  How many faucets look the same?  Can your staff tell the difference between cabinet knobs offered by different manufacturers? If they can't, why would you expect clients to tell or appreciate the difference?  Is it time to rethink displays and merchandising?  Is more better or is better better?  Your vignettes and displays need to reduce sensory overload, not contribute to it.

 

A wall of faucets may not be the best use of space or strategy.  Your customers need to be able to visualize how a faucet, vanity, sink, lighting, tub, and/or water closet would be like to use in their home.  When you look at a wall of 200 faucets, do you expect customers to pick one out and say, "That's the one I know I want."

 

Products no longer sell themselves.  They need to have a story and their story needs to be told by a sales professional passionate about improving their customers' lives.  There's a reason why someone will make the effort to visit a showroom.  They want confirmation that their selections are the best solution for their home.  They need to feel that the guidance received was delivered from someone who was looking out for their best interests as opposed to recommending a product because the sales professional received a spiff.  

 

Does your showroom fundamentally look the way it did when you opened it with the only difference being products on display?  The inability or reluctance to update the retail environment is another contributing factor to Toys R Us' downfall.  Phibbs argues that retailers need to remodel their stores every 3-5 years if they expect clients to return.

 

Toys R Us positioned itself as a discounter.  When you use price as a main attraction, you race to the bottom.  Toys R Us finally hit the bottom.

 

Target and other retailers ate Toys R Us' lunch by cherry picking the best-selling and trending products and then displaying them more effectively, thereby eliminating the need to make separate trips to the toy store.  Every decorative plumbing and hardware showroom should monitor what Restoration Hardware is doing.  Visit an RH store and closely examine the plumbing, hardware, lighting and accessory displays.  Ask yourself, could Restoration Hardware do to your showroom what Target and others did to Toys R Us, eliminate the need for customers to make a special trip?

 

Debt was another reason for Toys R Us' collapse.  It was unsustainable and that teaches another lesson.

 

Average does not cut it anymore.  Products for products' sake are not the keys to success.  More is not better.  The ability to tell compelling stories, ask the right questions, listen intently to responses and establish a trusting line of communication will help ensure continued prosperity.  What are you going to do differently tomorrow than you did today?