Toys 'R Us: The Latest Customer Success Failure
With 90's nostalgia at an all-time high you would think that Toys 'R Us would be a enjoying a slight upswing. Not so. Early this year Toys 'R Us announced 180 stores closing and they have now announced that the remaining 620 stores will be closed or sold off.
It seems that most people are blaming Amazon for the toy giant's demise. They figure, getting off the couch to go to a toy store is too much effort and too expensive. Or so the arguments I have seen go.
Amazon has certainly played a role… just not the role you think.
A little personal background will help here. My kids are 4, 7, and 10. We have made going to Toys 'R Us a family ritual. Four times a year, once leading up to Christmas and once leading up to each birthday the kids and I head to the plastic jungle on a mission - to let them explore what toys are on the market and discover what they want to include on their wish list. We've been doing this since my oldest was 4. That means 4 times a year we make a REALLY BIG DEAL out of this one store. The kids look forward to it for weeks. Obviously we are loyal to Toys 'R Us, right?
Not so fast.
This is where the Customer Success failure comes into focus. Customer Success reminds us that if you want to secure repeat business from your existing customers, you'd better understand how your customers want to do business. See, Customer Success focuses on outcomes and appropriate experiences but all too often companies view "appropriate" from their own lens. This is exactly what Toys 'R Us got wrong.
Toys 'R Us failed to realize the power of Amazon's wish list functionality and offer its customers a desirable alternative. By failing to meet this need, Toys 'R Us virtually (no pun intended) drove its customers to Amazon.
Guess what my kids and I have been using for the last 6 years to store and share those Toys 'R Us Christmas and birthday lists. Yep. You nailed it! While I walk down the aisle with my kids they hand me toy after toy so that I can scan the barcode right into an Amazon wish list for each of them. It's so easy! I can then just as easily share those lists with our extended family and it's friction-less for them to view and order from the list (not so with the other wish list apps we have tried).
I can tell you from first-hand experience that Amazon is not beating Toys 'R Us on price alone. In many cases, I've noticed that the price is actually CHEAPER at Toys 'R Us. Amazon is winning because they understand what the customer needs. They understand what the customer views as an "appropriate" experience.
I will continue to shop at Toys 'R Us until the doors close for good. Partially because I value the discovery experience and partially because I value some of their exclusive items. But my goodwill won't be enough to keep them in business. Toys 'R Us had 6 years of watching me, and other parents, scan toys off their shelves. Never once did they stop and ask what we were doing and why. They failed to stop driving experiences that were deemed "appropriate" by Toys 'R Us and to start caring about what their customers needed.