Toys R Us, the well-known toys retailer with stores in all over the world, has closed its doors, leaving an empty space which Amazon is fulfilling! But there’s more …
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This will be the first Christmas without Toys R Us, the well-known toys present everywhere in the world with its toy-shops. Its closure creates an empty space in the world of toys, which Amazon is widely and efficiently bridging through an unusual tool: the Christmas toy brochure, with QR codes, sent to millions of customers, making Amazon the big winner of XMas Sales even in toys!
Toys R Us has lost the challenge basically because of lack of innovation with consumer habits that have radically changed the rules of the game. Sales of physical toys, such as dolls and racing cars, remained unchanged for years until the children moved progressively to digital products. Apps, smartphones, consoles and other devices are available all the year, without being subject to the phenomenon of Christmas seasonality. Furthermore, Toys R Us has suffered a huge number of square meters, which were productive only 5-7 weeks a year. Plus, there was the risk that the warehouse could no longer meet the preferences of the consumers the following Christmas.
Amazon started to leverage on its wise innovative capacity of engagement and service: it sends a brochure to customers with children or with a chronology of purchases of items for children. Toys’ purchases are emotion-driven, that is why the brochure works very well, because of the storytelling of the brand and of the sharing moment among children, parents, grandparents and uncles. The brochure becomes the wish list and the letter to Santa Claus. Once again, Amazon has found a way to elevate the ordinary to extraordinary, with an engaging product designed to attract adults and children.
Toys R Us also used a Christmas brochure, that, unfortunately for them, became an informative source to drive customers to buy on Amazon, looking for better prices and convenience. Other retailers still resist and continue to sell offline (i.e., Walmart in the US), but they have the same warehouse problem that hit Toys R Us. In addition, consumers tend to think that everything is advertised on web should also be available in stores, which is often not true. In this grey zone, Amazon holds a unique competitive advantage, with an obsession with the centrality of the customer and the corresponding data. Even the recent Amazon stores to present successful products had a strong innovative impact: rather than choosing products to push buyers, the retailer is allowing the customer to speak and be a protagonist.
Amazon’s brilliant intuition stems from the capability to intercept some evolutionary consumption behaviours. For example, we all do showrooms when we gather direct experiences of products in stores and then buy online, or info-commerce, when we collect information online and then buy offline, in-store. At the same time, there is the desire of the preview, of the brand experience, as shown a few days ago, between 18 and 19 December, when many youth spent the night at frost outside the Nike Lab St18 in Milan to buy Off-White x Nike Air Force 1 “Black & Volt” at € 170, the exclusive shoe by designer Virgin Abloh. Maybe, some of them will sell those same shoes (limited edition) through the so-called re-selling that I talked about in my post about young people.
Toy R Us and Amazon are two sides of the same coin: those who did not succeed against those who succeeded in managing a radical change in the consumer’s purchasing habits. Amazon has won as it made the consumer the real winner, who gets more friendly access to more things and at ever lower prices.