Growing (Up) with Toys “R” Us

What twenty years of buying playthings has taught Melanie Teed-Murch, and how she, now the companies' Canadian president, keeps Toys “R” Us and Babies “R” Us on top

What did the industry look like when you started at Toys “R” Us twenty years ago?
There were more retailers and vendors. Over the years, the supplier base has downsized through acquisitions that have created powerful multinational companies. There are fewer players today, and competition is fierce.

What impact has mobilization had?
We now have multiple, as well as faster, means of consuming entertainment, such as movies, streaming platforms like Netflix, and bite-sized content. Everything is moving faster, and content is consumed so differently. When I started, products weren’t as connected. We had a toy that was tied to a sixteen-week campaign leading to Christmas, and that was it. Most of the beloved characters came from books and TV shows that everyone knew. Today, there is so much out there and so many ways to connect with characters that are at the core of the toy industry.

We’re no longer just product drivers; we’re content evaluators.

Does that make your job harder?
In some ways it does, sure. Today, those in the toy industry have to be trend enthusiasts and trend activists. We have to be an authority in the baby and toy world. We’re no longer just taking the top shows from entertainment companies and making toys based on those shows. We have to balance the popularity of characters from web searches, and Netflix, and studio partners. We have to know what these partners will release in three or five years, and then we go one level deeper to examine social and digital influences. We’re no longer just product drivers; we’re content evaluators.

TOYS “R” US
BY THE NUMBERS

866

Stores in the United States, Puerto Rico, and Guam

750+

International stores

245+

Licensed stores in thirty-seven countries and jurisdictions

82

Stores across Canada

8%

The Canadian toy industry grew to $1.8 billion in 2015

$1.7M

Raised by Toys “R” Us Canada customers and team members in the 2015 annual Star Campaign benefiting longtime charitable partner, Starlight Children’s Foundation Canada

12
years
old

Age of Toys “R” Us Canada’s Chief Play Officer Émile Burbidge, from Saint-Bruno, Québec, who is the expert on the hottest new toys, games, and gadgets and provides his recommendations to parents and gift givers

Is there a formula for a home run in today’s toy industry?
I’m not sure there is a formula anymore. It depends on the point in time and filling a certain need in the market.

Can you give an example of how this works?
Parents are starved for time now. Our industry has to understand the motivation of the consumer. Everyone in education is talking about STEM and STEAM fields. Parents are busy, but they want to spend quality time with their kids. Parents also want their kids to learn while playing. So those toys that include STEM and STEAM aspects are big right now. What we see is content meets digital meets the right time meets an amazing product at the right value. It’s not about having the cool toy that does something nobody has ever seen before—it’s about fitting a need and giving a benefit to the users.

Is there a recent success at Toys “R” Us that you’ve seen illustrate this?
I think of our eighteen-inch Journey Girls dolls. We saw that dolls in that size hadn’t been developed in our market, so we created this line to speak to girls that are entering the tween phase, where we sometimes start to lose them. They are a big hit.

Why do you think that is?
It’s a worldwide program, and the dolls’ stories travel the world and bring this premise of exploration and ideation. The Journey Girls dolls have helped us stay relevant and entice consumers to visit us online and in our stores.

That brings up an interesting point. Does it matter to you if someone shops online or in store?
Our mission is to fulfill our customers’ shopping needs wherever and whenever they choose. In order to do that, we need to present a flawless in-store and online experience. Our loyal consumers actually shop all channels—in different ways and at different times. On the one hand, it’s an amazing experience to walk the aisles with your child, yet it’s convenient to shop online late at night when you need to order a gift. We want to fulfill the need of the customer each and every time.

But has e-commerce changed how you approach what you do?
It’s pushed us to be a better retailer because we have to think about business differently. We’ve had to rethink logistics, supply chain, operations, and forecasting.

But that’s also an opportunity, right?
Exactly. We fulfill orders from our stores, and we’re leveraging our size to bring convenience everywhere.

Is that difficult in Canada?
Sometimes it is because of size relative to population. We have bilingual laws and other Canadian legislation. It’s expensive to ship a crib way up north, for example, but we’ve leveraged our partners, and we’re using our global internal expertise to help us navigate these challenges.

How is the industry doing today? Are kids moving away from toys?
Definitely not. It’s a fantastic time to be in this business. The Canadian toy industry grew 8 percent in 2015 to $1.8 billion even though consumer electronics and video games were down. As busy families move on from one activity to the next, there are actually parents pushing to limit screen time, and that helps us. And people are using toys in different ways. They want free-form building, robotics, and innovation. That gives us new opportunities to meet the consumer in new ways.

ALL AGES

1948
Charles Lazarus opens a baby furniture store named Children’s Bargain Town. To expand his business and satisfy customers, he introduces infant products and toys for older children.

1957
Lazarus opens his second store and settles on the name Toys “R” Us, with a backwards “R”

1984
Toys “R” Us arrives in Canada, with its first store opening in Brampton, Ontario

1996
Babies “R” Us is born

2011
FAO Schwarz, Toys “R” Us subsidiary, celebrates its 150th anniversary

So what else are toy buyers looking for today?
Toys that spark and challenge creativity—like DIY, robotics and interactive play, science kits, and anything that involves a favourite character. We’re seeing a move back to nostalgic and wholesome toys that give families quality time together. There can’t be anything more basic in my business than a board game, and business is booming.

What is the next big thing in retail?
I think we’ll see different size and formats of stores. We’re not going to have these huge, sixty-thousand-square-foot stores everywhere. We have to be urban and adaptive to change. We’re already shipping from stores and providing in-store pick up, but technology continues to change everything. We’re playing with the digital in-store experience so customers can shop with their fingertips, check out, and have their goods delivered to the front of the store when they leave.

It sounds like there are a lot of elements to enjoy about your job. But have you found that there’s anything you would change?
I’m passionate about the toy and baby business, but I don’t like seeing it treated as such a commodity in mass retail.

One last question: What do you tell other women who aspire to leadership positions?
I want them to know that it’s possible to have work and family. It doesn’t have to be a choice between the two—you can have both. Yes, it’s hard, but it’s doable. I might do a global conference call while I make lunches at seven in the morning, but that’s okay because I can be a good executive, a good mom, and a good wife all at the same time. Thankfully, my husband is wonderfully supportive. I know that I’ve had a successful day if I’ve had a good day at work and a great day at home.