Can AR trigger TRU’s turnaround?
In the wake of its bankruptcy declaration, Toys “R” Us is rolling out a new augmented reality (AR) app that it hopes will help revive the chain.
The app allows customers to play different AR-based games on their handheld devices while standing in a thematically-related section of the store, as seen in a video report by USA Today. Standing in front of basketball hoops, customers can play on-screen basketball. In the doll section, they can play an on-screen nursery game. There is a virtual balloon-shooting game that appears in the Nerf section, a driving game in the remote-controlled car section, an Animal Planet-sponsored online safari near the animal action figures and a virtual fishing pool. Players collect in-app stars which can unlock other games and continue game play outside of the store. There are 13 total stations throughout each store.
TRU is testing the app in 23 locations nationwide before expanding the campaign to all stores on Oct 21.
Since the explosive popularity of Pokémon Go in summer 2016, many in the tech and retail worlds have been taking the promise of AR seriously. And while Pokémon Go proved to be a relatively brief fad, many posit that an AR “killer app” is still on the way. At this year’s Internet Retailer Conference and Exhibition in Chicago, Imran Ansani, principal manager of innovation at Walmart Labs, forecasted that AR would become a ubiquitous part of the retail experience within five years.
But whether an AR app experience (which was in the offing before Toys “R” Us’s bankruptcy announcement according to USA Today) is enough to get customers back into the chain’s stores remains to be seen.
An eleventh-hour emphasis on in-store interactivity in some ways recalls RadioShack’s attempts to revive itself. During the 2014 holiday season, RadioShack began positioning itself as a destination for DIY electronics kits and high-tech toys. But the move didn’t stop RadioShack’s tailspin. As of May, RadioShack had only 70 company-owned locations and 500-dealer owned stores.
- Toys R Us has a plan to save itself and it’s unreal – USA Today
- Pokemon Go showcases potential of augmented reality in retail – RetailWire
- Is Walmart’s innovation leader right that the AR revolution is a sure thing? – RetailWire
- Will a return to its roots keep RadioShack from short circuiting? – RetailWire
DISCUSSION QUESTIONS: Will focusing on in-store entertainment and the shopper experience using augmented reality help drive more customer traffic to Toys “R” Us’ stores? What else must Toys “R” Us do to fight its way out of bankruptcy?
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15 Comments on "Can AR trigger TRU’s turnaround?"
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Founder, CEO & Author, HeadCount Corporation
I think Toys “R” Us’ executives are living in an augmented reality if they believe this initiative will help turn their business around. Toys “R” Us is facing existential risk based on a crushing debt load and financing structure. Their stores are tired, understaffed and, based on media reports, most of their suppliers are wondering if they’ll be paid. AR and in-store entertainment initiatives are mere distractions from the reality of what this once-mega toy retailing brand is facing.
Consultant, Strategist, Tech Innovator, UX Evangelist
AR and in-store media will definitely increase dwell time in-store, but it’s not a turn-around strategy.
When the kids go shopping with parents AR experiences will add to the fun and it will set-up the “let’s go to Toys ‘R’ Us” nag in the future, but it will be hard to sustain because:
The experiment though provides good insight into the challenges of AR shopping experiences for other retailers considering similar measures.
CEO, President- American Retail Consultants
AR is a technology whose time is not here yet. This is just another way for Toys “R” Us to attract media attention. Their issues are much deeper than anything that a new technology can help. Poor purchasing decisions, logistics and inventory issues and too many stores in low-performing areas are just a few examples of the true problems this company is facing. No technology will solve these issues and only a complete bankruptcy is the viable solution for this financial mess that Toys “R” Us is in.
Managing Partner, Advanced Simulations
The problem is not the in-store experience, the problem is getting people to the store instead of Walmart or online buying. This will not bring people into the store in any meaningful numbers.
Chief Executive Officer, The TSi Company
President/CEO, The Retail Doctor
How does this fit in with their message, “I don’t wanna grow up, I’m a Toys ‘R’ Us kid,
there’s a million toys at Toys ‘R’ Us that I can play with”?
An app is not a toy. It sends the wrong message to play on a phone — essentially leaving the store to a virtual world — and disregard the toys. Put me in the “miss” category. Clean up your tired dirty stores, re-merchandise them like something other than a warehouse, train your crew how to encourage play and learning rather than stocking and be the best Toys “R” Us you can be. Anything else is a distraction.
Principal, Retail Technology Group
I have been in information systems for four decades and there is no single technology that is capable of turning around a business. Technology, apps, etc. can contribute to a turnaround but not cause it.
CEO and Founder, Cahoot
Managing Director, StoreStream Metrics, LLC
The shopping experience should include theater and entertainment. Using augmented reality (AR) as either a draw to get folks into the store or as a valued part of the in-store shopping journey is not viable or scalable. Shopping a physical store is about being physical! And having a sense of community. Isolating shoppers into a single personal experience defeats the purpose of the journey. If this is what the management at Toys “R” Us believes will help them claw their way out of bankruptcy, the future does not look promising.
Managing Director, GlobalData
It’s a Band-Aid on a broken limb.
I mean, kudos to Toys “R” Us for trying something — but the problems run deeper than this and there are so many more things that need to be fixed (read debt loads, unprofitable stores, a brand in terminal decline) before the company even has a hope of surviving.
Principal, What Brands Want, LLC
Focusing on a better in-store experience is always a worthy endeavor, but it does not always directly correlate into traffic and sales. For Toys “R” Us to be successful, they must run a tighter ship and get better on forecasting (or creating) demand for products.
Co-Founder and CMO, Seeonic, Inc.
The focus on AR will help TRU draw some customers into the stores. But it will not fix the other issues, movement of video games to phones, not matching pricing discounts resulting in excess inventory and lower sales, and decline of consumable sales at Babies “R” Us. There is little that AR will do to fix these problems or bing in replacement revenue.
TUR must get back to delivering quality service, competitive prices and keep up with technology including AR. Toys can be easily purchased from Amazon. TUR must deliver a better shopping experience including knowledgeable associates, unique toys if possible and competitive pricing.
CFO, Weisner Steel
While I wish them well, I don’t see a lot of hope. TRU’s advantages were in pricing and volume (having a lot of locations) and these have largely been lost. Turning your store into an arcade doesn’t sound like a business model (unless of course you actually ARE an arcade).
Chief Marketing Officer, Verve
Augmented and virtual reality are poised to help in-store retail; there’s no mistaking that both technologies are packed with potential. If Toys “R” Us intends to plug into AR as part of a Hail-Mary-pass strategy, however, they’ll need to go big on story, big on message, big on experience.
No matter the technology, in almost any case revenue-boosting in-store tactics still depend on the meaningfulness of the moment, on the story customers are being enticed to join, and on the anticipatory and inspirational experiences that build truly effective mobile-to-offline narratives.
If TRU’s customers don’t see the newly announced AR stations as a game-changing experience, as a near-complete re-invention of what in-store shopping can mean, then parents are likely to make choices similar to the ones that are affecting brick-and-mortar retail overall; they’ll shop online. If TRU can create an in-store AR scenario that works well, however, the company will almost certainly do something positive for its bottom line and TRU will become the talk of the industry to boot.
Senior Marketing Manager, RW3