The game’s up: What long-established brands can learn from Toys R Us – and the innovative fast-growth companies snapping at their heels Christi Tronetti, Marketing Director at creative agency isobel, says that many established ‘legacy’ brands continue to bury their heads in the sand.
The news that Toys R Us is shutting down its US stores and is set to do the same with its UK outlets by the end of April may have come as a shock to those who still believe that size, might and longevity hold sway in today’s market.
Many established ‘legacy’ brands continue to bury their heads in the sand and pretend that the world is spinning at the same speed as ever and consumers shopping habits haven’t changed. It’s not, and they have.
With young pretenders lining up with innovative offerings that respond to the needs of the modern consumer, established behemoths ignore learnings from this latest course of events at their peril. It’s time to buckle down and focus on learning and responding, not just carrying on as before.
In a new report by creative agency isobel (Getting Your Mojo Back – Ten Lessons from Fast-growth Companies), 250 marketers from long-established companies were questioned to see how they measure up against the new kids on the block. At the same time, execs at 12 of the fastest-growth companies in the UK were asked what they believed were the keys to success. The results make for interesting reading.
More than 20 per cent of the legacy execs said they thought their products were ‘below par’ – cause for concern in an era when social media reviews leave no place to hide. Around a fifth also said their companies didn’t make responding to customer needs a priority.
While the chiefs at Toys R Us weren’t among those questioned, the report throws up some interesting issues. Number one of which must be: “If you don’t think your offering is up to much, why should your customers?”
Toys R Us has been roundly accused of failing to innovate and of ignoring new consumer behaviours, as shoppers shun out-of-town sheds in favour of city-centre outlets and online retail. Commentators have also been questioning why the mega toy giant didn’t go for a more experiential, hands-on approach to encourage families to take the trip to the store.
Whatever the real reasons behind the company’s demise (still the subject of much speculation), long-established brands could learn a thing or two by starting to think more like young, fast-growth outfits.
Take Tech Will Save Us (TWSU), an innovative London-based toy company founded in 2012 which now has a £1.5 million turnover and an army of young fans across nearly 100 countries.
Head of marketing Tom Baker says TWSU realised that while technology was transforming the world around us, toys weren’t keeping up. “So much of what’s available to youngsters was blue, pink and stereotyped and didn’t allow kids to customise, innovate or create.” TWSU spotted a need for toys that were more relevant to today’s world. Says Baker: “Most toys don’t invite hacking or creation, and we know that in the workplace, that’s not a reality – you have to problem solve, be creative and driven by change.”
TWSU is in no doubt that its mission is to empower kids. (“If you don’t want to walk the dog, create a robot to do the job for you!”)
The new report by isobel, however, reveals that almost a quarter of marketers from established brands lack a clear purpose, and a third say that ‘direction’ (or lack thereof) never comes up in team discussions.
For established brands to get their mojo back and avoid following Toys R Us’ failure, they need to step back, redefine their mission and think about what the customer wants. As the report reveals, there are many more brands out there that could learn from the burgeoning challengers who are shaking up how brands think, act and communicate to customers – reigniting brand passion on the way.