Toys R Us CEO Says It’s Actually Good Business to Open a Bricks & Mortar Store *Now*

It was a timely grand opening as Toys R Us’ new permanent Guelph location formally opened its doors to holiday shoppers on Friday. Flying in the face of dead malls, online shopping trends, and the retail apocalypse, the latest addition to Stone Road Mall had a good old fashioned ribbon cutting despite all those issues, and in addition to the pandemic. It’s not nostalgia says Toys R Us’ CEO, it’s actually good business.

“[Guelph] is a vibrant town, a growing market with lots of young families and the shopping experience of Toys R Us and Babies R Us is obviously very different than other retailers,” Vic Bertrand told Guelph Politico before the grand opening. “Even with ecommerce and all these other things, the majority of our businesses is still store based, and I think it’ll continue that way for some time.”

The new Guelph location is Toys R Us’ 82nd location in Canada. The 17,000 square foot space is in the newly renovated eastern end of Stone Mall where Sears once stood. Sears had been a major anchor tenant since Stone Road Mall’s first expansion in 1978, and its closure forced a lot of existential questions about the mall’s fate.

And then there was Toys R Us itself. In that same year, 2018, the New Jersey-based chain shuttered all their stores in the United States and Europe, but the brand was saved in Canada by testing the waters in different areas with pop-up shops called “Geoffrey’s Toy Box”, named after Toys R Us’ anthropomorphic giraffe mascot. One of these pop-ups opened in Stone Road Mall in 2019 above the food court, and its success lead to the establishment of more permanent quarters.

“It was a perfect test and it gave us the confidence to make these investments,” Bertrand said. “We’ve done a soft opening here more than a week ago, and sales are way beyond expectations. We hope that momentum continues.”

But can that momentum continue? According to Cansumer, there have been 39 retail chains in Canada that have either closed locations, or folded entirely, so far in 2020. A survey done by the Retail Council of Canada said that 42 per cent of Canadians will be doing their holiday shopping online this year, which is an increase of 14 per cent over last year. In Ontario, that number is 46 per cent, which means that nearly half of all Ontarians are hoping to avoid the mall this Christmas, so how did we get here again?

“We’ve grown dramatically in ecommerce as well, and it’ll become a more significant piece of the shopping experience, but the store-based shopping experience isn’t going away either,” said Bertrand. “I think it’s important for us to be able to have these expressions of our brand in markets where there’s lots of young families.”

Mayor Cam Guthrie, who was on hand to help open the new store, said that growth is the reason that Stone Road Mall is thriving as other indoor shopping centres are sinking.

“With the projected growth moving us to well over 200,000 people in 40 years, I think from a business perspective Toys R Us know that this is a good place to put your stake in the ground now because that added growth is only going to continue to help promote business,” Guthrie said.

But growth alone doesn’t explain the fact that Stone Road Mall is shirking overarching retail trends; after all, there are a lot of places in Canada that are still growing. And while the pandemic has punched a hole in the bottom line of many different retailers, the ones that are succeeding fit in one of two categories, they’re either general merchandise shops like Walmart, or their businesses focused on improving homelife.

According to Bertrand, more time at home is one of the drivers of his business.

“Our kids are home more, there are no playdates and less outings for the kids, so there’s there’s a lot more play at home, and that’s driving a lot of growth in toys,” he said. “The demand profile has been completely challenged because family togetherness is now such a critical element. That means puzzle sales are up, board game sales are up, and construction toy and creative craft sales are up.”

If Bertrand sounds incredibly upbeat given the challenges, he is. Looking ahead to the holidays, he says the issue is not getting people to spend, but managing how they spend. There will be less focus on big sales like Black Friday, and more initiatives to bring people into the store at a more consistent level.

“Tuesdays and Wednesdays are now some of our biggest days of the week, and that’s a sign that our customers are trying to avoid traffic or busy shopping times,” Bertrand said.

The need to adapt and innovate on the fly is the big lesson that Bertrand has taken from his experience as a CEO in this pandemic. “Throw out the playbook that you had, challenge every single assumption, try and understand insights from the consumer as much as possible, and be quick to adjust,” he advises.

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