Toys R Us Case Study Pdf

Toy Guide for Differently Abled Kids

Toys "R" Us, Inc.
461 From Road

Paramus, New Jersey 07652

www.toysrus.com

 

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"A child with disabilities, no matter how you look at it, the focus ends up being on what they can't do. She watches TV, she sees the toys the other kids play with. She wants to do what other kids do."

Mother of a 9-year old daughter
with cerebral palsy

(Podmolik, 1995)

Stacks of Letters

By 1991, stacks of letters from relatives of children with disabilities had arrived, addressed directly to Charles Lazarus, founder and CEO of Toys "R" Us. Each letter voiced the frustration of trying to find toys that were usable and fun, instead of stigmatizing and disappointing.

Many had turned to buying clothes as gifts, knowing that to a child this gift can be almost as disappointing. These letters led Toys "R" Us to develop the "Toy Guide for Differently Abled Kids.

Background

Toys "R" Us, Inc. is one of the world's leading retailers of toys, children's apparel, and baby products, a $13 billion dollar business with approximately 1,600 stores licensed and franchised in 27 countries.

In 1948, 25-year-old Charles Lazarus started a baby furniture business in Washington DC, just in time to service the post-war baby boom. Lazarus listened attentively to his customers and soon realized their need for baby toys as well as furnishings. His nursery toys proved a success and as the children of his loyal customers grew older, Lazarus expanded his toy range to suit kids of all ages.

In 1957, Lazarus opened the world's first toy supermarket, a revolutionary concept for its day. The specialty discount retail concept took off, and in 1978 Toys "R"' Us became a public company.

Kids "R" Us, which opened its doors in 1983, sells K.R.U. private label brands along with well-known brands such as Osh Kosh B'GoshR.

Babies "R" Us opened in May 1996, offering everything new or prospective parents need all under one roof, including apparel, furniture, car seats, bedding, and strollers. Guests can shop online at www.babiesrus.com or one of 188 stores.

Founded in 1998, Toysrus.com gained momentum when it formed an alliance with Amazon.com in 2000. In 2001, www.babiesrus.com and www.imaginarium.com were launched.

Responding to Families of Children with Disabilities

"Families and friends are sick of spending money on toys kids can't use. The Toy Guide for Differently-Abled Kids catalog is used as a guide to the right toys to buy, so kids are stimulated, not frustrated."

Diana Nielander,
National Lekotek Center

Moved by letters from families of children with disabilities, Toys "R" Us CEO Charles Lazarus asked his Product Development staff to look into what could be done. Tom DeLuca, who already had 10 years of experience at Toys "R" Us as both in Product Development and as a buyer, recalls how the program got started in 1991:

"We realized that this was a sensitive issue, and we knew we didn't have any internal experts on disabilities. We wanted to respond in the right way, without embarrassing ourselves or our customers."

DeLuca had a professional interest in child safety and a personal resonance with children with disabilities. His wife is also a school teacher and Director of Special Services for her school district.

DeLuca spent several months contacting various organizations for expert help. Diana Nielander of the National Lekotek Center, a non-profit center that promotes play for children with disabilities, was among the first.

The National Lekotek Center had already established a reputation for evaluating toys for children with disabilities at its Evanston, IL facilities. The Center also assists toy designers and manufacturersand maintains a toy lending library, emphasizing mainstream toys that help to include kids with disabilities in play with family and peers not "special" toys.

"We thought at first about whether to begin carrying assistive technologies in our stores, or creating a "special" section for toys for kids with disabilities. But we knew we didn't want to do that. Parents want their child to be treated like every other child."

Tom DeLuca

After a few months of testing, it came as no surprise to DeLuca that many of Toys "R" Us' popular products could be used by kids with disabilities. He proposed to Toys "R" Us management that the Lekotek Center help them develop a guide for parents to select toys appropriate to their own children:

"There was absolutely no resistance to the idea. It wasn't a business decision, but an emotional one. It was considered a community service."

Tom DeLuca

The "Toy Guide for Differently Abled Kids"

In 1993, the National Lekotek Center partnered with Toys "R" Us to publish the first "Toy Guide for Differently Abled Kid." Distribution was handled by the National Parent Network on Disabilities.

Lekotek drafted the copy that described the features of each toy, based on the assessment of "trained play experts" who observed children with disabilities playing with the toys and noted the skill levels required in nine areas:

            Gross Motor
            Fine Motor
            Creativity
            Auditory
            Language
            Self-Esteem
            Social Skills
            Tactile
            Thinking

The Guide describes the features of each toy in words, as well as with symbols showing how the toy promotes development in one or more of the nine skill areas:

 

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Through the years, the cover of the Guide has featured such celebrities as Chris Burke, Stephen Hawking, Maria Shriver, Mattie J.T. Stepanek, and 1995 Miss America, Heather Whitestone.

Now in its tenth year of publication, the Guide reaches over 1 million families each year through in-store distribution and direct mail by the National Parent Network on Disabilities.

Immeasurable Success

Lekotek Center's Diana Nielander notes that some toy companies are resistant to incurring the additional cost in design and production that might come from including consideration for children with disabilities, thinking that the market is too small. Since the first Guide was published in 1993, numerous news articles have featured the Toys "R" Us Toy Guide for Differently Abled Kids, citing the considerable size and growth of the market for toys for children with disabilities:

"The market for toys for handicapped children is as much as $2 billion a year, according to the Toy Manufacturers of America, and could grow faster than the $20.7 billion toy market as a whole."

 New York Times, 12/25/97

The American Academy of Pediatrics estimates that at least six million children have some form of disability, ranging from learning disorders to severe mental and physical handicaps. The number has increased by about 20 percent in the last decade as survival rates have risen for premature babies and for infants with ailments that were once usually fatal.

Through compliance with the Americans with Disabilities Act, Toys "R" Us stores are accessible to people with disabilities. In 2003, 22 suppliers of adapted toys for kids with disabilities are available through the internet.

Now Toys "R" Us' Vice President of Imports, Product Development, and Safety Assurance, Tom DeLuca puts these numbers into perspective:

"We can't measure the benefits of this program, and we don't try - we know it is helping our customers. We've gotten thousands and thousands of letters [from parents of kids with disabilities] about this program. They tell their relatives and friends about Toys "R" Us."

Impact on the Toy Industry

Toys "R" Us has considerable leverage on the toy industry; only Wal Mart and Target are significant competitors. Besides its obvious impact on customers, the long-term relationship between Toys "R" Us and Lekotek has profoundly affected toy manufacturers since 1993.

"When 'Share a Smile Becky' reached shelves in the spring of 1997, the $25 doll sold out in two weeks. Since then Mattel has sold more than 100,000 of the $25 dolls. 'Little Tikes' had a run on its patio doll houses after it introduced advertisements in the summer of 1997 featuring a handicapped child to show that the child-sized houses had been modified to make them wheelchair-accessible. And in the five years since the toy makers' group began producing a guide to toys for blind children, distribution grew from 20,000 to 80,000."

New York Times, 12/25/97

In 1999, Mattel released the "Cabbage Patch Kids PlayTime Friend a doll with mobility limitations. In 2000, Fisher Pricedeveloped a product called, "Aiden Assist," a rescue character in a wheelchair which would be an addition to their very successful line of Rescue HerosT. As Diana Nielander points out:

Lekotek Center worked with both Mattel and Fisher Price in the development and launch of these products,"

Toward the Next Decade

2003 marks the tenth anniversary of the Toy Guide for Differently-Abled Kids. The Lekotek Center continues to supportthe Toys "R" Us teamin Product Development, Advertising, and Communications. Lekotek evaluates approximately 200 toys annually, choosing only those with exceptional features, for inclusion in the Guide.

In turn, Toys "R" Us management and staff support for the program continues to be strong. The Toy Guide for Differently-Abled Kids should continue to help children of all abilities play together for many years to come.

References

Beeler, A. "Toys R'Us Woos Kids with Disabilities". Advertising Age. 11/8/99.

Canedy, D. "More Toys are Reflecting Disabled Children's Needs". The New York Times. p. A1, 12/25/97.

Kendrick, D. "Toy Makers Tuning Into Special Needs". Enquirer. Battle Creek, MI. 12/12/01.

Nielander, D. "Enabling Play". Playthings. January, 2002. pp. 36-38.

Podmolik, M.E. "New Catalog Aims at Special Kids". Chicago Sun-Times. 12/15/95

The New York Times. "A Barbie Friend, Disabled, Has Wheelchair". The New York Times. 5/22/97.

June 2003

Lekotek's Ten Tips

Each year, the Toy Guide for Differently Abled Kids includes the National Lekotek Center's "Top Ten Tips for Choosing Toys":

1. Multisensory appeal - Does the toy respond with lights, sounds or movement to engage the child? Are there contrasting colors? Does it have a scent? Is there texture?
2. Method of activation - will the toy provide a challenge without frustration? What is the force required to activate? What are the number and complexity of steps required to activate?
3. Where toy will be used - Will the toy be easy to store? Is there space in the home? Can the toy be used in a variety of positions such as side-lying or on a wheelchair tray?
4. Opportunities for success -- Can play be open-ended with no definite right or wrong way? Is it adaptable to the child's individual style, ability and pace?
5. Current popularity -- Is it a toy that will help the child with disabilities feel like "any other kid'? Does it tie in with other activities like books and art sets that promote other forms of play?
6. Self-expression - Does the toy allow for creativity, uniqueness, and choice-making? Will it give the child experience with a variety of media?
7. Adjustability - Does it have adjustable height, sound volume, speed, level of difficulty?
8. Child's individual characteristics -- Does the toy provide activities that reflect both developmental and chronological ages? Does it reflect the child's interests and age?
9. Safety and durability -- Consider the child's size and strength. Does the toy have moisture resistance? Is the toy and its parts sized appropriately? Can it be washed and cleaned??
10. Potential for interaction - Will the child be an active participant during use? Will the toy encourage social engagement with others?

SWOT Analysis Toys "R" Us

Would you like a lesson on SWOT analysis?

Strengths.

  • Toys "R" Us has in excess of 1500 superstores in the United States and Worldwide. It also owns the baby brand, Babies R Us which adds another 200 + stores. Toys "R" Us also markets successfully on the Web (in collaboration with Amazon.com). It has a huge distribution network that benefits from advanced logistical systems. Having so much shelf space means that the company has a strong bargaining position when it comes to buying prices from manufacturers. It turned over more than $11 billion in 2005.

Threats.

  • There is strong competitive rivalry in the toy market, not only form Wal-Mart, but also from KB Toys and Target. The toy brand is often not associated with the retailer. So if a particular kid’s toy has grabbed the imagination and the spending power of its target consumer, any retail outlet is as good as another. Differentiation is difficult, and toy retailers often have to compete on price, range or availability.
  • Let’s face it today China and similar low cost manufacturing paradises are where toys are made. Low manufacturing costs are important if margins are to be retained. The problem, and potential weakness, is that countries and trading communities tend to impose quotas and tariffs in order to protect local manufacturing. All countries do it. However, Toy R Us could potentially be left without the toys people want to buy if embargoes are implemented on countries such as China.

In 1948, at the young age of 25, Charles Lazarus began a business totally dedicated to kids and their needs just in time for the post-war baby boom era. He had no idea that his first baby furniture store in Washington D.C., would evolve into an $11 billion dollar business with approximately 1,500 stores worldwide! Read more…

Disclaimer:
This case study has been compiled from information freely available from public sources. It is merely intended to be used for educational purposes only.

  • The company sells many different product ranges. There are benefits and disadvantages to this. However, a key strength is that the company has a diversified portfolio of products, which means that while some ranges are underperforming, others are out performing. As long as technology allows them to spot successes and then to focus upon them, they have a competitive strength.

Weaknesses.

  • These days, Toys “R” Us has no single and sustainable competitive advantage, other than brand. In the US, its traditional stronghold, the company has lost its number one positions as toy retailer to Wal-Mart. Being large may not be enough, when customers can go to another large retailer and buy the same and similar goods, sometimes getting a better deal.
  • As with all retailers in Western society, Toys “R” Us is heavily dependent upon successful sales during the final quarter of the year. They need to make profit from Christmas. Retail is notoriously seasonal and Toys “R” Us is no different to other retailers. In fact it could be argued that toys are a key Christmas present product, so are even more likely to be dependent upon seasonal sales.

Opportunities.

  • There are opportunities for joint ventures and strategic alliances. Toys "R" Us works closely with Amazon.com and its baby products category. This not only plays to the strengths of both companies, but also provides opportunities. Amazon is strong at the online part of the business, creating the web site, warehousing products and delivering them to customers. Toys "R" Us will use its buying power, but ultimately carries the inventory risk (i.e. if it doesn’t sell, its money is tied up in physical stock).
  • Toys "R" Us is a good neighbour. For example, in 2005 it went out of its way to help the Louisiana victims of hurricane Katrina. Toys "R" Us donated six trucks full of toys and baby supplies including diapers, wipes, and formula, as well as batteries and water to multiple locations that were housing evacuees. Babies "R" Us has also donated over 17 pallets of baby and children’s clothing to the national charity Kids In Distressed Situations (KIDS). Such associations will help to sustain its brand with key consumers.
  • As with many of the brands considered by MarektingTeacher.com’s FREE SWOT analyses, the International market is very important to Toys "R" Us. The citizens of emerging nations such as China and India are getting wealthier and better educated. Consumers have more disposable income and leisure time, and both of these could increase over coming years. The types of goods and services retailed by the company could be marketed more aggressively overseas. Toys "R" Us could look out for strategic partners, or indeed go it alone.

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Tim Friesner

Marketing Teacher designs and delivers online marketing courses, training and resources for marketing learners, teachers and professionals. View all posts by Tim Friesner

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