Two millennial-embraced retailers, Claire’s and Toys R Us, have recently called it quits and will shutter all store fronts. Consumer intelligence platform Fuel Cycle surveyed millennial shoppers to get their reaction to these key childhood brands closing their doors. It also sought to gauge how it would affect their future purchasing habits.
Of those surveyed, 90% of millennials bought their toys from Toys R Us growing up and 70% bought accessories at Claire's. And keeping with a childhood favorite, 54% said they had made a purchase from Toys R Us in the past 6 months and 40% had made a purchase from Claire's.
And the news hit hard, as 80% of respondents said they were upset to hear of Toys R Us and Claire's going bankrupt. And 76% even said they felt like they were losing a piece of their childhood.
So where will they shop now? About 55% of millennials said they plan to now purchase their toys online, 25% will go to another toy chain retailer and 4% are headed to mom-and-pop shops.
Still, the nostalgia for a physical store is still very present, as 58% of respondents prefer to shop at a physical store and only 30% prefer make a purchase online.
"You can expect Target and Walmart to pick up the business," Mai Kang, associate VP of research operations at Fuel Cycle, told FierceRetail. "Other retailers will most likely also join the bandwagon to fill the void. Kohls, JC Penny and Party City have been expanding their toy department in anticipation of Toys R Us closing, as Toys R Us was an $11 billion retailer."
And in terms of Claire’s closing, Kang anticipates that these purchases will go to fast-fashion chains like H&M, Forever 21 and Zara, all of which have boosted their accessories sections in recent years.
Overall, the closings will have a lasting affect on the industries in general as retailers are forced to rethink their strategy or suffer the same fate.
"Toy/accessory companies like Toys R Us and Claire’s have not been able to address the shift in consumer values from abundance to ethical production and customized experience," she said. "We are all overwhelmed by choice and find a more curated/interactive experience is preferable (such as online).
Kang said that retailers will need to turn toward "retailtainment," or creating a reason for consumers to back away from their laptops and go into a physical store. That means thinking about the store's atmosphere, the functional store layout, and the emotional and psychological elements that influence decision making process.
Second, Kang pointed out that toy/accessory companies will need to find ways to stay relevant and authentic.
"Many big players have turned to brand partnerships to leverage authenticity and maintain relevant by way of partnership," she said. An example is Target working with designers and many mainstream fashion retailers running limited edition collaborations.
Finally, in order to stay alive, retailers will need to take on an omnichannel approach from brick-and-mortar to mobile browsing.
" Consumer loyalty is already decreasing with the proliferation of choice and commoditization of products in general—price wins every time. The way to succeed is for companies to have a clear vision of the added value of the company and execute it throughout their shopping experience," Kang said.