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Business Unplugged™
This blog features Carol Roth's tough love on business and entrepreneurship, as well as insights from Carol's community of contributors.

Unsolicited Business Advice: Toys R Us (Follow-Up)

Written By: Carol Roth | No Comments
Creating a solution to the wrong problem?

Today I was surprised to read that Toys R Us is rolling out something called “R” Market shops featuring convenience-oriented food and child-care staples at more than 260 Toys R Us stores.  According to Playthings, R Market will feature “nearly 1,300 essential and discretionary products from trusted brands”, including snacks, convenience foods, milk, paper goods, cleaning supplies, baby care products, health and beauty products and similar products.

What struck me is that while the Toys R Us management and ownership has clearly realized that people are not shopping Toys R Us because they can purchase toys during one-stop shopping trips to Target or Wal-Mart, they have come up with a solution to what, in my opinion, is the wrong problem.

I can’t imagine that the issue for Toys R Us is that they are not getting a high enough average spend per customer.  The problem is that they are not getting enough traffic to the store in the first place.  People aren’t going to forgo their Target trips because they can now pick up milk at Toys R Us.  TRU needs to offer a compelling reason to go to the store in the first place and milk and cookies isn’t going to cut it.

While “R” Market may add some incremental revenues, I can’t imagine that TRU will get the potential return on their investment that they could with a bona fide traffic-draw to the store.

I say to the TRU folks: read my previous blog and reconsider a birthday party program.

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Carol Roth is a national media personality, ‘recovering’ investment banker, investor, speaker and author of the New York Times bestselling book, The Entrepreneur Equation. She is a judge on the Mark Burnett (Shark Tank, The Voice, Survivor, The Apprentice) produced technology competition series, America's Greatest Makers, airing on TBS and Host of Microsoft's Office Small Business Academy show. Previously, Carol was the host and co-producer of The Noon Show, a current events talk show on WGN Radio, one of the top stations in the country, and a contributor to CNBC, as well as a frequent guest on Fox News, CNN, Fox Business and other stations. Carol's multimedia commentary covers business and the economy, current events, politics and pop culture topics. Carol has helped her clients complete more than $2 billion in capital raising and M&A transactions. She is a Top 100 Small Business Influencer (2011-2015) and has her own action figure. Twitter: @CarolJSRoth