It at least sounds plausible to me that you could make a toy store a "destination" business if you did something to differentiate it from Amazon: kids parties, video game tournaments, something. You'd have to transform what it means to be a "toy store". Of course, that takes a lot of money, and with Toys-R-Us' debt load there was no way they could have afforded that.
I don't know if it scales up to big box stores, but this– plus adding food/café– is what a lot of game and hobby stores have been doing, and it seems to be working. There at least five stores like this in the Seattle area (2 of Café Mox, Meeples, etc.) and they seem to do good business.
Of more interest is will this scale up culturally. Going in this direction at scale means monetizing physical socialization. I've observed this while touring Tokyo, where the society and culture has accepted eye watering residential real estate prices with accompanying micro-sized residences by American standards, in exchange for scads of commercially-run spaces used for social activities. Socialization there seems to take place outside of people's homes, and in restaurants, bars, and other commercial venues. These venues seem predominantly mom and pop sized and run in the non-tourist areas, small, and affordable.
I have no idea if that will translate into American urban culture; I can see cases made for Millennials and post-Millennials embracing this model and rejecting it. I don't see it happening in the suburbs, much less exurbs. For this business model to work at scale, it would have to be embraced ubiquitously, but I'm not convinced there is a lot of space left to scale into after Starbucks got there first in so many locations.
