Did A Weak Digital Presence Kill Toys R Us?
“There’s a magical place, we’re on our way there. With toys in their millions, all under one roof.”
Sure, it may have been a good strategy at the time Toys R Us released its iconic Christmas advert in 1989. But in 2018, as hundreds of stores sit with shelves stocked full of toys and isles empty of customers, the words of its cheerful jingle are more of a mocking reminder of where it all went wrong.
After filing for Chapter 11 bankruptcy protection in the US last September, the UK company has now The news broke on the same day as electronics retailer Maplin met a similar fate, also failing to attract buyers. Together, it means that now a slew of UK retail giants, including Prezzo, Carpet Right, and New Look, may be disappearing from our streets and lives for good.
In most of these cases, failure could have been avoided by biting the bullet earlier on and switching their main focus to e-commerce. In the case of Toys R Us, the company effectively signed its own death warrant some 18 years ago when it made a 10-year deal with now rivals Amazon, to sell online exclusively through its platform. When the deal fell through in 2006, Toys R Us was left stranded with and the near-impossible task of catching up.
But as the discount retailer Target proved after launching in 2011, which is now growing 30 percent each quarter, there was always a chance—and maybe even still is today. The fact is, even the biggest of the big get it wrong it sometimes, especially when it comes to building and maintaining
So, what could have Toys R Us done differently to avoid such a disastrous fate?
Toys Aren’t Us?
With its vast product offerings, low costs, and quick home delivery, Amazon is the hands down number one seller of toys and baby products online. If Toys R Us, a company specialising in toys and baby products, under its Babies R Us brand, was to compete, it would have needed to hone down on one market and dominate it.
This is where the Babies R Us brand may be key to the company’s future. Whereas in the toy category the customer’s priority is to find branded products at the lowest prices, in the baby product vertical, customers are more inclined to look for outlets that can offer personalised advice and with whom they can build a longer-term relationship.
Not only that but buying baby products online makes much more sense than on the high-street as it saves the customer hassle like having to take the kids to the store and cart big boxes of nappies to the car. Toys R Us could have capitalised on its Babies R Us brand by recognising this opportunity for e-commerce and using demographic data and insights to tailor its offering further. For instance, are households without children. With this knowledge, Toys R Us could design marketing campaigns that target grandparents, relatives, and friends of families with children, particularly around holidays and events.
It’s all about the experience
With giddy staff demonstrating new arrivals and car sets freed from their boxes for kids to play with, Toys R Us stores used to offer a great day out. But with prices that were no match for online retailers, it simply became a place where customers would go, if at all, to check out toys before buying them online.
Toys are becoming more technological, and as you’d expect, the browsing experience is also becoming digitised. Instead of trekking to an outer town industrial estate to test drive products, children now watch , 360 videos of drones, trailers for games, etc., and then tell mommy which one they want. Toys R Us failed to see this change as an opportunity, investing more in physical products and ignoring the technological revolution which has led to under the age of four using mobile devices.
If Toys R Us didn’t have its blinkers on the whole time, it could have shifted to offer a fully integrated online experience, taking the customer right from the initial moments of inspiration to the final stage of purchasing. This would have offered it a chance to compete with the ultra-slick and convenient online customer journeys of retailers like Walmart and Amazon. The in-store experience Toys R Us was so famous for could have been transferred to the digital world, playing on the customer’s desire for and even turning its website into the fantastical destination its physical stores once were.
It’s not over for Toys R Us just yet; the company is talking about turning its retail spaces into interactive play zones and (rightly so) placing more focus on Whatever it does, though, if it wants to stay relevant and compete in today’s rapidly evolving digital world, it needs to do something nothing short of magical.
Are you struggling to understand which direction your digital strategy should go? Would you like a free review of your e-commerce store to ensure your targeting the right audience? At Cefar we specialise in bringing brands to life. Contact Us for an informal chat today.