What Caused the Death of Toys ‘R’ Us

After many decades, it appears that Toys ‘Us’ will be going out of business and liquidating its stores. What caused the death of Toys ‘R’ Us. The short answer might be Walmart and online retailing. But that’s not the full story. This prior post certainly applies to Toys ‘R’ Us.

For some, it may be hard to believe how dominant Toys ‘R’ Us was at one time. As reported by Christopher Borelli for the Chicago Tribune:

“Toys ‘R’ Us came across like the closest thing to that universal childhood fantasy of a mountain of toys. It had a smile that lit up a room. It was the life of the party. It would do anything for anyone. That it had a mascot named Geoffrey the Giraffe — whose costume teetered like a spotted chimney over the heads of any unfortunate employee forced into it — had felt redundant. A single store holding every toy in existence was its own enticement.” 

 

What Caused the Death of Toys ‘R’ Us

To us, the biggest reasons for the Toys ‘R’ Us decline were its low adaption to the changing retail industry, the late recognition of the importance of online retailing, and slowness in closing under-performing stores. So, what do others conclude? 

According to Krista Garcia for eMarketer:

“Toys ‘R’ Us was one of the last remaining specialty big box stores in its product category. Best Buy is attempting to stay relevant by using its stores as experiential showcases for brands like Dyson and connected devices in partnership with Vivint, a smart home service provider. Yet, Toys ‘R’ Us’ problems’ stemmed less from changing consumer behavior and the rise of online shopping but from billions of dollars of debt.”

“Walmart and Target could potentially benefit more than Amazon. Coresight compared all toy buyers to Toys ‘R’ Us buyers and found behavioral differences. Toys ‘R’ Us buyers were less likely to purchase on Amazon than toy buyers in general and more likely to buy on both Walmart and Target (46.8% vs 38.6%). It’s plausible that shoppers who would prefer a traditional big box experience like Toys ‘R’ Us would be more inclined to shop in-store rather than online.” 

What Caused the Death of Toys 'R' Us
 

This entry was posted in Part 1: Overview/Planning, Part 2: Ownership, Strategy Mix, Online, Nontraditional, Part 5: Managing a Retail Business, Social Media and Retailing and tagged , , , , . Bookmark the permalink.

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