Home Customer Journey Toys R Us Bankruptcy: A Preliminary Post-Mortem

Toys R Us Bankruptcy: A Preliminary Post-Mortem

by Jenna Sindle
Toys R Us

The retail sector has become a study in contrasts of late, and we’re not just talking about online retailers vs. brick-and-mortar stores. Unexpected things are happening, like Lands End extending its physical footprint and Nordstrom acquiring technology companies, not to mention, of course, online only brands like Warby Parker acquiring physical stores.  These unexpected actions are all designed to help their brands thrive in a disruptive environment.

Because what happens if you aren’t able to find your hook, or your anchor, in these turbulent times, happened to Toys R Us last week: Bankruptcy. While some might be quick to point the finger at Amazon in the downfall of this iconic brand, a preliminary post-mortem reveals that there were myriad problems that kept the retailer from being able to get on the right track.


Read on for more insight and best practices.

Understanding the Failure Toys R Us

 It would be all too easy to blame the Toys R Us bankruptcy on the company’s failure to embrace online retailing. But according to CNN Money, the company’s problems “predate the boom in online shopping. Many of its wounds were self-inflicted.”  The debt burden carried by the company meant that it could not invest in improving the customer experience – everything from not being able to update stores to failing to keep pace with rising wages at Walmart and Target – and that these, not Amazon, were what ultimately led to demise of the beloved retailer.

You can read more here.

Amazon Reportedly Interested in Some Toys R Us Stores

 Of course there’s an Amazon angle to this story.  Bloomberg reported this week that Amazon is reportedly interested din some Toys R Us locations. In this instance, Amazon isn’t interested in preserving the brand or acquiring any inventory or supplier relationships, simply in the real estate portfolio.  Speculation is that Amazon is interested in the retail spaces for two reasons. The first option would be to create Echo showrooms, where its capabilities could be demonstrated live.  Speculation is that the second option would see the former Toys R Us stores turned into inventory staging locations for Whole Foods grocery deliveries as the company begins to roll out 2 hour delivery windows.

You can read more here.

 Understanding the Customer: An Antidote to Modern Retailing Woes

 In a recent interview with Anne Marie Stephen  we discussed how the retail sector has hit an important milestone on the maturity scale. While the last few years have seen retailers throw money at tech-driven solutions with the hope of finding a solution, they’re now beginning to invest strategically.  One of the best strategies we’ve reviewed is to develop a single view of the customer; that is to develop a comprehensive snapshot of the person, their interests, and their preferred method of communication, everything that is needed to develop a “contextual view” of the customer.

The key to doing this is, according to Tim Barnes, Solutions Manager at Pitney Bowes is not just “gathering massive amounts of data and hoping trends reveal themselves. It’s about properly processing that data and looking at the layers that manifest and overlap.”

Want to learn more? You can do that here.


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