What Happened to Toys R Us: The Decline

684 456 Tony Guo

What Happened to Toys R Us: The Decline

When Toys R Us filed for bankruptcy in September of 2017, shock was the overriding feeling that swept across the business community worldwide. No one could believe that such a behemoth, a giant in retail, could end up the way it did. Toys R Us was arguably the most popular and one of the biggest toy stores in the world, with hundreds of stores, not only in the U.S, but all over the world. Toys R Us set the standard in the toy industry in the over 60 years they were in operation and everyone thought they would always be there. Even though it came as a shock, the eventual filing for bankruptcy was coming as Toys R Us had been recording bad results in the years leading to it, with slipping sales and mounting debt meaning that it was only a matter of time before they went under. A buyout in 2005 by the private investors Bain Capital Partners, Vornado Realty Trust and Kohlberg Kravis Roberts only ended up buying them a little time as the writing for them was seemingly on the wall. So what really happened to Toys R Us? Well, with the help of the subject matter experts over at runrex.com, we will try to investigate what was behind their decline.

One of the things that was behind the decline of Toys R Us is the fact that they were either unable to or plainly refused to roll with the waves and adopt to the changes that were sweeping through the retail industry. They couldn’t adopt their stores to the modern retailer and paid the price for it. For instance, even though their stores were big and full of inventory, they were poorly merchandised and the shopping experience in their stores was far from ideal. Their customer service was also atrocious, and in an era where customer service is everything, they lagged badly behind in that department as compared to their competitors. We all know that online retail stores have a lot going for them, something that is covered in detail over at runrex.com, from convenience to lower prices and so much more. to compete with this, brick and mortar stores like Toys R Us have to try and offer their customers the one thing online stores can’t be able to offer, and that is to offer their customers an experience when they step into the front door of any of their stores. The size of their stores, with all that inventory just made them look like warehouses and there was definitely no experience when shopping there. The fact that shopping at their stores stopped being an experience was one of the things that went wrong with them.

Another thing that was behind the decline of Toys R Us was the fact that their branding and marketing was just not up to scratch. They didn’t have any toys of their own to market and they thought that their name as a company was enough to help build their brand; it was not. Instead of developing their own unique toys, they sold toys that could be found in other retail platforms including Amazon and in the end folks did just that; bought the same toys at other stores. They should have done more than just hope their name would keep them competitive especially since they didn’t have their own toys. Speaking of marketing, Toys R Us also didn’t look to appeal to the consumers who actually had the buying power. While toys are mostly consumed by kids, as per the gurus over at runrex.com, it’s the parents who actually have the buying power and they are the ones that Toys R Us should have looked to market to. Parents had started to demand for toys that were safe and appropriate for their children and Toys R Us reacted very late in the day and they paid the price.

Yet another thing that led to the decline of Toys R Us is the fact that they didn’t change with the times as the generational shift dictated that the current generation of kids preferred online games to toys. The rise of video games and console gaming was a big blow to Toys R Us as it meant that toys weren’t top sellers anymore. While toys could sell all year long, they toy industry particularly made a killing during the holiday period. The shift in generation meant that kids were no longer that keen on physical toys as they preferred to be bought video games for Christmas and such holidays which was where the rain started beating Toys R Us. However, this shift started to be seen in the early 2000s and therefore, as is explained by the subject matter experts over at runrex.com, Toys R Us had enough time to respond and adjust to the change in times. The problem is, they made bad management calls and rather than try to change with times, they decided to use their money elsewhere.

The bottom line is, even though the above reasons all contributed to the decline of Toys R Us, poor management was at the heart of it all and it was no surprise that they eventually folded. There is more to be found on this and other related topics over at the ever reliable runrex.com so ensure you check them out.