Topic: BusinessE-Commerce

Last updated: February 15, 2019

With fifteen percent of U.S toy market share, Toys ‘R’ Us (Toys) should be in a comfortable position. And yet, the company is bankrupt and closing all 800 of its U.S. stores.

Toys has neglected to advance its business model, incorporate innovation or adjust to changing shopper conduct, and decrease inevitably.1. Mismanagement caused Toys to bear billions in debt.Toys was saddled with heavy debt acquired when Bain Capital and other firms took the company private in 2005. It had about $5 billion in debt when the organization was moving toward chapter 11 out of 2017. The $400 million installments of a year left the organization feeble and ready for toppling.2. Lack of strategy to distinguish itself in e-commerce.

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The web presence of Toys offers nothing that Amazon, Wal-Mart Stores Inc. or other large retailers that sell toys do not. Its traditional free delivery, price savings and the most well-known brands promotions are insufficient to differentiate itself. Toys do not offer in-store pickup in exchange for discounts. It has never developed a phone application to make shopping easier. It has never pushed a credit card as well. Walmart does all of these.

Amazon does these and provides the extra benefits of its Prime membership and streaming media service.3. Lack of drama.Birthday presents are not tech-related, such as virtual reality headset, drones, or go-pro cameras. Kids can download an app in 30seconds to distort their face and make them look like Spat man.

Kids are seeking experiences. Therefore, a vist to a toy store is competitory with trampolining parks, laser tag, and go-karting. A toys store should be a magical place for kids, however, Toys is not very magical. By treating each Toys area like a fundamental retail store, rather than making an affair to draw children and adults in, the chain missed an indispensable opportunity.According to the article “What Is Strategy,” strategy is the creation of the unique and valuable position, involving a different set of activities, and it requires the company to choose what not to do. By struggling with the crushing debt, it is urgent for Toys to create a unique and valuable strategy to differentiate itself from competitors such as Amazon and Walmart.

Amazon and Walmart sell toys as loss-leaders or at a lower margin to amid the holiday shopping season and advertising forceful online shipping alternatives to the customer. However, the holiday season is disastrous to Toys because it relies exclusively on toys for profit. One of the strategies that mentioned in “Types of Strategy” is customer relationship strategy.

Strong customer relationships can be used to retain customers who could otherwise gravitate toward lower-cost providers. By doing so, it is necessary to be less functional, more on-trend, and enhance customer in-store experience to keep them happy. It has never and will never be good enough for Toys to do nothing but load the shelves with goods.

Toy store should make children and parents feel like it is a kids’ place rather than a grocery store. Firstly, the giraffe logo from the 1990s cartoon character should have gone long ago, and put children’s experiences front and center. Next, the store structure is necessary to change.

The first sign the customer can see in the store is that they reserve the right to check your bags as you leave. It makes the customer do not really feel valued. Unlike Toys, the first thing customer walk into the Lego store is not the products piled up, but some large benches of Lego to play with. Despite Toys has similar free to play toys somewhere inside its store, it is still less attractive to children than Lego. Since most Toys’ stores are in a large format, building a small size game room with a glass window that closes to the doorway will largely attract kids to visit the store.

Meanwhile, toys in the game room will include both newest and out of style toys. Such store structure provides children a place to experience either new or old toys with others and enhance their sense of belonging with Toys. As a toys store, the major customers are kids. Nevertheless, Toys should not ignore the millennial group since they are rapidly becoming parents.

Due to there is an overwhelming amount of information and opinions in regard to parenthood, what parents need is a authentic and reliable guide leading them through the confusion of raising children in the connected age. Toys should catch the opportunity to be the experts on everything in the journey of parenthood since it owns Babies ‘R’ Us. The article “Competing on Resources: Strategy in the 1990s” states that company should take advantage of what you do well, and create competitive advantage amount its competitors. Developing a mobile application to connect digital experience and a physical retail location can be a great way to find new ways to drive sales. The application also provides expert information to guide millennials in the journey of parenthood. Moreover, instead of the typical in-store pickup, Toys could allows online ordering in the previously mentioned application.

The customer can select “I’m Here” in the app when they arrive in the parking lot. An employee can execute the order by bringing the item to a particular parking area, and makes it easier for parents who have little ones in car seats. Groceries are rapidly adding services like this because it’s a huge win for busy parents. If Toys reach millennials adequately and make them parenting successfully, they may witness Toys’ return as a giant in the retail market.


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