Toys R Us Files for Chapter 11 Bankruptcy; What to Fix

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Well, it happened. The other shoe that the industry has been waiting to fall…fell, with a thud, on Monday. Toys R Us has filed for Chapter 11 bankruptcy protection and as a result has a $3 billion loan and time to restructure the company.

But what then? The fortunes of Toys R Us employees, toy companies and even consumers will depend upon how adept the company is at resolving its challenges.

But what exactly does Toys R Us need to fix? Yes, we know it needs to get rid of its debt but that is just one of its problems. Here are a few thoughts:

Change the Business to Business Experience

Much has been said about improving the consumer experience. The business to business experience is not too great either. Talk to someone who does business with Toys R Us and before too long they will tell you how frustrating they find it, particularly the mid and smaller size companies. They like the people but they find the IT architecture to be antiquated, the charge backs to be too frequent and the fines too be too onerous. 

Create a truly digital business culture

Toys R Us like many bricks and mortar retailers is an analog company in a digital age. A 70 year old company with a long history of retailing is simply not going to have e-commerce in its corporate DNA. A culture changes from the top down. Mattel found its new CEO at Google. Toys R Us may want to look in the same direction.

The product is the ultimate experience

There is much talk of Toys R Us providing entertainment experiences, party rooms and more as a way of attracting more foot traffic. That is all well and good but the ultimate experience they can provide the shopper is a much larger variety of toys. A generation ago, no one went to FAO Schwarz or Toys R Us, for that matter, for a specific toy. They went for the wonder and fascination of seeing so many different toys in one place at one time. They went because they knew that they were going to see something they had never seen before.

Toys R Us will know it has it right when an adult or child, standing outside the front door, feels excitement and anticipation. A savvy manager will be able to look in a customer's eyes and see if its there.  This will be the ultimate test of success. 

A generation ago, Toys R Us was truly the world's greatest toy store. When it dramatically cut its SKU count it gave up that mantle. That role as the ultimate merchant is sitting up in the company's attic. It simply needs to rediscover it.

What do you think Toys R Us needs to do? Let us know your thoughts.

One thought

  1. Take at look at Hamleys in London.
    They create wonderment, excitement and the Wow factor. We are the number 1
    Demonstration partner at Hamleys. We could deliver more sales per square foot at TRU USA if we worked closely on terms and a programme that work mutually. It’s about true partnership, not price. ‘TRU partnership’ would lead to great value for all; consumers, TRU and us, the supplier.

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