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Could Toys R Us Have Been Saved by Digital Marketing?


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In this guest article, Alexandra Coutts looks at the recent news about Toys R Us and wonders whether a better digital strategy could have saved the retailer. 
The recent news that Toys R Us, Maplin and Warren Evans have gone into Administration could call into question the stability of the UK retail sector, with two large multichannel  retailers following in the footsteps of Dixons and Woolworths.
However, the Office of National Statistics reports a growth in weekly household spending for the April 2016-March 2017 financial year, reaching levels we have not seen since 2006.
This increase in household spending has been attributed to an increase in inflation, an increase in employment – reaching “74.8% in Quarter 1 2017; the highest rate since records began at that time” and the extremely low base rate of interest (0.25%). The report also states that “approximately 42% of all UK families contain dependent children”.
So, if household spending has increased, this suggests that the reasons for the decline of Toys R Us are less to so with economic conditions, and more the retailer’s own failures.

Experts Opinions

Some commentators have naturally blamed online competition, and this is something that certainly puts pressure on ‘traditional’ retailers.
An article in The Guardian concludes that “The veteran retail analyst Nick Bubb said: “Toys R Us simply couldn’t compete with Amazon and other online retailers with its shabby and expensive ‘big box’ stores. Consumers won’t miss it when it’s gone.”
BBC article concludes that “Toys R Us has made a loss seven out of the last eight financial years. … Financially weak, Toys R Us has been unable to adapt to changing shopping habits. These days, many shoppers don’t want or need to drive 20 minutes to a big out-of-town warehouse to buy toys.”

How Online Could Have Helped

Every news article I have read references Toys R Us’s warehouse style stores as being a negative. They don’t appeal to consumers and are big to fill and maintain.
There’s a point to be made about in-store experience here. The warehouse style stores didn’t offer a compelling enough experience for shoppers once its price advantage had been lost to online competitors.
However, pretty much every article also cites consumers choosing to buy from Amazon as a contributing factor to Toys R Us’s demise.
Amazon’s Amazon Prime business is based on out-of-town warehouses for fulfilling online purchases. Toys R Us had the means, buying power and brand to become an online retail powerhouse but didn’t make the move to do so.
I have not been to a Toys R Us store in over 10 years, but as a very new parent I have bought a lot of baby products online within the last year.
I cannot recall visiting the Toys R Us website once in that time. While I might have come across it, I certainly didn’t buy from it.
Indeed, my work on a recent campaign for toy and gift retailer RED5 didn’t highlight Toys R Us as a noteworthy search competitor despite a strong overlap in product offering in some categories.
Utilising their established brand as a toy retailer Toys R Us should have:

  • Taken advantage of their product range to capture consumers at the end of their buying journey through very well optimised product pages and Google Shopping campaigns.
  • Used Social Advertising to keep their brand front of mind for parents.
  • Fostered cross-channel purchasing, using the website to drive footfall to special events, product launches, discount days etc. and using receipts and flyers in store to drive online purchases
  • Negotiated product exclusives.

They could also have rewarded customers directly, or indirectly by:

  • Making their loyalty scheme a bigger selling point and improving it with discounts or free gifts as rewards. Parents and relatives buy A LOT of toys over a 15-year period
  • Joined customer reward schemes such as Nectar or Avios to gain access to consumers looking to collect points for other purchases.

None of these would have saved Toys R Us within the last six months, although the Google Shopping and Paid Social would certainly have increased sales.
But if a majority of these had been adopted as marketing strategies as late as early 2017 it’s possible that Toys R Us wouldn’t be in Administration today. Insights

A quick analysis of the website (post Administration and therefore non-transactional but presumably otherwise unchanged) tells me that the website was perhaps overlooked until too late.
Perhaps online wasn’t considered an important revenue channel within the business, which would have been a huge oversight:

  • Google PageSpeed Insights scores the homepage as “Medium” across desktop (62/100) and mobile (68/100) however category pages perform pretty badly on desktop scoring 51/100 although the mobile performance is consistent with the homepage
  • The category URLs are horrendous from an SEO perspective, eg:
  • There are layers and layers of categories for a user to navigate through, meaning the the user journey isn’t straight-forward.
  • The URLs lack architecture, making it difficult for search engines to understand the hierarchy of content.
  • Page titles are not optimised for search. .

If multichannel retailers invest in “fitting-out”, managing, merchandising and marketing their websites to the same extent as their stores then they can have advantages over online-only rivals.
Our experience working with multi-channel retailers has shown us that if you open a store you will get more online traffic and revenue from that area.
Unsurprisingly, if you close a store online revenue from that area drops. There is a lot to be said for the combined power of being seen in day to day life and found easily online.
While there may be multiple reasons for the decline of Toys R Us, it’s clear that the retailer hasn’t performed as well as it could have online, and that retailers ignore digital at their peril.

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