AMS: E-commerce and the Failure of Toys “R” Us

Posted by AMS / Tuesday, March 20, 2018

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There was a time, not so long ago, when taking the little ones to Toys “R” Us was a family outing: Nothing quite as thrilling for a kid with a few dollars in his pocket and cooperative (and patient) parents at the Toys “R” Us store. We feel the impact of the latest news with more than a bit of nostalgia. What is the latest news? Toys “R” Us closing its doors in the US and Canada, and filing bankruptcy.

The news reports are full of questions as to why – what happened with Toys R Us? In the past few years we have seen a number of brick and mortar stores closing, malls in trouble, and e-commerce experiencing great success. Wikipedia calls it the ‘Amazon effect’, due to the huge role that Amazon has played in moving commerce to the Internet. The downside is felt as a cultural change affecting the way people and families socialize when enjoying the marketplace.

Most analysts agree that at the core of the issue was the failure of Toys “R” Us to recognize the manner in which shopping has changed, and deal with it in a timely fashion. According to qz.com: “Toys R Us got serious about the Internet much too late. It was only in May that the company said it would revamp its website to compete with Amazon and other online retailers.” The article implies that this, plus other factors, led to their demise.

Forbes Magazine expressed a similar analysis: “Yet Toys “R” Us might have turned things around, or at least staved off decline, if it had invested in the web earlier than it did.” The article went on to conclude that without a robust and early-enough investment in the web, Toys “R” Us became just the latest to fall.

A Business Insider article brings up the factor of debt, saying that the Toys “R” Us effort to reform its in-store and online shopping experience wasn’t enough. The article concluded that the toy store’s $5 billion debt combined with the success of online competitors brought about the failure.

The evolution of the retail market, both online and in physical outlets, is the result of increased e-commerce, and that is a good thing. In the case of Toys “R” Us, although e-commerce played a role, analysts agree that the failure of the treasured toy store was due to a series of business decisions.

AMS warehouses and fulfills orders across the spectrum, from major department stores to mom & pop stores to strictly online businesses and many others. Our company has been fulfilling Direct to Consumer (e-commerce) orders since it opened its doors. And recently, appreciating the vast marketplace that is Amazon, AMS established a new service, called “All Things Amazon”.

AMS is proud to play a role in the creativity and forward movement of e-commerce. We’re confident that the family trip to the toy store is not going to become a thing of the past. Department stores and malls are finding new ways to entice customers away from the Internet and into the store, and these ideas are exciting. As the world of commerce evolves, we look forward to a future of both online and in-store shopping fun.