Toys R’ Us Going Under Is Not a Surprise

Not long ago, someone asked me if I was surprised that Toys R’ Us was going out of business. I couldn’t help but laugh. Oftentimes in life we can learn so much from other people’s mistakes. The same is true in business and Toys R’ Us is a perfect example. I’m not saying to wear a bracelet that has “WWTRUD?” (What Would Toys R’ Us Do?) on it, but they can provide a great picture of what NOT to do. Simply flip those things around, and you’ll have what you should do.

While it’s true that I don’t have a finance degree or an MBA, I still can’t imagine that running a business with $5 BILLION in debt is a good idea. Add in about $400 MILLION to service that debt, and the situation is even crazier! After reading several of the many articles out there regarding the specifics of their situation, it is apparent that while those two factors were a huge burden to the company, they were only part of what doomed the toy retailer.

One of the many issues Toys R Us had – aside form their debt – was the fact that they did not evolve with the times. One point that hasn’t received a lot of coverage in the news is how their website was always outdated. For a long time, it was clunky and awkward to use.

A few years ago, some friends who live out of state had their first kid. I jumped on the Toys R’ Us site to find some toys to purchase and have shipped to the new parents. You would think that would be an easy task, right? Ha! I literally felt like I was jumping through hoops to make a purchase. The specifics of what they did aren’t really what’s important here. The bigger take away is what they should have done – listen to their consumer base. It’s not difficult to hold some focus groups to see how users navigate the site and how they work through the process.

The problem for many businesses, and even me as a designer sometimes, is that since we use the site so much, we know exactly what to do, and therefore can often skip over the awkwardly clunky steps. Bring some users in, watch them make a purchase, ask their feedback, and best of all – remove a step or two in the purchase process!

Another huge issue they had was that they never evolved their offering. When I was growing up, certain toys were only available at Toys R’ Us. It was THE place to go to if you were looking for a cool new toy. Once other stores started to creep into that niche market, they should have at that point done something to remind customers why Toys R’ Us was the place to shop at. Instead, they pretty much dug their heels in and stood their ground. That works great for parenting, but not for a toy store.

In the 8 years that Full Scope has been in business, we’ve seen most of our clients go through a change of some sorts. Whether introducing new products, drilling deeper into their niche, or changing the way they market, they’ve all done something to stand out and keep customers coming in. We’ve done that ourselves: we’ve introduced new services like graphic design and copywriting and we’ve continually invested time and money into making our website hosting top of the line. Change really is a beautiful thing.

Sometimes seeing the struggles and failures of another company can help a business owner point their own company in the right direction. Toys R’ Us gave many businesses, even small businesses, examples of what NOT to do. Was Toys R’ Us going out of a business a surprise? Nope. We can take the tough lessons they’re learning and apply them to our own businesses, however, and it will be no surprise when our businesses are around for years to come.