The Cost of Bad Digital Experience and the Lesson of Toys "R'' Us

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    Do You Know Why The Iconic Brand Toys ‘R’ Us Closed Doors Despite All Our Memories? #RetailBlues

    The year is 2016. You are the CEO of Toys ‘R’ Us. Your brand still controls 13.6% of the toy market although the company is highly leveraged, a strategy of your private equity investors. Amazon has its best ever holiday season. And digital commerce is becoming the way customers purchase consumer goods more and more. You also have read about the epic miss of Kodak to move to digital photography. Last but not least, you have observed other retailers invest in their websites and build e-commerce customer experiences in an effort to avoid a “Kodak moment” and improve ROI and CX. What do you do?

    Nothing new, is the answer, and bankruptcy is the outcome that we are all reading about this week.

    Sometimes, the ROI of the CX business case is survival. Literally. If Toys ‘R’ Us had listened to its customers and had build a digital experience on their website, the historic brand of our childhood would have become part of the childhood of our children. It is not easy for a brick and mortar business to reinvent itself into a digital business. It is not impossible. To survive, companies must evolve with their customers or die. The survival of the fittest in full effect on the business landscape, especially in retail.

    Every organization has capital funds to invest in big bets (or not). Disruptive technologies today are redefining our way of life and the way that we consume goods and services. Big brands today need to ensure their boards and executive teams are made of bold, visionary leaders who are not afraid to recognize the future when the future is coming their way, and to invest in righting their ship on time. The leaders of Toys ‘R” Us were not aggressive enough until the end. This navigated the brand into oblivion.

    Another 2016 scenario for Toys ‘R’ Us could have been to focus its remaining funding into a digital transformation, to build an interactive website and a user friendly app. The stores could have become places for customers to interact with the toys and order them on apps on their own devices, or on iPads in the store.

    Toys ‘R’ Us could have built an interactive loyalty program following the growth cycle of the children who received toys from their stores. I have a Toys ‘R’ Us loyalty card and for the last 5 years I have not received a single communication from the brand about its loyalty program. No coupons, benefits or programming of any sort.

    I do not know what Toys ‘R’ Us has invested in, in the past 5 years. Whatever it was, it was not their retail experience. One thing is evident. The brand did not have an aggressive digital strategy and vision to stay relevant in today’s world. A better management team would have never let this happen…while they were buying their new smart phones with more and more apps and digital products on them every year.

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    Liliana Petrova

    Published on 03/19/2018

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