The Rise and Fall of Toys “R” Us
Toys “R” Us founded
in 1948 by Charles Lazarus, was one of the world’s leading retailers of kid’s
toys, educational products, baby merchandise, and other children’s products (Forbes, 2022). This store was
the leading toy chain store in the United States in the 80s and 90s. This baby toy
chain store enjoyed a significant market share within the United States as its
concept of having specialty mega toy and baby products aligned perfectly with
the demand in the American markets. Going national, Toys "R" Us
quality and affordable products drove many other toy retailers out of business.
However, by the early 2000s, the tables turned and the once-mighty toy giant
was no longer the nation’s premier retailer for toys. High discounted retailer
chains, Walmart and Target and online sites like Amazon, together with other
smaller retailer shops, brought better quality and more affordable toy products
to the market thereby beating Toys "R" Us in market shares. As a result,
this company was in a turnaround mode since 2004 when private investors bought
the company.
The turnaround
period for Toys “R” Us was characterized by several store closings, massive
employee layoffs, and substantial downsizing, all to raise cash and pay debts
the company owed while the retailer's business was booming. As a result, the
company filed for bankruptcy in 2017. Since then, the company has been looking
for investors to facilitate a bounce back. Unfortunately, the comeback strategy
did not go well because the remaining retailer stores did not generate money
from the sale of toys. The toy manufacturer kept the profits, and the stores
were just outlets for the sale of their products. Having failed to secure a
buyer who could refinance the mounting debts, Toys "R" Us closed its
last two stores in the US as the coronavirus negatively impacted in-store sales
(Biron & McDowell, 2021).
A sociotechnical
plan is a plan that considers technology requirements ranging from hardware,
software, personal and community aspects and how social structures and various
roles could influence the design of systems involving people and technology. An
example that could illustrate the potential of a negative impact on Toys “R” Us
sociotechnical plan is the evolution from in-store purchases to online
purchases especially with the advent of the coronavirus. This is relevant
because, with the coronavirus, every organization worldwide was affected in one
way or the other. There was a massive shift from in-store to online sales and a
move from onsite to a remote workforce. Thus, organizations who could not use exaptation
techniques to repurpose their projected plans for the future were bound to go
out of business, just like Toys "R" Us.
The two forces that may influence innovations in baby toy products are the price and quality of service. Prices drive the market share while good quality products and services, reduced time to market, and reduced time to consumers influence the sociotechnical plan of retailers within the toy industry positively or negatively. Also, with current trends in technology and the new normal as the world strives towards some form of normalcy with a pandemic with no end in sight, businesses must embrace the use of technology. Online technology could empower their once upon a time in-store businesses to hybrid structures that are; online and in-store. This could be a strategy to broaden the customer base and enjoy larger market shares while making the business remain relevant and competitive in the industry.
References
Biron, B., &
McDowell, E. (2021). Inside the wild and tumultuous history of Toys R Us, a
once-beloved children's brand that just closed its last 2 stores in the US. Business Insider. https://www.businessinsider.com/the-tumultuous-history-of-toys-r-us-photos-2020-8
Forbes. (2022). Toys 'R'
Us. Forbes. https://www.forbes.com/companies/toys-r-us/?sh=3a26b68a79f9
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