Toys R Us collapse due to its failure to compete with Smyths more than Amazon

Following today’s news (Wednesday 28th February) of the sad demise of Toys R Us, Patrick O’Brien, Retail Research Director at GlobalData, a leading data and analytics company offers his perspective on the company’s downfall.

O’Brien says, ‘’ While the narrative about the sad demise of Toys R Us focusses on how it was killed by the Internet, data shows that the rise of multichannel player Smyths caused even more damage than Amazon.’

Toy market share of the current top four toy retailers in the UK, 2008-2017

Source: GlobalData Retail

The internet did take away Toys R Us’ main USP, which was having such a wide range (‘everything under one roof’), but its failure to react in terms of the shopping experience, pricing and its own website, is in stark contrast to the more imaginative reaction of Smyths, and to a lesser extent The Entertainer.’

Without a deal in sight, more closures are imminent. But it won’t be Amazon that benefits the most. According to GlobalData’s How Britain Shops survey, frequent Toys R Us shoppers are more likely to shop at market leader Argos and Smyths.”

Where frequent users of Toys R Us, also shop frequently for toys

Source: GlobalData How Britain Shops survey March 2017

ENDS

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– Comments provided by Patrick O’Brien, Retail Research Director at GlobalData

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