Digital Strategy, Innovation, Leadership

Retail Lessons from Toys R US – Competing in the Digital and Amazon World!

19 Sep , 2017  

Retail Lessons from Toys R US – Competing in the Digital and Amazon World!

Toys R Us and the related Babies R US announced that they are filing for bankruptcy. How Toys R Us got to this point and how they hope to get out are great lessons for retailers competing in the digital and Amazon World.

It is Hard to be the Lowest Price in Retail, Today and Going Forward

If you want to have toys or anything at the lowest price, know that Walmart, Costco, and Amazon are the price competitors. Can you absorb retail overhead, rent, and staff and still beat their prices? It will be hard. You will need massive scale and super relationships with suppliers. It seems like retail must focus on another strategy. Let’s examine some that can help make a difference.

Focus on Service, Knowledge, and Access

Best Buy is a bright star in the retail world. It is holding on when others have given up. My recent Best Buy experiences are positive. In the Best Buy store that I visit, someone asks me how they can help almost immediately after I enter the store. Recently, I needed a Wi-Fi router. I was directed to the aisle and associate quite knowledgeable in routers helped me. I was in and out of the store quickly. Maybe that is not great for browsing, but Best Buy’s focus on service won my business. Service matters in retail and always has. Go to a Chick-Fil-A restaurant. They understand service and train their staff to focus on it!

Lesson: Invest in customer service, especially if you can’t win on price.


Experiences Matter: Toys are Fun – Shopping for Toys Should be Fun!

The Toys R Us store in Highland Park, IL must be the most boring store ever. The parking lot is almost always empty. The walls are white and the store is essentially a warehouse where parents go to take toys off of shelves. How did they make something so fun so boring? The store should be alive with experiences, engaging with ways to experience toys, and a destination place. Consider stores like Bass Pro Shops, Disney Stores, Best Buy, and frankly even Costco with its free samples. People want to be delighted when they shop. It seems there is so much potential with toys!

Lesson: Make your store an experiential destination.

Hire the Right People

In my many visits to Toys R Us and Babies R Us, I almost never had a person that was knowledgeable about the projects. Most parents are not up on the latest toys. New parents are great suckers for buying lots at Babies R US – who doesn’t want the best stroller, crib, and baby cam? Babies R Us staff should be able to quickly, easily, and, of course, effectively up-sell parents to better items. Again, so much potential unfulfilled because the stores are staffed with minimum wage stockers and clerks, most of whom don’t have kids. On the Toy R Us side, hire the real toy geeks. There are people who love toys. Get them in the stores to help parents and kids. There is nothing like working with a passionate person. I’ve always thought that the people at Disney, Whole Foods, Costco, and Starbucks are really good at selling their products and proud of where they work.

Lesson: Hire people that love and know your product.


Pay the Right People Well

Everyone wants to be rewarded for their efforts. Give front line staff bonuses for store performance. Offer a commission-based bonus to selling product. It drives service, passion, and attention in the workers. There is no reason to think that minimum pay will result in maximum service or quality.

Lesson: Reward your staff for jobs done well!


Offer Something Special…Focus on Local

It can be hard to do this across hundreds of stores, but begin with a local slant. Offer a commemorative shirt for the local sports team. Sponsor the local 4H club, soccer league, or hockey team. Connecting with the interests of your customers matters. Show you care about the community and offer something special. Sell products from a local artist, craftsman, or producer. Hire a local clown to entertain kids, give away ice cream from the local ice cream store. Show you are part of the community. It will drive people to your store. The on-line seller is not going to focus on the community in the same way. It is hard for them to do so. Leverage your physical advantage.

Lesson: Communities still matter. Focus on local, even if you are global.

Develop a Digital Platform that Matters

I remain amazed that Toys R Us does not have a way for kids to track their toy collections or learning about new models of cars or dolls. Being digital is more than selling on-line. Make digital exploration fun for your customer. Have a game or sneak-peek tool so your customers can interact with you digitally.

Lesson: Develop digital platforms beyond on-line selling. Invest in digital experiences, gamification, and communities.

Professor Walker provides keynote talks, seminars presentations, executive training programs, and executive briefings.

Recent talk topics enjoyed by clients have included:

From Big Data to Big Profits: Getting the Most from Your Data and Analytics”

“Leveraging Artificial Intelligence and Automation at Work”

“Digital Strategy: From Data to Dominance”

“Success with an Inter-Generational Workforce: From Boomers to Millennials”

“FinTech, Payments, and Economic Trends and Outlooks in Consumer Lending”

“The World in 2050: Risks and Opportunities Ahead”

Exceptional executive training programs have included:

“Digital Disruption, Automation, Analytics, Data Science, the IoT, and the Big Data Wave”

“Master Course on Operational Risk: Measurement, Management, Leadership”

“Complete Course in Risk Management: Credit, Market, Operational, and Enterprise Risk”

“Cybersecurity Training: Prevention, Preparation, and Post-Analysis”

“Strategic Data-Driven Marketing”

“Enterprise Risk Management and the CRO”

Professor Walker has provided these talks and programs to leading firms and governmental organizations. Click here to learn more about his talks, references from clients, options for customized talks and programs, and details on scheduling a program for your organization.

About Russell Walker, Ph.D.

Professor Russell Walker helps companies develop strategies to manage risk and harness value through analytics and Big Data. He is Clinical Professor of Managerial Economics and Decision Sciences at the Kellogg School of Management of Northwestern University. His most recent book, From Big Data to Big Profits: Success with Data and Analytics is published by Oxford University Press (2015), which explores how firms can best monetize Big Data. He is the author of the text Winning with Risk Management (World Scientific Publishing, 2013), which examines the principles and practice of risk management through business case studies.

Professor Walker has developed and taught executive programs on Enterprise Risk, Operational Risk, Corporate Governance, Analytics and Big Data, and Global Leadership. He founded and teaches the Analytical Consulting Lab, Risk Lab, Global Lab, and Digital Lab, all very popular experiential learning classes at the Kellogg School of Management, which bring Kellogg MBA students together with corporate opportunities focused on data and strategy. He also teaches courses in risk management, analytics, and on strategies in globalization. He was awarded the Kellogg Impact award by Kellogg MBA students for excellence and impact in teaching.

He serves on the Scientific and Technical Council for the Menus of Change, an initiative led by the Harvard School of Public Health and the Culinary Institute of America, to develop healthier and more environmentally friendly food choices. He is a former member of the board of the Education and Technology Committee to the Morton Arboretum. He was a board member of the Virginia Hispanic Chamber of Commerce, where he developed support programs for Hispanic entrepreneurs and worked with US senators on US Latino matters.

You can find him at @RussWalker1492 and and


, , , , , , , , , , , , , , , , ,

By  -      
Russell Walker helps companies develop strategies to manage risk and harness value through analytics and big data. He has done novel research in data monetization and digital disruption and advises leading firms on these topics. As Director of Experiential Learning in Analytics and Associate Teaching Professor of Marketing and International Business at the Foster School of Business, at the University of Washington, Dr. Walker is an academic thought-leader on analytics. Russell Walker has developed and taught leading executive programs on Big Data and Analytics, Strategic Data-Driven Marketing, Enterprise Risk, Operational Risk, and Global Leadership. Previous to moving to Seattle and the Foster School, Dr. Walker was Clinical Professor at the Kellogg School of Management of Northwestern University, where he founded and taught many popular courses in analytics and risk management. His is the author of the book From Big Data to Big Profits: Success with Data and Analytics (Oxford University Press, 2015) which examines data monetization strategies and the development of data-centric business models in the new digital economy. He is also the author of the award-winning text Winning with Risk Management (World Scientific Publishing, 2013), which examines the principles and practice of risk management as a competitive advantage. Dr. Walker consults with firms on the topics of Big Data and Analytics, Data Monetization, Risk Management, and Business Strategy. Russell Walker can be reached at: @RussWalker1776

1 Response

  1. Firas Aldabbagh says:

    Excellent article on “The must do list” for normal retailers to survive in the internet age.
    As Preofesor Walker adequately points to the need for retailers to provide an easy, enjoyable and special shopping experience to compete with price, convience and selections of ecommerce retailers.

Leave a Reply

Your email address will not be published. Required fields are marked *