Title: The Demise of Toys R Us: What Went Wrong
Headings: What Went Wrong: The Demise of Toys R Us
Marketing
What Went Wrong: The Demise of Toys R Us
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Content: How Successful Retailers Win Customers in an Era of Endless Disruption. “Amazon changed customers’ expectations about convenience, particularly millennial parents who were a prime segment for Toys R Us,” Kahn said. “ These parents became Prime members and got used to the convenience of ordering online.” At least part of the damage was, in a way, self-inflicted. In 2000, Toys R Us launched a 10-year partnership with Amazon, in which it paid the e-commerce giant $50 million a year plus a percentage of sales to be Amazon’s exclusive seller of toys and baby products. The joint toy store was a success, but it had serious consequences for Toys R Us. For one thing, the agreement meant that Toys R Us had no autonomous online presence — customers who tried to visit ToysRUs.com were redirected to Amazon. For another, once Amazon saw how well it worked, it began expanding its toy and baby categories, and other merchants, including Toys R Us competitors, began selling those products on Amazon. “Amazon changed customers’ expectations about convenience, particularly millennial parents who were a prime segment for Toys R Us.” – Barbara Kahn
“Amazon learned how Toys R Us did business … everything Amazon learned about selling toys they learned from Toys R Us, in some sense,” Kahn said.