What should the name Toys R Us conjure up? A magical interactive world of fun and fantasy...

What should the name Toys R Us conjure up? A magical interactive world of fun and fantasy...

As Toys R Us and Maplin collapse into administration, retailers face incredibly tough conditions, so need to pay heed to some key marketing principles to give themselves the best chance of survival.

A sad day in British retail, as 5,500 jobs losses are announced due to liquidation of retailers Toys R Us and Maplin. Another sign of the tough times in retail, but was this a surprise to anyone, really?

Toys R Us has been on the brink of collapse for some time now, since the failure of the US parent company last autumn.  However, it has managed to limp on until after Christmas, with hopes that a golden end to the year would entice a buyer and all woes would be gone.

That didn’t happen. Instead, the company has called in administrators and leaves a £15m unpaid tax bill and a further £37m pension deficit.

Meanwhile at Maplin, unable to secure additional funding or find a buyer, the administrators have also been called in, with chief executive Graham Harris citing "macro factors" to blame and not the strength of the brand.

Although very different beasts, there are some similarities and some differences that have led to the demise of these two brands. First a look at the similarities – the "macro factors":

1. The B word

Top of the list for both retailers, recent political events in the UK have resulted in a devaluation of sterling (eating away at margins) and also a faltering of consumer confidence. That means people are spending less. This will be affecting every retailer in the UK and it is a case of the weak and the frail who will be the first to go down. This is also a key reason why many of the UK’s top casual dining chains are currently closing large numbers of the restaurants.

2. The A word

The pressure to compete with Amazon and other online or digital-first brands is a big consideration for both retailers. Not only that, but the multiple business models and delivery options that go with it.

The days of merely going to a store to buy a product are over, and retailers need to adapt accordingly. Everyone from Tesco to John Lewis is a toy and electronics merchant these days  - as a specialist store, you need to offer over and above what you competitors do in terms of service and experience.

3. The experience

Linked to the above point, if you want consumers to come to your store, then you have to give them a reason to do it.

It needs to be experiential, full of hands-on demonstrations. For Toys R Us, this is even more pertinent. What could (or should) be more fun than a toy store?

Close your eyes and imagine what the name Toys R Us conjures up. A magical interactive world of fun and fantasy where children and adults can spend hours being entertained. Traditional toys, modern market style pop-ups of fidget spinners and other crazes.

The reality: a cold, shabby warehouse on the outskirts of Croydon with supermarket style aisles that may not have changed since the 90s.

How can Lego stores be opening up at a time when the archetypal toy seller is closing? Because Lego stores are imaginative and creative spaces that children want to linger in and parents want to spend in.

If your store base is out of town you are going to have to work even harder, because the UK consumer doesn’t shop like that anymore. You have to make them come to you - the store is the lure. Not the promotions, the prices, the products, the variety, but the experience of going there and what you get when you arrive. Ikea can do it, so can you.

4. Point of difference

Linked to the previous point. Remind me again what Maplin is known for? Isn’t "electronics" just about everything these days?

It certainly seems to be in the case of Maplin, who sell just about everything from drones, gaming laptops, batteries, kitchen appliances, cables, soldering irons and disco lights.

Confused? To stand out from the crowd a point of difference is vital. Be famous for something. It seems that pressure to make the real estate viable has led to Maplin becoming a Jack of all trades.

Toys R U has a clear distinction in the name, but fails to capitalise on it. Maplin doesn’t seem to know what it is about to begin with.

So to summarise, a sad, sad day, but not an unexpected one. Retail is a tough business and it takes laser sharp clarity and purpose for a business to succeed. Give people a reason to cross the threshold, top class online presence is a given but the store is the lure.

Kate Jones is a brand consultant and retail watcher

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