The Big High Street Decline - Is it Because of Online?

On February 28, 2018, Toys R Us was put into administration after attempts to sell the business failed. More than 3,000 jobs were put at risk as it was revealed store closures would take place among its 106 outlets nationwide.

The retailer has been loss-making for seven out of the past eight years, with the most recent accounts filed at Companies House showing an operating loss of £500,000 on sales of £418m in the year to January.

Toys ‘R’ Us has been struggling for some time, with shoppers shunning the large out-of-town sheds that are synonymous with the Toys R Us brand in favour of buying online or from supermarkets.

Toys R Us isn’t the only high street retailer to go, Maplin and New Look have also announced job losses and store closes. Byron Burger and other well-known restaurants including Jamie’s Italian are also in line for the axe.

What is Causing the Decline?

Toys R Us may have declined because toys aren’t really enough for children anymore. Children now can download an app where they can have interactive play, watch YouTube and play on Xbox while talking to their friends. Imaginative play with a static toy just isn’t cutting it. Not only that but children are seeking out experiences like trampolining, laser quest, go-karting and so experiences are becoming more popular than play.

Tech-related birthday presents such as virtual reality headsets, drones or smart phones are in higher demand and a plastic toy just can’t keep up. So really, tech gadgets - smartphones and Ipads are what children want. So in a way, the online world has become more captivating for children.

In the case of New Look competing online has became more difficult as web advertising has become more expensive. They are competing with the likes of Asos who are digitally innovative and putting money into technological investments like visual search functions, customer chatbots and strong editorial content to make it’s outfits really appeal to their target consumers. Using language such as “nice top and jeans” as a clothing category has gone down really well.

Many millennials use this terminology to describe an outfit. Asos is capitalising on this and trying to connect with their audience and be in tune with their needs.

How can retailers learn from it?

Hamleys, Woolworths and Hawkins Bazaar all suffered from the onslaught of internet shopping but Toys R Us didn't learn from their example.

If brands are failing to be innovative online and really being intune with their audience then they will be at a loss. Audiences are changing, you need to keep and diversify or get left behind. A 7-year-old in 2000 isn’t the same as a 7-year-old in 2018. Market research is essential along with really doing some audience persona workshops and trying to establish who your consumers could be, what they want and where to advertise to them.

Toys R Us just aren’t giving children what they want and got pushed out by cheaper outlets and New Look aren’t being particularly innovative online. To succeed in retail you need a digitally innovative site and online presence with great content along with being in tune with your target audience. Having the competitive edge in business requires you to think more about how to be an industry leader and what you are going to do before the others. I think New Look and Toys ‘R’ Us didn’t diversify and do enough innovative online and in store.

10 Digital is a digital agency, offering a range of services including UX, audience persona workshops, digital marketing and app and web development. If your business is looking to grow and innovate, our creative team can help you from business development to marketing.