Maplin and Toys R Us raise questions once again about what kind of business we as consumers actually want and need in today’s world.
Do we need stores that sell products in a vertical like toys or electronics?
Can’t we just go online for these? And, if that’s the case, shouldn’t the physical store be set up solely as a ‘brand experience’? Or just an efficient and functional experience like Argos?
The closures of Maplin and Toys R Us are yet another demonstration of the slow and steady decline of once clearly differentiated behemoths not really understanding the ‘why’ to their existence in a changing landscape.
“Kids need toys. We’ve got them ‘all under one roof’. Well, guess who came along to spoil that party? You guessed it, everyone’s favourite enemy: Amazon”
There are more challenges like this on the horizon for others.
Let’s consider two approaches to the customer.
On the one hand, you have Toys R Us’ approach to selling toys to kids. Not much has changed in 20 or 30 years – it has an online offering, but, really, it’s the same old story.
Kids need toys. We’ve got them ‘all under one roof’. Well, guess who came along to spoil that party? You guessed it, everyone’s favourite enemy: Amazon.
I know it’s unfair comparing anyone to Amazon. Sometimes it feels like even Google and Facebook wouldn’t stack up, so how could Toys R Us?
But what’s really brilliant is Amazon’s insight – how it views its customer.
Toys R Us was meant to provide convenience and efficiency for buying toys, but a deep understanding of the person making purchasing decisions has led Amazon to dominate immensely.
It is now reported that 70% of Americans with incomes of $150,000 or more who shop online have an Amazon Prime membership.
Alexa, Echo, Dash, IoT, Smart Home and Prime Now delivery services are predicated on attracting and retaining Prime customers who have higher disposable incomes and are willing to pay for convenience.
Amazon realises that the most profitable Prime customers it has are facing a continual time shortage due to demanding jobs and travel schedules.
The Prime services roadmap continues to reflect convenience and speed to serve high-income families, many of whom have two wage-earners and find time is at a premium.
If Toys R Us, or indeed Maplin, had a better understanding of their customer’s needs, they could have made changes before it was too late.
So will other retailers wake up and smell the (hopefully fair-trade) coffee before it’s too late? Or are they all destined to meet Blockbuster on the way up to retailer heaven?
“As Amazon thrives, it continues to send a box the size of a Manhattan flat to deliver a pair of socks to Newcastle from a warehouse in Milton Keynes”
One potential saving grace that’s not really been addressed by Amazon is the huge pressure on companies to be more environmentally conscious.
This seems to be one way in which a brand or retailer can really connect with their audience and buy back their loyalty.
As Amazon thrives, eating everyone’s lunch, it continues to send a box the size of a Manhattan flat to deliver a pair of socks to Newcastle from a warehouse in Milton Keynes.
This, surely, is its weak spot.
Yet it has just announced it is rolling out more Amazon Go shops – opening physical retail stores just as others are closing.
It really is the dawn of a new era.
The battle for price and convenience has been lost.
But the battle for the conscientious consumer has only just begun, and this is Amazon’s Achilles’ heel.
The question is: who is bold enough to lead the charge and fight back?
- Daniel Murray is co-founder of mobile commerce apps Mobula and Grabble