This week news broke that both Toys R Us & Maplin have both gone into administration after failing to find buyers for their respective companies.
As the news broke on Social Media the country sat in shock at what they were reading: How on earth could two well known, high street giants have fallen into such deep and dire circumstances?
That’s a great question that we as business owners need to answer, for the sake of our own futures! How does this happen? How do two giants of the retail industry fall to the brink of non-existence?
How Giants Fall: Is This Brexit’s Fault?
In their statement Maplin said this:
“The business has worked hard over recent months to mitigate a combination of impacts from sterling devaluation post-Brexit, a weak consumer environment and the withdrawal of credit insurance”
Although Maplin cite Brexit and the devaluation of the Sterling as a large reason as to why they have been plunged into administration – Brexit alone cannot be to blame for further exposing a situation we all know to be true of both of these Giants…
How Giants Fall: What We’ve All Known
Over the past few years consumers have raced towards e-commerce and online retailers with their hard earned cash, rather than to these high street giants. Toy sales and electronic sales are two of the strongest aspects of online consumerism, particularly for Amazon.
Customers have made it very clear that they want a fast service, from the comfort of their own homes – yet both business failed to adapt to meet their target audiences needs and delight their customers enough to remain in business.
When you take into account the reputation that Toys R Us had just a decade ago, they were a trustworthy company. Give any parent across the UK the option between a respectable brand like Toy’s R Us or the new kid on the block, Amazon, and 9 times out of 10 the respectable brand wins. But over time, this will change if you are not meeting their consumer preferences.
If Toys R Us had invested heavily in improving their online sales and competing with Amazon, today might never have come. Instead they invested heavily in offline premises, putting their money towards shops and manual labourers, rather than a competitive website and cheaper online systems.
How Giants Fall: Time Runs Out
Both Toys R Us and Maplin would have hoped for a strong sales increase across Christmas and January, but the inevitable happened and poor sales were, again, the statistics that came through.
Add to this Toys R Us’ £15million pound VAT bill and this last ditch attempt at a holiday season boom in sales would never be enough, and time eventually caught up with them.
But these are all things we already know – and have known for a long time coming, which begs the question why didn’t they both do something about it earlier?
There are many reasons, perhaps some behind the scenes that we may never know – but on the outside looking in, both Toys R Us and Maplin are examples of sinking ships that showed no intention of competing with the new giants in town.
What Can We Do As Business Owners?
Make no mistake, this is a sad day for business in the UK and for the 5,500 people whose jobs are now at risk. Our minds jump immediately to those other high street giants that we know are in similar circumstances, where Brexit may well expose their problems too.
There has been a strong call on social media for local communities to invest in the businesses that make up their towns, cities and villages – and while we echo this call to some degree – we don’t believe it’s the true way to fix things like this happening.
Asking consumers to change their preferences is never a long term plan to keeping businesses alive… as business owners, we must adapt at some stage:
So we want to say something else to the business owners of the UK…
Work hard to delight your customers at every opportunity you can. You have one thing that trumps online giants like Amazon, and that’s your personality and unique relationships with your customers and clients.
Work hard to meet your customers needs at every given opportunity – go above and beyond their expectations. Find out what they want from your business and businesses like yours, and give it to them – with all the trimmings!
That’s what drags people out of their homes on a cold, snowy Saturday. That’s how you’ll survive, and that’s how you’ll thrive.
We love you, and we’re rooting for you!
Get More Business Blogs Like This
Thanks for reading, we hope you enjoyed! For more blogs: