Toys R Us Saw, but Didn’t Seize: A Lesson for All Companies In the Quest to Shift Ahead

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Toys “R” Us was a first mover in the high-volume-low-price game. That it no longer has this - or any -advantage is obvious from its recent filing for bankruptcy protection. What is not as obvious is how the company could have saved itself from this situation. It’s a lesson from which all companies can learn in the quest to sustain success in a market beset by accelerating changes. It’s a lesson I refer to as “see and seize.”

With all the data available, most, if not all, companies have the wherewithal to see what’s in the road ahead. They see the numbers on their balance sheets, they see what the competition is doing, and they see the change in consumer behavior. In the case of Toys “R” Us, it saw that it was steadily losing the low-cost provider game to Target and Walmart and Amazon. It saw that online buying was quickly gaining traction. It saw that, in many cases, parents and grandparents were looking for, not just low prices, but ideal learning experiences for their child prodigies. It saw that a high level of service was high on the list of consumer criteria relative to retailer choice.

Toys “R” Us saw all of this, year in and year out over the past several years. What it didn’t do was, yes, seize on the opportunities these data points made clear. It waffled and waited. It shuffled its management, going through six CEOs from 1994 to 2015. It went back and forth on its ownership structure. It was indecisive about its strategic direction, unsure whether to scale up or scale back. It divided its focus, unsure whether to concentrate on being a discount business, or on being an authority on educational play. Its brand name was strong, associated powerfully with the toy and play experience. A strong brand name gives a company permission to shift, to change things up to meet consumers’ changing requirements and desires.

The bottom line, as evident from the Toys “R” Us bottom line, is that the company failed to seize on any of the opportunities it could have in time to maintain its leading edge in the category. The world is changing at an unparalleled speed, and with it, the consumer marketplace. To keep pace, more so, to successfully keep shifting ahead of the competition, companies today must have what it takes to both see and to seize. To see and not seize is a recipe for bankruptcy.