Digital Business Analysis: Toys”R”Us Case Study - Fall 2024

This report provides a comprehensive analysis of the digital business failures of Toys”R”Us. It examines the company's inability to adapt to the changing retail landscape, specifically its struggles with e-commerce and digital transformation. The report highlights the importance of digital strategy and the impact of neglecting online sales, competitive pricing, and customer engagement. The analysis covers the company's late entry into e-commerce, failure to compete with online retailers like Amazon and Walmart, and the consequences of not investing in digital capabilities. The report also discusses the role of leadership and the importance of prioritizing long-term success over short-term financial gains. Ultimately, the report emphasizes the critical need for businesses to embrace digital transformation to remain competitive in the modern market.

Running Head: DIGITAL BUSINESS 0
Digital Business
Student Name:
Student University”

DIGITAL BUSINESS 1
In retail industry, Toys”R”Us was an iconic brand officially ended its online sales consisting
bikes, toys, birthday presents and video games. In term of digital business, this failure
happened after the company filed for bankruptcy for reinvesting and reorganizing its retail
operations which led to loss of $2.5 billion. This downward sales required focus on “brick
and mortar” store sales and models of traditional advertising (Howlett, 2018). In 2017,
Toys”R”Us produced a loss of $953 million after the declaration of bankruptcy. Thus, the
company was not able to keep up with the online retailers and also led to the failure of
offering competitive prices with big box stores. Toys”R”Us was failed due to its own
investment in digital transformation where an early investment of the company in e-
commerce offerings and experiences of omni-channel tried to save from an early grave
(Unglesbee, 2018).
The company’s lack of development in e-commerce made Toys”R”Us struggle and turn out
to shut. Through digitalization, the company tried to be in a better position financially and
competitively where the CEO, David Brandon, itself accepted that the company was late in
entering the game of e-commerce (Albanese, 2017). It was essential for Toys”R”Us to
develop a digital strategy which attracts customers and caters prospects before taking off by
Amazon. This lack of focus made the company in debt along with the inability of competing
with competitors such as Walmart and Amazon. Hence, Toys”R”Us could have been more
agile while investing in digital capabilities along with providing different experiences to their
customers if done correctly (Thompson, 2018). Lastly, Toys”R”Us faced failure due to
avoiding long-term success due to not valuing their important customers while considering
time waste and short-term financial performance strategy to optimize.

DIGITAL BUSINESS 2
References
Albanese, J., 2017. The Death of a Toy Retailer: How a Lack of Digital Transformation
Helped Destroy Toys "R" Us. [Online]
Available at: https://www.inc.com/jason-albanese/the-death-of-a-toy-retailer-how-a-lack-of-
digital-transformation-helped-destroy-toys-r-us.html
[Accessed 20 March 2020].
Howlett, D., 2018. Toys R Us failure points to structural business model failure, not just
digital. [Online]
Available at: https://diginomica.com/toys-r-us-failure-points-to-structural-business-model-
failure-not-just-digital
[Accessed 20 March 2020].
Thompson, J., 2018. Toys R Us Out Of Business Due to Lacking Digital Strategy. [Online]
Available at: https://www.exults.com/blog/toys-r-us-business-due-lacking-digital-strategy/
[Accessed 20 March 2020].
Unglesbee, B., 2018. Inside the 20-year decline of Toys R Us. [Online]
Available at: https://www.retaildive.com/news/inside-the-20-year-decline-of-toys-r-us/
526364/
[Accessed 20 March 2020].