On Monday, September 18th, Toys 'R' Us, one of the largest toy stores in the world with over 1,600 locations, filed for Chapter 11 bankruptcy protection. Let that sink in for a second... You are all familiar with Toys 'R' Us. At one time, it was likely the desired stop on a trip to the mall with your family. Judging by the current news headlines, it has probably been a long time since you have visited... It is no secret that Amazon and other online retailers have slowly been choking the life out of many of the classic brick and mortar establishments we are so familiar with. They do this by cutting prices, which, in turn, puts immense pressure on traditional retailers who have to pay huge overhead on their storefronts.
According to an article posted on Business Insider, the top three specialty toy and baby goods retailers so far in 2017 are as follows: 1. Amazon - $2.16 billion 2. Walmart - $1.3 billion 3. Toys 'R' Us - $912 million Toys 'R' Us was basically given the "Toys 'R' Us treatment." After years of leveraging lower prices to force smaller toy stores out of business, online retailers gave them a dose of their own medicine. In light of this, we thought it might be worthwhile to consider what we can learn from Toys 'R' Us' fall from grace. Be willing to change The first, and perhaps most important lesson, is to be watchful of new trends and be willing to change. Amazon did not sneak up on Toys 'R' Us. In fact, the two companies once had a partnership with one another. The two companies signed a 10-year agreement in 2000 that made Amazon.com the exclusive online retailer for Toys 'R' Us products. The issue at the heart of the lawsuit filed by Toys 'R' Us against its partner in 2004 was that they were not the exclusive toy provider to Amazon. In the end, Toys 'R' Us won the lawsuit and was allowed to set up its own website where it could sell its products. Even though Amazon was officially on the toy giant's radar, Toys 'R' Us never heeded the warning. They knew Amazon was changing the game with a true online retail space but failed to integrate a strong enough online presence to compete. Are you fighting obvious trends in business? Do you have a quality, interactive website? What old practices are you holding onto that you need to let go of in order to stay competitive? Don't lose what makes you unique Toys 'R' Us was once THE place to go for toys. But even before Amazon came along, Walmart, Target, and other retailers started chipping away at their stranglehold on the market. They dedicated square footage to toys that always drew children and, in turn, their parents, to that particular section on every visit. Did Toys 'R' Us have more toys than Walmart? Of course, but it was no longer unique. Other retailers slowly started eliminating the need to go to a store that only had toys. Families could go to Walmart and Target to get household supplies, groceries and toys. In what ways is your practice no longer unique? Perhaps a competitor has set up shop nearby in a more modern space? Whatever the reason, the solution requires you to act. Do not follow Toys 'R' Us' example and wait until it is too late. One of the biggest mistakes you can make is to passively implement changes. If you see a glaring hole in your business, research it and hire a professional to address it. If you have lost what once made you unique, look for the next thing that will distinguish you from your competitors and satisfy your customers. Stay in the mind of your customer What is the real issue with Toys 'R' Us? Yes, they took on an exorbitant amount of debt and never updated their stores. Sure, they didn't pivot when they should have. But these are symptoms of a more deeper rooted issue. Ultimately, Toys 'R' Us forgot about its customers. Of course, it is highly unlikely that Toys 'R' Us could have out-sold Amazon, but who knows? What if they had seen their customers' obvious desire to facilitate the majority of their transactions online and invested in an online store that could facilitate the demand? Perhaps they could have focused on creating unique, in-store experiences that would have made their stores more desirable? The truth of the matter is that Toys 'R' Us' customers, along with our customers, send us clear messages. They may be subtle, but they are always clear. For Toys 'R' Us, their customers no longer speak in subtle tones. They are now screaming that they no longer want to come into their stores. What can we, as healthcare professionals, do to better serve our customers and avoid becoming Toys 'R' Us? Maybe it means researching and implementing telemedicine consultations? What about video diagnosis?
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AuthorThe staff and doctors at VisionAmerica are committed to providing relevant information for you, your patients and your practice. We hope you find the information in our blog post helpful. Archives
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