UX is important, or is it? A UX case study — The Downfall of Toys R Us

Agatha Leung
8 min readOct 2, 2020

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Toys R Us filed for bankruptcy in September 2017 after years of slumping sales and piled-up debts (Bolton et al., 2019). As the former leader of the toy industry, the fall of Toys R Us was definitely heart-breaking for loyal fans, but its collapse did not come out of the blue. Toys R Us failed to keep up with trends, operated without innovations, could not satisfy customers’ changing desires and needs, and therefore doomed to its death.

Wikimedia Commons

Lack of Experiential and Interactive Elements

Former retail executive Mark Cohen commented on the failure of Toys R Us, saying that with their serial mismanagement, the collapse of the once King-of-toys was inevitable (Wharton, 2019). Toys R Us neglected the needs of customers with its poor in-store management. Their stores were merely big, without any organization. The lack of fascinating features grabs neither children’s nor adults’ attention. As quoted from BBC News article (2018), “a trip to Toys R Us was mundane and lacking in inspiration.” As a toy retailer, its target is supposed to be kids and therefore should include more hands-on experiences. Take Lego land as an example, kids can have a taste of building with Lego bricks that are displayed out of the box before actually buying them. The interactive activities enhance the sense of engagement and build connections between customers and products. Product-liking is actually built by touching the product. Consumers would feel attached on an emotional level with a sense of “proximity”, and therefore are more willing to buy a product (Krishna, 2011). Toys R Us had definitely not thought it through and failed to cater the needs of its customers.

Poor Customer Service

Other than the lack of interaction, the unsatisfactory customer service is also one of Toys R Us’s biggest stumbling blocks. As mentioned, Toys R Us’s stores are usually “huge”, jammed with different products. With poor arrangement and store design, it only leaves customers feeling overwhelmed looking at the mile-long aisles of products (Hiiemaa, n.d.). Instead of feeling excited surrounded by the range of available choices, customers are often frustrated in finding what they want. To create an enjoyable shopping experience, neat presentation of products is of utmost importance while it does no good leaving customers feeling lost in the piles of toys. Visual merchandising elements should be implemented and that the variety of products should be limited. More well-trained staff should also station in the stores to provide assistance to customers.

Uncompetitive against other Big-Box Retailers

Facing all the competitors that offer cheaper prices, Toys R Us has no odds of winning in this price war. It resisted cutting down the selling price and this definitely chased away the cost-conscious consumers. Consumers flock elsewhere for cheaper toys, such as from other big-box or online retailers. These retailers do not aim at making profits with toy sells. Instead, they focus on grabbing customers, slashing the price of toys, knowing that they can make up for the deficit on the toys line with other in-store purchases (Bolton et al., 2019). These competitors, such as Walmart and Target are selling groceries and daily supplies all at the same time. Offering consumers with a more-than-attractive selling price, they succeed in conquering even the toy market. Customers feel more like shopping in a department store, buying all the goods including toys, than spending time in a poorly designed toy store. As Toys R Us provided neither good shopping experience nor attractive price, they failed to entice busy customers who would rather grab a toy from Walmart while purchasing groceries and other daily necessities.

Failure to Beef up E-commerce

Toys R Us also failed to switch to the online market. Compared to competitors like Walmart, it did badly in website design and e-commerce and therefore failed to keep pace with the changing market. If Toys R Us had tried to embrace technology and innovation to adapt to the changing preferences, it might have been able to regain its customers.

Walmart Showcase

Compared to the falling empire, Walmart has stayed strong and competitive in the market. Both its sales and gross income are on the increasing trend attributing to its effective retail operation management and e-commerce development. Referencing to the Baymard’s UX Research*, Walmart’s e-commerce UX performance is a cut above Toys R Us’ (Baymard Institute, n.d.). According to the results, Walmart ranks 10th against 60 other major e-commerce sites while Toys R Us ranks 51th. In the following, examples would be provided to explain why Walmart scores significantly higher than Toys R Us in terms of website usability.

*Baymard’s UX Research is based on usability testing with more than 1,200 testing subjects, manual benchmarking across 750 UX guidelines, in-lab eye-tracking testing, and quantitative studies with more than 10,000 participants.

  1. Sign up/Log-in
Screenshot on Walmart’s website.
Screenshot on Toys R Us’s website.

In terms of the design of the navigation bar, Walmart has clear icons that lead users to their accounts and shopping cart, to assist them in signing in and checking out. Even if users have not yet registered, they can easily click on the buttons and create accounts.

But for ToyRus’ website, it is not as user friendly. Non-account-owners would see a pop-up message asking them to sign up. But if they accidentally dismiss the pop-up, there are no clear icons on the header to show users how to log-in or create accounts. They need to scroll down to the bottom footer area for email sign up.

2. Autocomplete Suggestion

Screenshot on Toys R Us’s and Walmart’s website.

For Toys R Us, its website does not have the autocomplete suggestion function, and users need to type the whole name of the items. On the other hand, autocomplete suggestions is available on Walmart’s search bar, saving time and bringing convenience for users as they can easily search for what they want without completely type out the whole product name. The suggestions can also act as “inspiration” and that users can consider buying products that they do not plan to buy at first.

3. Homepage Design and Details

Screenshot on Walmart’s and ToysRUs’s website
Screenshot on Toys R Us’s and Walmart’s website.

Walmart’s Homepage provides product details such as price and rating shown in the suggestion/ featured box, so as for users to know more about the products without clicking on to them. As for Toys R Us, although there are also items listed out as recommendations, users might not be interested as no detail is provided.

Lesson from Walmart

Innovative Ideas to Keep Customers

Apart from its superior UX e-commerce performance compared to Toys R Us, Walmart is also more innovative in merchandising and strives to offer up-to-standard customer service. Recently Walmart launches an online “Walmart Wonder Lab” designed to give children the opportunity to test out toys in the middle of the pandemic. In the past, there were in-store events that allowed kids to play with toys. Under the lockdown and social distancing, Walmart wishes to replace that with a virtual experience where kids could still interact with toys before adding them to the wish-list. The virtual unboxing at the same time can distract the kids from their busy parents, allowing them to take a break from the exhaustion. This innovative idea wins both kids’ and parents’ hearts.

Keep Price Low

As Walmart keeps on finding ways to keep its customers during the outbreak of the pandemic, it is of no doubt that Walmart has crept to the top of the loyalty leader-board, reported surpassing the even popular Amazon (Gudat, 2020).

In terms of customer service, Walmart succeeds in sticking to its original goal: “help people save money so they could live better.” Walmart emphasizes on low costs and low selling prices and it continues offering “low everyday price” till today. Walmart therefore has attracted a large group of loyal customers with its specialty: Low price. Other than offering retail service, Walmart also has its own brands and offers more choices for its customers. The firm’s consumer goods are designed for mass-production and therefore are often offered at a cheaper price.

Layout design

Walmart’s store layout design is based on consumer behavioral analysis (Smithson, 2020). Certain goods are placed in certain areas to maximize the chance of being reached and therefore increases the purchase likelihood. The company’s warehouses are also specially designed so as to rapidly transfer goods across the supply chain to the stores and prevent the “out-of-stock” situation.

Employee motivation and Customer Service

Not only does Walmart assess customers’ needs in layout design, but its employees are also trained to follow the “ten-foot rule” which means that any staff within ten feet of a customer must offer assistance (Keller, n.d). To boost motivation and improve performance, Walmart employees are encouraged to manage their own areas and they are informed on the sales, inventory, expenses, and profits. Walmart believes that employees would be motivated to serve customers if they feel being valued.

Toys R Us had actually created a fallacy that other online/ big-box retailers are its “murderers”, taking away all the consumers with prices at “low-margins or as loss-leaders”. (Business Insider, 2018). Yeah, it is true that the rise of multi-brand retailers contributes a part in its decrease in sales, but it is clear to the readers that the main reasons behind its fall are its poor in-store service and its inability to transform to suit the changing preference of consumers.

Baymard. (n.d.) Baymard’s UX Research Methodology. Retrieved from: https://baymard.com/research/methodology

BBC News. (2018, Feb 28). Five reasons Toys R Us failed. Retrieved from: https://www.bbc.com/news/business-43210854

Bolton, J., Farmer, J., & Pennington, H. (2019). An Unwrapping of the Toys “R” Us Chapter 11

Bankruptcy. Chapter 11 Bankruptcy case studies. Retrieved from: https://trace.tennessee.edu/utk_studlawbankruptcy/56

Business Insider. (2018, Mar 16). Toys R Us says a ‘perfect storm’ killed the toy chain and it blames Amazon, Walmart, and Target. Retrieved from: https://www.businessinsider.com/amazon-walmart-target-killed-toys-r-us-2018-3

Gudat, S. (2020, Jan 20). How Walmart customer loyalty is rising to the top. Customer communication group. Retrieved from: https://www.customer.com/blog/retail-marketing/walmart-customer-loyalty-rises-to-top/

Hiiemaa, K. (n.d.). 7 Retail Management Lessons You Can Learn from Toys ‘R’ Us. Erply. Retrieved from: https://erply.com/7-retail-management-lessons-you-can-learn-from-toys-r-us/

Keller, C.R. (n.d.). What is Walmart’s Secret to Success? Profitworks. Retrieved from: https://profitworks.ca/small-business-sales-and-marketing-resources/blog/marketing-strategy/579-sam-walton-wal-mart-what-is-wal-mart-s-secret-to-success.html

Krishna, A. (Ed.). (2011). Sensory marketing: Research on the sensuality of products. Routledge.

Smithson, N. (2020, Aug 21). Walmart’s Operations Management: 10 Strategic Decisions & Productivity. Panmore Institute. Retrieved from: http://panmore.com/walmart-operations-management-10-decisions-areas-productivity-case-study-analysis

Wharton. (2018, Mar 14). What Went Wrong: The Demise of Toys R Us. Retrieved from: https://knowledge.wharton.upenn.edu/article/the-demise-of-toys-r-us/

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