Toys R Us had a huge lack of innovation as they only sold traditional toys throughout the past years. They didn’t notice that children’s attitude toward toys has changed in the past few years; for example an eight year old can download an application in less than a minute and some applications may change their face and will make them look like Spiderman or any character they wish to look like. In addition, the manufacturer is the one who decides the brand loyalty and don’t care who to buy from and cares about the best price. On the other hand, Amazon, Walmart, Hamleys…etc. had more suitable prices so customers preferred them rather than Toys R Us. However, Toys R Us had higher prices as their profit only depended on selling toys.
Toys R Us had already lost before the holidays, so they didn’t make any sales to compensate their losses, but Amazon, Hamleys,….etc. made huge sales so customers preferred to buy form them rather than from Toys R Us, so that led to an even huge loss to Toys r Us.
More than that, a huge service that Toys R Us didn’t provide was an online shopping page, so customers preferred Amazon and many other online pages, so that led to more profit to Amazon and other online pages and Toys R Us lost even more . Another point was that the company’s debts were too much to bear this resulted because the private equity didn’t make a successful long-run plan and only thought of how to gain profit at the current period.