[Danming Li]

<b>Introduction</b>

<span style=”font-weight: 400;”>Toys R Us was once the world’s leading toy retailer with over 800 stores in the United States and 800 stores worldwide. However, in 2018, the company went into liquidation and closed virtually all its stores worldwide. Several factors contributed to the decline of Toys R Us’s commercial success, including those discussed below.</span>

<b>List of the factors</b>

<span style=”font-weight: 400;”>Firstly, the rise of online retailing played a significant role in the company’s downfall. With the increasing popularity of online shopping, more and more customers shifted towards online shopping, which resulted in a decline in in-store sales. Toys R Us needed to respond more adequately to the changes in consumer behavior, and they lagged in the online retailing sector, ultimately leading to a loss of customers (CNBC, 2018). The changing retail landscape also contributed to Toys R Us’s downfall. In recent years, retailers have adopted a more experiential approach to shopping, offering customers a unique shopping experience beyond just purchasing products. However, Toys R Us failed to adapt to this changing trend and continued its large-scale supermarket retailing model for over 50 years (CNBC, 2018). They should have provided a unique shopping experience, which made it difficult for them to attract and retain customers.</span>

<span style=”font-weight: 400;”>Thirdly, the economic recession of 2008 also played a significant role in the decline of Toys R Us. The recession resulted in a decline in consumer spending, which affected the company’s sales. Furthermore, the recession also made it difficult for Toys R Us to obtain financing, which impacted their ability to invest in new technologies and to compete with other retailers (CNBC, 2018). Fourth, the changing demographic landscape also contributed to the downfall of Toys R Us. With the increase in multiculturalism, the toy market became more diverse, and Toys R Us failed to cater to the needs of diverse customers (CNBC, 2018). They continued to focus on traditional toys, making it difficult to attract customers from diverse backgrounds. The company’s competitive environment also contributed to its downfall (CNBC, 2018). Toys R Us faced stiff competition from other retailers such as Walmart, Target, and Amazon, which offered similar products at lower prices. These retailers also had a more significant online presence, which made it easier for customers to shop online.</span>

<b>Categories</b>

<span style=”font-weight: 400;”>Categorizing the factors that contributed to the downfall of Toys R Us into the main marketing environment components helps to understand the various external factors that influenced the company’s performance. The changing retail landscape and the rise of online retailing fall under social and technological factors (Li et al., 2022). Social factors refer to the changes in customer preferences, attitudes, and lifestyles, while technological factors refer to technological advancements that influence consumer behavior (Zhao et al., 2021). The rise of online retailing resulted from technological advancements, and it changed how customers shopped for toys. Toys R Us needed to adapt to these changes and fell behind in the online retailing sector (Lee & Abdul Raziff, 2021).</span>

<span style=”font-weight: 400;”>Additionally, the economic recession falls under economic factors, which refer to the macroeconomic conditions that affect consumer spending and business performance. The recession resulted in a decline in consumer spending, which affected Toys R Us’s sales (CNBC, 2018). It also made it difficult for the company to obtain financing, which impacted its ability to invest in new technologies and compete with other retailers. Furthermore, the changing demographic landscape falls under demographic factors, which refer to changes in population characteristics such as age, gender, income, and ethnicity (Momeni & Antipova, 2022). With the increase in multiculturalism, the toy market became more diverse, and Toys R Us failed to cater to the needs of diverse customers (CNBC, 2018).</span>

<span style=”font-weight: 400;”>The competitive environment falls under competitive factors, which refer to competitors’ competitive landscape and strategies. Toys R Us faced stiff competition from other retailers, such as Walmart, Target, and Amazon, which offered similar products at lower prices (CNBC, 2018). By categorizing this factor under competitive factors, it becomes easier to understand the impact of competition on Toys R Us’s performance.</span>

<span style=”font-weight: 400;”>The most significant factor that contributed to the downfall of Toys R Us was its failure to adapt to the changing retail landscape and the rise of online retailing. Toys R Us continued with its large-scale supermarket retailing model for over 50 years, which failed to provide a unique shopping experience. They also needed to catch up in the online retailing sector, which resulted in a loss of customers to online retailers such as Amazon. If they had invested more in online retailing and adapted to the changing retail landscape, they might have been able to retain their customers and continue their success.</span>

<b>Conclusion</b>

<span style=”font-weight: 400;”>Several factors contributed to the decline of Toys R Us’s commercial success, including the rise of online retailing, changing retail landscape, economic recession, changing demographic landscape, and competitive environment. Categorizing these factors into the main marketing environment components, the changing retail landscape and rise of online retailing fall under social and technological factors, and the economic recession falls under economic factors. In contrast, the changing demographic landscape falls under demographic factors, and the competitive environment falls under competitive factors. However, the most significant factor that contributed to the downfall of Toys R Us, in my opinion, was its failure to adapt to the changing retail landscape and the rise of online retailing</span>

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