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What Data Uncovers About Toys “R” Us and the Demise of Retail

The retail landscape is shifting rapidly, and while many are quick to tout the “death of retail,” the reality is that brick-and-mortar purchases still account for 90 percent of total sales.

Toys “R” Us is one of the most recent cautionary tales, and while it’s easy to blame competition from one-stop-shop competitors like Target and Walmart, our data shows that in many cities, Toys “R” Us wasn’t doing so bad.

Factual found that Toys “R” Us stores generally performed better in larger markets, while big box stores saw more foot traffic per store in smaller, more rural cities. This suggests that Toys “R” Us stores may have been performing unevenly – some did quite well while others failed spectacularly. Specifically, our data showed:

  • Toys “R” Us struggled most in smaller markets: On average, Walmart and Target saw 20x more foot traffic than Toys “R” Us in smaller markets such as Biloxi, MS, Tucson, AZ and Dayton, OH. (A smaller market is defined as one with less than 400,000 people.)
  • Meanwhile, urban Toys “R” Us stores got more visitors: In bigger markets such as Boston, Seattle and San Francisco, the average Toys “R” Us store got more traffic than the average Target or Walmart. For example, in Boston, Toys “R” Us saw 55% more traffic than the average Target, and 37% more than the average Walmart.

While there were many contributing factors to the toy chain’s demise, the data shows that Toys “R” Us actually had an edge on commerce giants in big cities, and could have used this insight to optimize marketing efforts (think in-store mobile offers) to reach these shoppers.

Further, it could be an indicator that the large market stores were well-placed, and other retailers may have an opportunity to capitalize on the now-vacant locations, opening brick-and-mortar shops in areas they know are well-trafficked. Perhaps even Target and Walmart, if they can fill the void.

Interested in more data insights? Read our previous posts here.