When we think of toys, the first name that comes to us is no other than Toys R Us. A toy retail leader globally that has had to make the right adjustments to stay ahead, especially with more and more online competitors racing for market position. This is where Toy R Us decided to shift its focus last year, and for their web business, it's working.
Internet Retailer reported how the toy store's numbers from last year affirms it is on the right track on the web. Online sales went up to $1.23 billion from $1.15 billion in 2013, which is a 7% increase. Online retail represented 10% of Toys R Us' total sales versus only 9.2% in 2013. Toys R Us achieved the web sale improvements it was after, yet not the in-store sales to match, which decreased in the US by 1%. Store sales did increase by 1.8% internationally. As a whole, total sales in 2014 went down by 1.4%, from 12.54 billion in the year prior to $12.36 billion. This has called for changes by Toys R Us in order to do better this year.
Toys R Us CEO Antonio Urcelay commented to investors and analysts on all the changes the company has made to compete on all fronts. "We also made significant process and organizational improvements, addressing a number of important executional issues. As a result, during the year, global Internet sales continued to grow, benefiting from our strengthened omnichannel fulfillment model, U.S. margins improved due to disciplined promotional activity and inventory management, and customer satisfaction metrics confirmed that changes we have been making provided a better shopping experience in-store and online.”
One interesting figure from the report is the percentage of traffic Toys R Us is getting online. It stated that mobile growth is the most important driver of e-commerce traffic for the toy retailer, with 57% of its' digital visits have come from a mobile or tablet device. More shoppers have become comfortable with shopping online and even view it as a preferred way to shop, in addition to the ability to utilize a same-day courier like A1Express to get their products delivered fast.
The holiday season is big for every retailer and will be no different for Toys R Us, as the toy company plans on being ready to capture more sales this year. In the Toys R Us presentation, executives stated, “In the coming year, the company plans to further strengthen its omnichannel capabilities, including in-store pickup and ship-from-store execution, especially during the peak holiday season”. The more options for the customer, the better for any retailer to gain ground during the holidays. A number of retailers, including Toys R Us, have partnered with a courier to offer same-day delivery as a ship-from-store method.
Online retail is expected to grow to $500 billion by 2018. Couple this with technology advancements, and itseasy to see how e-commerce is the sure direction for any brick-and-mortar retailer to heavily invest in. A1Express is a New Jersey Courier that services nationwide and can aid any retailer meet the rise in on-demand delivery by shoppers, even fast shipping from Toys R Us stores.
Reference: 4.15.15, www.internetretailer.com, Bill Briggs, Web sales grow, but total sales dip for Toys R Us in 2014