The bankruptcy filing of Toys “R” Us partially reflects tough competition with the discount giants, but the changing digital landscape appears to be the single most pressing challenge the retailer will face once it emerges from bankruptcy protection.
According to eMarketer’s Retail and Ecommerce database, Toys “R” Us has slogged through at least five straight years of revenue declines, even as its store count edged higher.
The company’s ecommerce sales rose 12.3% in fiscal 2016, the first double-digit gain since 2012. That put ecommerce at 13% of total revenues.
At that level, Toys "R" Us trails the ecommerce sales share for the toys and sporting goods category overall, according to Kantar Retail data. In 2016, ecommerce made up 19% of total toy and sporting goods sales in the US. Kantar projects that digital's share will grow to 28% by 2021.