Sucharita Kodali of Forrester Research joins us to talk about the unfortunate demise of Toys 'R Us and her new book, "Toys 'R Bust: Reasons One of the Country’s Most Revered Retailers Collapsed".
About Sucharita Kodali
- Sucharita is a retail analyst at Forrester Research with a focus on online retail and technology.
- She once worked at Toys"R"Us and is writing a book called "Toys R Bust" chronicling the rise and fall of the retail giant.
Half the pay and a third of the productivity
- The Container Store theorizes that one great employee is worth three good ones, so they choose to pay 50-100% higher wages for their salespeople.
- Because of seasonal hiring and low pay at Toys"R"Us, there were low quality employees that were poorly trained and unmotivated.
- In a grocery setting, this results in errors like zucchinis in the cucumber pile.
- Many employees at Toys"R"Us were trained singularly and were unable to fill gaps and needs as challenges arose.
Rewriting the fall of Toys"R"Us
- Sucharita counters the notion that private equity ruined Toys"R"Us. They had been in a tailspin for years before private equity entered the equation.
- Toys"R"Us struggled to compete against a certain Seattle behemoth.
- After their deal with Amazon severed, Toys"R"Us moved to GSI's platform.
Writing a more perfect Toys"R"Us
- Could they have adopted a more customer-centric experience like Bonobos or Warby Parker?
- Could a more boutique shopping experience integrated with ecommerce fulfillment have worked?
- Despite a large array of interesting products in the toy market, Toys"R"Us received 50% of its inventory from just 20 vendors.
Amazon Prime Day
- It was shocking to see an outage on Amazon's site, let alone on Prime Day.
- There were more sign-ups on Prime than on any other day prior.
- Amazon seems to play by its own rules. Despite a bad first impression, they still had a huge day of sales and signups. This says a lot about their brand trust.
Speaking of Trust...
- Is Amazon at risk of being affected by anti-trust laws?
- Europe is cracking down. Will this reach the US?
- Marketplaces are incredibly easy to sell and there is not a lot of recourse or quality control right now. Many third-party sellers make false claims or deliver counterfeit product. Legislation could affect this soon.
Magento, an Adobe Company
- Adobe is a major force in the digital world, but they lacked ecommerce presence.
- Adobe's acquisition of Magento expands their reach much further.