Toys R Us and Maplin reaction: Can digital savvy make British retailers future-proof?

By Johan De Mulder

Wednesday was a bleak day for the UK retail sector as Toys R Us and Maplin, two of its most recognisable brands, faced up to the reality of administration.

3,000 jobs are at risk at Toys R Us UK, which operates over 100 out-of-town stores across the country, while Maplin, specialists in electronic goods, has blamed the drop in the value of sterling for its cession to administrators PwC.

Firms will continue to succeed and fail in a notoriously unpredictable industry, but these back-to-back revelations regarding two long-established traders will have retail leaders once again pondering the question: how can I make my business future-proof?

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One pertinent subject is e-commerce and the digitisation of operations. Pat Lynes, business transformation expert and founder of Sullivan & Stanley, believes traditional retailers often fall behind in satisfying customers' demands online.

"They haven’t re-engineered their operating model to focus on digital platforms and the customer experience," he says. "A lot of executives of these older corporations are sitting within organisational structures that were fit for the nineties and maybe the noughties, but aren’t fit for today’s rapid-pace, changing world. Without the ability to adapt quickly, sales will slide.

"It’s the same Blockbuster story repeating - how many others will be next? Businesses need to address the capability and speed gap and look ahead, working with the best people to solve their challenges."

While Toys R Us and Maplin each has a functioning e-commerce platform, it is likely that neither company has invested what is considered enough capital and expertise to make it a core function of their operations.

A recent study by e-commerce agency Visualsoft revealed this to be a big problem in the sector, with retailers falling short in areas such as page speed, payment options and general onsite experience. For example, 17% of e-retailers surveyed failed to optimise on-site search options to help drive sales.

"We found that worryingly large numbers are putting profits at risk by not following basic online principles," said David Duke, Visualsoft's Chief Marketing Officer.

"Rapid page load speeds, providing a range of payment and delivery options and maximising the social media opportunity are just some of the key considerations for online retailers in the 21st century. Essentially, if they can get the basics right, the rest will follow."

Other factors will have certainly hurt Toys R Us and Maplin, such as uncertainty over Brexit and falling levels of consumer spending. The adoption of technology, however, and the forming of a workforce skilled enough to utilise it remains one of the most relevant discussion points as the sector plots its roadmap for the future.

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