Analysis: Toys 'R' Us dies, Amazon thrives
If you haven’t heard, Toys "R" Us is officially closing its doors forever after the company’s September bankruptcy filing was followed up by a financially disappointing holiday season. Parents and children across the country are mourning the loss of such a beloved chain (though apparently not beloved enough for people to actually purchase its products).
For the many Americans who apparently associate the store with something other than their mothers driving them past it on the way to boring errands, the last few days have been full of nostalgia for a time spent poring over the store's extensive collection of toys. Or, more specifically, for a time spent poring over a physical collection of toys. Though the final nail in the Toys "R" Us' coffin has been more credited to its $5 billion debt (and the related shirking of store staff, upkeep and improvements) than competition like Amazon, it’s hard to argue that online shopping didn’t drag on their profits. Amazon specifically has been a thorn in the toy chain’s side since their failed partnership that ended in 2006 after six years of tension and lawsuits when Amazon refused to stop selling the products of Toys "R" Us’ competitors on the side.
Not only was Toys "R" Us left alone with all the normal problems that troubled traditional retail chains in the burgeoning digital era, but they had inadvertently created their own competitor and taught it how to outsell them by undercutting their prices. Not that Amazon wasn’t pretty good at that already—CEO Jeff Bezos didn’t become the richest man in the world by building his company on honorable business decisions. The workers in Amazon’s warehouses are infamously overworked and underpaid, and the company has been found data mining user sales in order to undercut their own marketplace sellers much more recently than their original issues with Toys "R" Us.
So while it’s true that the latest and last Toys "R" Us CEO David Brandon cannot be absolved entirely from the misfortune of the 31,000 employees losing their jobs with no severance package, Amazon’s early-2000s sabotage of the company and general domination of the market makes it difficult to set the blame on Toys "R" Us’ internal issues alone.