Can SMBs Survive the Toys-R-Us Bust?

Toys-R-Us, America’s largest independent toy seller, and what seems to be the final retail domino, has fallen.

This likely didn’t come as a surprise. Over the years, we’ve become almost desensitized to giants like Macy’s and Sears busting.

Toys-R-Us’ bankruptcy has a widespread and severe impact, especially on its 30,000 American workers.

Hasbro and Mattel, who sell most of their goods at Toys-R-Us locations, will be affected by store closures. Analysts estimate Toys-R-Us accounts for 11% and 9% of their sales, respectively.

Hasbro and Mattel, who sell most of their goods at Toys-R-Us locations, will be affected by store closures. Analysts estimate Toys-R-Us accounts for 11% and 9% of their sales, respectively.

They’ll have to find a new home for their products, or, as rumors suggest, they’ll have to merge.

Small businesses have it even worse.

Large corporations like Hasbro have the resources to easily expand to new markets; a luxury that small businesses literally can’t afford.

Many small businesses chose Toys-R-Us as a safe spot to sell their toys. A great bet, considering their tenured history of dominating the industry.

The bankruptcy means that small businesses will have to look elsewhere as well, with not nearly as much capital as larger corporations.

It’s estimated that Toys-R-Us’ bankruptcy could cost small businesses up to 40% of their overall business.

Hasbro and Mattel may end up selling at Walmart and Target, but these retailers sell a variety of goods, with limited space for toys.

Walmart would likely choose an established corporation like Hasbro or Mattel over a small business from Delaware. That leaves small businesses searching for ways to sell their inventory.

It looks grim, but there’s a way out of this for every business, big and small.

Adapt to Survive

Luckily, adapting is what small businesses are all about, and failing to do so is what brought these retail giants down to begin with.

Much of the retail world has gone digital, and this could be a chance for small businesses to snatch up some market share.

inbound marketing

Upping your online presence as a small business requires omni-channel marketing.

You have to advertise on every channel, while ensuring that the customer experience on each platform is seamlessly integrated and comprehensive.

Many of today’s consumers view more than one communication channel before deciding on a purchase.

Some may read a product review on a phone before watching a product demonstration on Youtube, which is when they’ll visit the store and check the flyer to see if it’s on sale.

The best place for small businesses to sell their goods today is likely Amazon. With premium shipping and convenience, there isn’t another business out there that is fulfilling consumer needs quite like Jeff Bezos’ creation.

Small businesses are flexible, but going 100% online could bend your business until it breaks.

Band of Businesses

Small businesses may see large corporations as the enemy, which makes a lot of sense.

Larger corporations got all of the support and resources, nearly infinite capital, and customers that are easily earned through years of advertising and campaigning.

But small businesses aren’t the only ones that are hurting from the fall of Toys-R-Us.

Hasbro and Mattel need to adapt to survive, just as small businesses do. They may have a better chance of partnering up with Walmart and Target, but doesn’t mean that they’re safe.

If there’s a positive to take from the Toys-R-Us collapse, it’s that businesses are far more wary of putting their eggs in one retail basket. This benefits small businesses greatly.

One way for Hasbro and Mattel to ensure that they’re never stuck with a failing business partner is to diversify their portfolio.

Small businesses may choose to sell their toys themselves, as a way to adapt to the evolving market.

Hasbro and Mattel could sell their goods through multiple small businesses as well, limiting their risk and broadening their consumer demographic. It also allows them to be flexible in their business relations, so they aren’t tied to one major retailer with no freedom to go elsewhere.

The fall of Toys-R-Us, and other behemoths before it, changes the retail space. But that doesn’t mean that small businesses should close up shop.

Small businesses are tenacious, relying on flexibility and innovation to compete with giants.

They have to migrate with their consumers, and give them what they need, how they need it.

Plus, they have to find every advantage imaginable, whether it be marketing, pricing or technology. Anything to give them an edge on the competition.

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Plus, we provide small businesses around the world with the resources and tools they need to survive in today’s global market.

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