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Different Leaders, Different Results: Modern Retail Requires A New View From The Top

CHICAGO, IL- Aug. 5th, 2019 In this report McMillanDoolittle details shifting consumer expectations across all retail categories – and the blind spots the leaders of both legacy retailers and digital natives must overcome as they adapt to an integrated retail landscape.

In Different Leaders / Different Results McMillanDoolittle estimates that consumers already spend $.45 of every dollar within categories where they expect their retailer to provide an integrated user experience, allowing them to make purchases and fulfill their transactions in the way that best suits their needs.  These retailers require a new set of capabilities – driven by a new leadership mindset – to provide an integrated consumer journey.

As consumer expectations have shifted, new winners have emerged. Target, Warby Parker, & Domino’s are retailers that top our list.  Meanwhile, some retailers that are just now opening stores are missing the opportunity to build integrated capabilities from a clean foundation.  Many Digitally Native retailers are rapidly opening stores but do not operate “as one” with their digital presence. The customer is not at the center.

Due to their heritage, both digital natives and legacy retailers have executive blind spots that can be barriers to effectively operating an integrated retail model.  McMillanDoolittle research found that only 7% of the leaders of digital natives come from traditional retail functions such as buying or merchandising.  Meanwhile, legacy retailers lack marketing-driven retail expertise, with only 5% coming from marketing and even fewer have technology or analytics expertise.  Both leadership profiles have their advantages – and blind spots. These legacy retailer and digital native executives can learn from each other to develop new models for leadership, customer-centricity, multi-channel shopping, and operations.

McMillanDoolittle forecasts that spending at integrated retailers will nearly double to $.86 of every dollar within five years. It remains to be seen which culture of leadership – and business model – can integrate more quickly to capture this share but doing so will be key to the future success of each.

McMillanDoolittle LLP is a retail consulting firm based in the U.S.A.  Since 1986, our team has helped retailers and suppliers worldwide to successfully navigate and conquer the changing retail marketplace.  There are only winners and losers in retail. Armed with decades of experience, an unparalleled commitment to your team, and play-making insights, McMillanDoolittle helps you win.


Business Wire – Official Press Release


Toys R Us Prepares for Its Final Curtain

The news swirling around Toys R Us these past few weeks is grim. The likelihood of all U.S. stores closing is nearing inevitability as the chain faces liquidation in the U.S. and other global markets, seeking buyers for its more sustainable operations in Canada, Asia and Central Europe.

I worked as a consultant for Toys R Us for a little over two years in 2014 and 2015. This work included strategy for the two U.S. brands (Toys R Us and Babies R Us) and culminated in the development of prototype Toy & Baby Lab stores which brought the fun back into Toys R Us and the emotion back into Babies R Us.  While the business as a whole was hardly thriving at the time, EBITDA was restored to very comfortable levels and comps were positive in these stores.  The problems of the company as a whole were not solved but there was some momentum to build upon.

Fast forward a few years later and the chain is teetering on the brink. Huge debt levels have always hampered the company’s ability to fund significant change. The new Toy Lab stores including a new Toys R Us/Babies R Us  Co-Branded store in Concord CA, while extremely effective, required capital that the company simply did not have. And, the competition in the form of Walmart, Target and increasingly Amazon remained relentless in using the category as a traffic driver with constrained margins.
Yet, there is room in the market for a great toy store, one that allows customers the sense of discovery and excitement, allows vendors to showcase a much fuller range of their assortments and offers customers prices that are “close” to an on-line proposition.

Like many retailers who are now facing an imminent Chapter 11, the story of Toys R Us’ demise was written long ago. Too many stores, boxes that are too big (or just right for only six weeks of the year), deferred capital expenditures, private equity ownership that brought about significant debt and some costly missteps (an early 2000 deal to partner with rather than compete against Amazon!) make the moment in 2018 seem almost inevitable.

A potential Hail Mary revolves around trying to salvage 200 or so of the best locations and tie the business to a more stable Canadian operation. Like many of us who grew up as a “Toys R Us kid”, there is only sadness associated with the demise of an industry pioneer. And, there are many thousands of associates who will no longer have a job—the human costs and ripple effects of a bankruptcy of this size cannot be underestimated. While its issues were many, it will be a less fun retail world without Toys R Us.

Neil Stern for Forbes