By Hugh Stevens, head of strategic growth, LiveRamp
The recent announcement that beloved brand Toys ‘R’ Us will be returning to the UK market after three years was met with excitement by many up and down the country, after it completely ceased trading in the UK in 2018.
The retail landscape has changed dramatically since the days when Toys ‘R’ Us was a major retailer in the 80s and 90s. The boom on ecommerce and online retailers and the struggle of the UK high street has been ongoing for years, but was undoubtedly accelerated by the Covid-19 pandemic, with the forced closure of shops for months at a time being the nail in the coffin for many beloved but struggling brands.
Everyone was forced to adapt to survive. Some, such as the Arcadia Group, could not keep pace and went into administration, but not before the jewel in its crown, Topshop, was snapped up by online retailer Asos, whilst others, such as Gap, decided that closing all UK physical stores was the only way forward.
The consequences of the shifting retail landscape is something Toys ‘R’ Us knows all too well. The company entered into administration back in 2018, but after a successful relaunch in Australia it has announced it would be returning to the UK, focusing on both online shopping and physical stores.
Toys ‘R’ Us is not the only retailer putting investment into physical stores. House of Fraser just announced a huge redevelopment of its flagship store in London, completed with a 360-degree view restaurant at the top and office space. Amazon has opened several stores in London that are harnessing new technologies to create a novel experience of no checkout. Tesco have also gone down this route, trialling innovations to make the in-store experience as seamless as possible.
Toys ‘R’ Us is approaching its return in the same way, hoping to create an experiential offering in their stores that entices people to come in rather than shop online.
Whether retailers are re-entering the market, like Toys ‘R’ Us, or simply adjusting to the new normal, lessons learned from the online shopping boom must be applied across both channels. Specifically, retailers are learning that customer data and insights are increasingly valuable in store as well as online.
Amazon, for example, is using first-party data to choose what to stock on their shelves. Their new gadget store in the Bluewater shopping centre is only stocking products that have been reviewed by customers as four stars or higher. This is not only a clever business move, but it is also an excellent PR approach to customers who will feel reassured that the products are approved, useful and popular.
When it comes to digital, there is nothing more crucial than first-party data for the future success of these retailers. Building a detailed picture of your customers and insights into their wants and needs, is something that online retailers have done successfully over the last decade. It may have taken a while for more traditional brands to catch up, but they are in no doubt of the power of data and the effectiveness of the targeting and measurement that comes with it.
The timing couldn’t be better. These retailers’ new approaches to physical sales reflect a big change that will heavily affect the way they sell online: Third-party cookies that allow retailers to track potential customers from site to site will soon disappear, altering the digital marketing strategies that brands have built up over the last decade.
Furthermore, the changes to Apple’s IDFA – new rules which give individuals the power to opt out of cross-app tracking on its devices – are also a blow to retailers and brands who have utilised this until now. While these are important changes that need to be made for the benefit of consumer’s privacy in the long run, in the short term, these changes mean that retailers need to change the way they find new customers and market to them.
Many traditional retailers likely already have a wealth of data that is not being utilised to its full potential, and by investing in a privacy-first, secure data collaboration framework, they can transform this wealth into actionable insights. Furthermore, by partnering with brands, who are also embracing first-party data strategies, retailers can expand their knowledge of their customers and ability to engage them. As brands also embrace privacy and transparency with their customers, secure data partnerships offer the ability for retailers and brands to collaborate while keeping the data – and their customers – safe.
A lot has changed since Toys ‘R’ Us’ heyday, but the company has a chance to give itself staying power – as do many other retailers currently searching for a sound strategy moving forward. By employing a successful first-party data strategy, applying the learnings in stores and online, and investing in data collaboration technologies with the brands it stocks, the company can future-proof its business for the long-term.