In the latest case of retail brick and mortar stores struggling to compete in an increasingly e-commerce focused environment, US toy giant “Toys ‘R’ Us” has filed for bankruptcy in the middle of the run-up to the lucrative holiday season.

This is one of the largest speciality retailers ever to file for bankruptcy, and although they will remain open for now, and have received permission to borrow nearly $1 Billion to pay suppliers for their holiday season stock, there are serious questions about the future of the 1,600 stores and 64,000 employees.

Competing In A Digital Market

With significant corporate restructuring on the cards, there are still hopes that the chain will be salvaged, but as more and more consumers turn to the internet to do their shopping, they, like many other retailers, are struggling to get customers into their stores.

Among other things, they plan on including event spaces, increasing in-store staff for product demonstrations, and combining bigger stores with “Babies ‘R’ Us” stores in order to try and keep things viable.

The only company that sells more toys than “Toys ‘R’ Us” is Amazon.com, and because of over-heads, they can’t compete on that level.  Instead, they’re going to try and focus on the one thing Amazon can’t do…providing a showroom for their toys where people can actually come in, see them, handle them, and have them demonstrated.

But it’s a fine line, and there are analysts who don’t think that they can make it.

The Importance Of Being Online

Although very few (almost none in fact) of us are retailers on the scale of “Toys ‘R’ Us” or any of the other big brand retailers that have failed in recent years thanks to the ever increasing onslaught of the digital marketplace, there is still a valuable lesson in the failure of such big, well financed and well known brands.

The future of sales, of product and service research, of brand recognition, is online. You might not have to physically sell your products or services online, but if you don’t have an online presence that you manage effectively, there’s an ever increasing chance that your business is going to end up being sidelined by those who adapt more effectively to the digital first market.

It’s probably not something to worry about in terms of going bankrupt, but there’s no question but that it’s an important lesson to keep in mind.