Customer Reviews Predicted Toys “R” Us Bankruptcy

Toys “R” Us just filed for bankruptcy after years of decline. Wall Street analysts weren’t the only ones predicting this doomsday scenario for Toys “R” Us though. Its customers also predicted its downfall, and they made this crystal clear through their online reviews.

The reasons for the failure of Toys “R” Us are many. Amazon and online retailers continue to grow in market share and encroach on local “brick and mortar” retailers. Toys “R” Us had excessive corporate debt. The market for physical toys is facing ever-increasing competition from digital products like video games that can now be bought online. And so on and so forth….

But regardless of the reasons, as the saying goes, “Revenue solves all problems.” And where does revenue come from? Customers.

So what have Toys “R” Us customers had to say about the company in the lead-up to its bankruptcy?

A quick look at the Yelp rating for the Toys “R” Us headquarters shows that just a few customers bothered to rate the company’s corporate headquarters, not just their local store. And 2 of them gave the company 1-star ratings while the third gave it a 5-star rating…for a total ranking of 2.5 stars. Remember that well over half of all Yelp reviews are 4 or 5 stars, so a 2.5 star rating is quite bad.

Toys "R" Us Headquarters Gets Bad Yelp Rating

But that’s only 3 customers. Hardly statistically significant. And what about the customer experience in local stores?

Well, let’s look at the local stores surrounding the headquarters. One might think that any stores in the nearby area surrounding the headquarters would be the “gold standard” for other stores across the country, since employees from headquarters would routinely visit these stores.

Turns out that the local stores in the surrounding area around HQ didn’t fare much better. And in fact they paint a fairly consistent picture with every store having a rating of exactly 2.5 stars or 3 stars…or not having any ratings at all.

Local Toys "R" Us Stores Near Headquarters Show Bad Reviews

And what about Google reviews? Do they agree with Yelp reviews?

Amazingly, Google reviews lines up exactly with Yelp, giving the company’s headquarters the exact same 2.5-star rating. But Google gives a little more statistical significance to the rating with a respectable 93 customer reviews.

Toys "R" Us Headquarters Gets Bad Customer Reviews on Google

What’s the takeaway from all of this?

If you’re an owner or manager of a local business, what can you learn from the demise of this corporate giant?

Our viewpoint is simple: Nothing is more important than the customer. And when you lose sight of making customers happy, you start going down the path to “bad stuff” happening…like Toys “R” Us and just recently, the Equifax security breach, which was also predictable from Equifax’s bad customer reviews.

And there’s plenty of evidence that Toys “R” Us was no longer customer focused.

Toys “R” Us didn’t even bother to claim their own headquarters Yelp page. So the page had no background image, no photos of stores or other branding, no replies to upset customers leaving 1-star reviews, nothing. Just crickets….

And the Google profile for Toys “R” Us is also very telling about how little Toys “R” Us cared about its customers’ feedback.

Toys "R" Us Google Profile Shows Lack of Customer Focus

Notice that no one from Toys “R” Us bothered to add business hours or even a website link to their store locator.

Also notice the “Own this business?” link? This means that no one from Toys “R” Us ever bothered to claim the information shown in this profile.

Again, the moral of this story is quite clear: Care about your customers. Actively listen to them. When they’re happy, celebrate that publicly on review sites. When they’re not completely happy (even if they’re just “modestly” happy) get their feedback, learn from it, and make improvements. Perhaps if Toys “R” Us had cared a bit more about listening to what their customers had to say (which was rampantly clear from their online reviews) they wouldn’t be filing for bankruptcy today.