News & Insight

Maplin, Toys R Us and New Look: forget the past, and start imagining the future

Christian Nellemann

Last week, Maplin and Toys R Us fell into administration.

Last week, Maplin and Toys R Us fell into administration. This week, New Look has announced 60 store closures in an effort to avoid a total collapse.

Meanwhile, Byron, Prezzo and Carluccio’s are all facing well-publicised struggles, and House of Fraser is teetering on the edge.

The usual factors are being blamed – in most cases for good reason. Squeezed incomes can’t be ignored; rising overheads like business rates hikes are a factor; and parking charges continue to limit high street footfall.

Overexpansion is also a consistent theme. Despite spiralling debt some of these retailers are misguidedly expanding – Maplin was announcing new store openings shortly before announcing ‘crisis talks’. And in the case of New Look and many others, it’s simply a case of having too many shops.

But beyond these more obvious problems there is one piece that’s consistently missing from every one of these failing retailers: innovation.

A ‘magical place’ that’s decidedly un-magical

These retailers all still have strengths to build on.

Toys R Us, despite pressure from Amazon and online retail in general, remains very competitive on price. Maplin, despite often being far more expensive than its competitors, is well-known for knowledgeable service and is favoured by luddites. New Look meanwhile had an enviable reputation for offering low-budget quality, and a reasonably loyal customer-base.

And yet all are staring into the abyss. Dig a little deeper and you can start to see why.

Toys R Us’ decline correlates surprisingly closely with Smyths Toys’ growth – a success story built largely on excellent online and in-store experiences. Toys R Us’ ecommerce is outdated and clunky – and Smyths’ mirrors the kind of slick experience customers now expect. This was particularly apparent on mobile. More noticeably, the ‘magical place’ we expect to find in Toys R Us is anything but; their out-of-town walk-in warehouses feel cold and uninviting – it’s more like walking into a discount supermarket.

Maplin can’t compete with Amazon and other online electronics retailers – that’s a simple fact. Trying to do so half-heartedly, as they did, was pointless. Their only option was to ramp up their real USP – to help more uncertain users of technology with human, knowledgeable in-store support. Despite being the one, special thing Maplin could do, I’ve never seen it manifested as part of their branding – and that’s a missed opportunity.

And finally, New Look’s failings are obvious. Asos, Boohoo and Missguided are online-only fashion retailers growing exponentially. All are built on the idea of offering the best online experience possible, and all make it extremely simple to order and return items. New Look has simply been left behind – and its mass of uninspiring high street stores look increasingly redundant. They need to be reimagined, or they will all close.

Playing to a physical store’s strengths

In all these cases, improvements online are essential. But once that is possible, what is left for the physical store?

The store has to change. It has to give customers a new reason to go there.

Here’s a good example to end on that sums up where we are heading. Acustom Apparel is a men’s tailor in New York that looks fairly inconsequential. It’s small, and doesn’t hold much stock.

But at the back of the store there are 3D cameras that, in just 15 seconds, produce a body scan that gathers 2 million data-points. This 3D model then gives you pinpoint accuracy and the perfect fit. Your profile is saved and you can order as many perfectly fitted suits and shirts as you like, from anywhere in the world. This, naturally, creates the kind of brand loyalty most retailers can only dream of.

That is what innovation can do – and that is what playing to a physical store’s strengths is all about. The lesson for struggling retailers might not be easy, but it is clear: forget the past, and start imagining the future.


Christian Nellemann is the Founder and CEO of XLN, a provider of low-cost phone, broadband, energy and card processing services exclusively to small businesses. A serial entrepreneur, he’s a two-time winner of Ernst & Young’s Entrepreneur of the Year award and one of only 17 inductees into their Global Hall of Fame. He is passionate about small businesses, and is a featured columnist for Follow him on Twitter @christianxln