Toys R Us, an ASX-listed online retailer, has achieved a 50% boost in onsite conversion rates following a upgrade of its ecommerce, marketing, and customer service technology.
Similarly, its sister brand, Babies R Us, is benefiting from improved product discoverability through personalised website journeys.
The integration of new, user-friendly platforms like Shopify has also allowed the toy retailer to seamlessly incorporate its latest acquisition, RIOT Arts and Craft, within just 30 days.
The technological and data platform investment is a key component of Toys R Us’s broader recovery strategy. Since the collapse of its US parent company in 2018, the brand has faced ongoing challenges and local losses.
For CEO Penny Cox, the focus on stability, scalability, operational efficiency, and enhanced customer management is crucial for revitalizing the business.
It’s been a pivotal year for ASX-listed pure-play retailer Toys R Us, as it aims to turn around its financial fortunes and shift from red to black on the balance sheet.
Some may be surprised to find that Toys R Us remains an active ASX-listed entity, operating three online-only brands: Toys R Us, Babies R Us, and Hobby Warehouse.
The current iteration of the brand emerged when ASX-listed Funtastic acquired the Australian arm of Toys R Us in 2019 and secured a license for the global brand.
However, the journey has been challenging. In the 2023 financial year, Toys R Us reported a loss of $32.6 million, following a 15.2% decline in top-line revenue.
For the half-year ending January 31, 2024, the group reported revenues of $9.2 million—a 54% decrease year-on-year (including non-continuing operations)—with activity losses totaling $6.58 million and an overall net loss of $9.55 million.
Since then, Toys R Us has secured up to $5 million in funding from Mercer Street Global Opportunity Fund II LP, and exited its UK business.
In March, the company acquired RIOT Arts and Crafts, a well-established Australian retailer with a 50-year history. RIOT boasts average gross profit margins of 36-50% and a customer database of 540,000, with average order values of $74.17.
Amid these financial and operational improvements, the company is also overhauling its technology and data infrastructure.
The upgrade includes transitioning from the open-source ecommerce platform osCommerce to Shopify, replacing MailChimp with Klaviyo’s marketing platform, and implementing the Gorgias customer service suite.
The transformation began with ecommerce, according to Cox, focusing on the core Toys R Us website, which accounts for approximately 80% of total revenue.
The site was successfully migrated within three months, in time for the Black Friday and Christmas trading seasons last year.
Moving to an out-of-the-box platform like Shopify represents a significant shift from the previous setup, where in-house web developers managed and built everything needed for the website.
“A lot of what we do is fairly vanilla e-commerce. We could get to the same starting point relatively quickly with Shopify,”
“From there, we have a platform we can do more things with like AI and personalisation. We have an ability to leverage those things much better than we did previously,” Cox says.
Over the past nine months, Toys R Us has experienced a remarkable transformation in its online performance achieving a substantial 50% increase in conversion rates for both its toys and baby product categories.
