Danish toy retailers are struggling with the pressure of online competition. Online toy retailer Coolshop decided to support the physical stores and introduced them to omnichannel strategies – with success.
Danish e-commerce venture Coolshop is the savior of physical toy retailers. Within the last year, Coolshop had joined forces with nine retailers, who were under fire from the online competition. And as Business Insider reports now, this move helped the physical stores to get back on their feet and thrive again. “The stores have experienced almost explosive growth since joining us, in some instances close to 50%,” Jacob Risgaard, founder and CEO of Coolshop explains. All of the nine stores “come from established retail chains, and they chose to become part of Kids Coolshop”.
Toy business is difficult these days. US giant Toys’R’Us filed for bankruptcy in September 2017, emphasizing the situation in the market. In the Nordic region, Danish market leader Top Toy is suffering as well, according to Business Insider. With a loss of DKK 39 million last year and two CEOs in two years, the future appears bleak for the company. “The problem for these retailers is painfully obvious; online shopping keeps growing, and the physical stores find it hard to compete”, writes Business Insider.
Physical Stores Need to Adapt
Coolshop itself is one of these online competitors that pressure the physical stores. Jacob Risgaard is adamant that physical stores won’t go away, but need to adapt in order to survive. Treating online and offline as two separate entities is how most retailers still think. But Coolshop wants to do things differently and open up the possibility of omnichannel selling to the physical retailers. The cooperation gives the retailers a share of the online sales in their area and they get valuable information from it. For example, the data enables the companies to recognize trends.
When it comes to pricing, the physical stores profit from the cooperation as well, as Risgaard explains: “We have become one of the main buyers on the market now, enabling us to get the best and latest products at very competitive prices. That has especially benefitted the physical stores because they can now match or surpass the product selection of the larger chains.”