The New York
Money & Business
Sunday, September 5, 1999
Mr. Potato Head In All the Wrong Aisles
'R' Us, Advice On getting it Right
By Dana Canedy
It was one of
the first and biggest of the "category killers," and in
the early 1990's, it expanded as rapidly as a 10-year-old in a growth
Us conquered the toy retailing world with warehouse-style stores,
heavy promotion and lower prices than its mom-and-pop or department-store
competitors. The doors were barely open on new stores before they
were packed with minivan-driving moms clutching Christmas lists
and youngsters with allowance money.
But Toys "R"
Us has hit an awkward stage. Parents have grown weary of dragging
children through its 1,400 huge, often chaotic stores. Wal-Mart
has taken aim at it with cut-rate pricing. And the Internet has
emerged as a way to buy dolls and toy trucks from home with fewer
have thrown Toys "R" Us into disarray. Last week, the
company abruptly announced that its chief executive, Robert C. Nakasone,
had resigned. He was the fourth senior manager to depart this year,
as the company's profits declined and its foray into Internet retailing
How can the
company get back on track? A spectrum of business experts and everyday
consumers offered their suggestions last week.
founder and former owner of Cap Toys, a $100 million company in
Napa, Calif., that makes Stretch Armstrong toys and Spin Pops; the
company is now part of Hasbro.
thing they have to do is get the management picture correct. In
toys, you effectively need co-management: a very strong toy merchandiser
and a very strong business manager.
just hire someone from General Electric and put them in charge of
toys, because they don't know the toy business. But you can't just
take someone who is a super merchandiser and tell them to turn the
company around when he really has no experience in it."
Us, he said, "has really been jumping back and forth between
running it with an operations guy or a merchandising guy, and going
to extremes that don't work."
Mr. Osher would
also urge Toys "R" Us to commit to hiring better workers.
"Toys 'R' Us now is going to have to go from being pretty much
a nonservice business and having people work the floor for about
two weeks, to a family-trained service business where people take
pride in taking you through the Toys 'R" Us experience."
Mr. Osher thought
the company needed to rethink its use of real estate. "They
are going to have to expand their electronics department,"
he said. "They are going to have to really combine the Babies
'R' Us and Toys 'R' Us locations to get more from the real estate,
and make it more of a happening. Be the Starbucks for kids."
co-producer of "The Rugrats Movie" and senior vice president
for creative of Klasky-Csupo Inc., creators of "Rugrats"
and other animated TV series.
about our culture is experiential now. It's fascinating when you
see stores that create an environment that draws you in, like a
thrill ride. That's what we do with our shows, and shopping has
to be similar. I love it when you go into a store and there's something
has figured this out. In their parks and their stores, you are having
an experience even when you are waiting in line. Always there's
a narrative. And Viacom has a store in Chicago that's really great;
it's a fun experience walking through each of their cable channels.
If you are going into a Toys 'R' Us store, it ought to be worth
30, married mother of Emily, 4, and expecting a second child in
December. She lives in Bergenfield, N.J., a 10-minute drive from
the company's headquarters in Paramus, and says she is a former
Toys "R" Us shopper.
sort of amazed that the stores that senior executives are most likely
to pop into unannounced, because they are so close to their headquarters,
could be so unpleasant to shop in. The aisles are cluttered, the
service is mediocre at best and I find the stores to be rather dirty.
I have to imagine if the stores near the headquarters are like that,
it's somewhat representative."
If she were
in charge, she said, "I would clean up the stores and make
them more user-friendly." Checkout lanes should move faster,
she said, and "it would be nice if somebody smiles and says
'thank you' after I pay them. I don't even get a grunt."
in customer service are needed to bring shoppers like her back to
the store, she said. Instead of the blank stare she once received
when she asked for help finding a Mr. Potato Head and a Barbie item,
she said, "it would be really helpful if someone came to the
aisle to show me where it should be."
have to imagine they can check the computer and tell me if it's
in stock, or call another store to see if they have it," she
added. "If they really wanted to be great they would take my
a 10-year-old in fifth grade in Shaker Heights, Ohio, and a frequent
Toys "R" Us shopper whose most recent purchase was a Nintendo
Asked what he
would do to make the store more appealing for parents and children,
David said: "Have a computer somewhere, so you can type in
what you're looking for. And, probably, make it bigger, and have
lots of toys from the year 1991 or, like, old toys from the 80's
and early 90's. Usually you can't find those kinds of things anymore.
probably put in a lot of toys where you can look at what they can
do, and test them out to see if you like them," he added. Children
would buy more toys that way, he said, "because they would
know what they're getting."
David said the
store had lost more ground with adults than with children. His mother
avoids the place, David said, and his father takes him "mostly
because I'm the one who mainly like to go."
professor of marketing at the University of Southern California.
"If I were
Toys 'R' Us, I would try to be sure that toys I was selling did
not also go through the likes of Wal-Mart. I would want certain
exclusives and tie-ins with popular movies.
hard for a store with a limited line of merchandise to make it when
it has to be a special shopping trip to get there. It would certainly
be possible for them to extend beyond the toys they now carry; perhaps
items for adults, the kinds of things that are sold at Sharper Image,
or computers and electronics."
Jo Ann Farver,
a professor of developmental Psychology at the University of Southern
California who has shopped at Toys "R" Us for toys to
use in her research with children.
A shift in product
mix toward toys that challenge and develop children's imaginations
could help the chain, Ms. Farver said. "The kind of stuff they
sell is boxed Playmobil toys and Barbies," she said. "They
don't sell much that is educational. Instead, they have a Barbie
that you can put clothes on, or a Playmobil pirate ship. There is
not much room to improvise."
If there were
a way for children to touch and try out the toys, she said, "when
a kid actually looks like they are enjoying a toy, parents will
but it. It's marketing."
Sid Good, president
of Good Marketing, in Cleveland, which specializes in marketing
advantage Toys 'R' Us has is large locations, so they have the opportunity
for unique promotions or events that bring families in. Because
as much as Mom and Dad might not want to go back, the kids are excited
and want to go to Toys 'R' Us.
get there, it has got to be fun to be there. That might include
play areas for kids, not only to try out toys but also to watch
videos or any other entertainment they might provide. And it might
include any kind of food court, something to make the visit that
professor of marketing at the Kellogg Graduate School of Management
at Northwestern University.
they need to find some way to convey that they stand for something
in the mind of consumers that makes them special, something that
makes the experience of shopping there meaningful, or some concept
that says 'this is different.'
do that by creating displays, altering their layout - setting the
store up more for interaction in particular is a good way to create
a difference from the Internet. Just create something other than
tripping over stuff in the aisle and kids running around grabbing
stuff off the shelves."