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Toys ‘R’ Us Scares Away Customers, Giraffes

Posted By Robert Gorell On October 31, 2007 @ 4:30 pm In Customer Experience,Multichannel Marketing,Web Design,Word of Mouth | 3 Comments

Running to the competition [1]

Remember those commercials from the 80′s (“I don’t wanna grow up, because if I did, I wouldn’t be a Toys ‘R’ Us kid”)? Well, a lot of those kids grew up to be parents — and the thrill, as they say, is gone.

In our upcoming 2007 Online Customer Focused Excellence Study, ToysRUs.com [2] fared well below average. The study, which tracks 300+ online retailers, found several giraffe-sized disconnects in the customer experience; things that seem inexcusable for a click-and-mortar retailer with the budget and brand recognition of Toys ‘R’ Us. And with the holiday shopping season upon us, the company presents a feeling of doom for many parents who’ve come to rely on the store to pacify beloved, nagging children.

But they’re not just making things difficult online. Toys ‘R’ Us has a fundamental business problem. They’re scaring customers away — and not just because it’s Halloween. Joseph Jaffe explains the disconnect [3]:

See, here’s the problem. Toys R Us spends all this money on silly 30-second spots with talking giraffes designed to “persuade” kids to nag their parents to take them to the store, but the stores themselves are largely warehouses, void of life, talking giraffes and any experiential quotient whatsoever. If you’ve ever set foot in a Toys R Us, you’d know exactly what I’m talking about.

[...] Here’s the scary part. From what I was told, this (customers returning toys without gift receipts) happens roughly 12 times a week and when it happens, it’s typically Dad doing the returning; it’s typically on a Saturday and it’s typically a shouting match that ends in frayed nerves, expletives and threats never to set foot in a Toys R Us store again.

Try and do the math. 12 x 52 = 624 x 836 (according to the number of stores [4] in the US) = 521,664 unsatisfactory returns per year.

But wait, there’s more….

Now attempt to factor in “lost revenue” associated to a) frequency of transactions (conservative guesstimate of 4 x a year), b) dollar value of average transaction (let’s say $35) and c) word of mouth (let’s say an ultra-conservative pre-social media factor of 15), and you might just be looking at a number of $1.09bn which is either in play or at risk. fyi – Toys R Us’ 2005 revenue [5] was $11.28bn, so my numbers aren’t exactly Monopoly (or Linden) equivalents.

The sad thing is that the staff at Toys R Us really wanted to help me, but “their hands were tied”. The real sad thing is that had a suit from Corporate been in the store (a sighting equivalent to Hailey’s Comet), they would have whipped out their “key” and saved the day on an ad-hoc and unscaleable basis.

Whether Jaffe’s math adds up is another story, but it doesn’t really matter. When you kick mothers out for breastfeeding [6], ruin kids bikes [7], let kids eat lead paint [8], and upset people by not letting them buy what you advertise [9], you’ve got a brand that clearly doesn’t wanna grow up.

Ahh, the good ol’ days… [10]


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URL to article: http://www.grokdotcom.com/2007/10/31/toys-r-us-scares-away-customers-giraffes/

URLs in this post:

[1] Image: http://www.grokdotcom.com/wp-content/uploads/Robert/toys_r_us_advert.png

[2] ToysRUs.com: http://www.toysrus.com

[3] Joseph Jaffe explains the disconnect: http://www.jaffejuice.com/2007/10/the-disconnect-.html

[4] number of stores: http://www2.toysrus.com/about/

[5] 2005 revenue: http://www.forbes.com/lists/2006/21/biz_06privates_Toys-R-Us_B5X9.html

[6] kick mothers out for breastfeeding: http://consumerist.com/consumer/breastfeeding/toys-r-us-hates-your-boobies-200952.php

[7] ruin kids bikes: http://www.consumeraffairs.com/toys/toysrus_service.html

[8] let kids eat lead paint: http://www.clickz.com/3626988

[9] not letting them buy what you advertise: http://retailindustry.about.com/library/weekly/aa111699.htm

[10] good ol’ days…: http://www.youtube.com/watch?v=N8HMSf4O2FM

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