Jerry Storch, CEO of Toys “R” Us, is sick and tired of price-comparison surveys that claim Amazon.com, Wal-Mart and Target offer lower prices than the toy chain: It’s a bunch of malarkey, he says.
He’s even more annoyed by the perception these reports foster in the minds of consumers.
So this holiday season, when the big chains are waging a fierce battle to offer the lowest priced toys, Storch wants to set the record straight.
“This year we made it very clear that we’ll match anyone’s price,” he said. “We’re the toy leader … There’s no reason we should be under priced.”
To that end, the 875-store chain launched its first-ever price comparison guarantee program, and store managers have been even granted the discretion to match online retail prices, which can be lower than brick-and-mortar stores. (Not to be outdone, Target and Best Buy are also matching online retailers’ prices this holiday.)
Although Toys “R” Us’ Christmas selling season officially kicked off in October with the launch of its Big Book catalog, shoppers were distracted by Hurricane Sandy and the election, Storch said.
But this week “marks an inflection point.” And “Black Friday looks to be very large.”
As shoppers still grappling with a down economy are “focused on value,” Toys “R” Us has dived deeper into the deals this holiday season with its biggest Black Friday sale ever: Its 32-page ad boasts more than 200 door buster deals versus 150 last year, he said.
It’s also unfurling more online deals than ever for Cyber Monday, backed by its first national ad campaign for the e-commerce shopping spree.
The big message to consumers this holiday season: “We have more toys than anyone else, trained sales people to help you get the right toy for the right child … we have free layaway and we’ll match anyone’s prices,” Storch said.
And that’s not all.
In another bid to set itself apart from the competition this holiday season, the retailer introduced a toy reservation program, which allowed shoppers to place 50 hot toys on hold. The reservation list closed on Oct. 31 because the company wanted to be able to guarantee inventory.
“Now customers are calling us up now, kicking themselves because they didn’t take advantage of it,” Storch said. Although he called the toy reservation program “a great success,” Storch didn’t know if it would be revived next year.
And looking to gain business from mall shoppers this holiday, the retailer, which operates mostly freestanding stores, has rolled out temporary Toys “R” Us shops to 24 Macy’s stores, including the department store’s massive flagship in New York City’s Herald Square. The idea is to capture more impulse toy sales, Storch said.
These new plays for business this holiday season come as sales for the estimated $14 billion, privately held retailer have been stagnant for the past two years amid profit declines.
But that’s starting to change, Storch said.
For the fiscal year ending January 2013, profits for the U.S. business have grown due to “superior gross-margin management, great expense control and great toy sales,” particularly from learning toys like the LeapFrog line, construction toys from brands like LEGO and computer tablets, he said, but declined to disclose forecasts.
Despite flat annual sales, Toys “R” Us has managed “six consecutive years of positive comparable store sales growth in the U.S. during the month of December,” Storch said.
“These results build on prior years of growth during this important period for our business.”
Important indeed.
Retailers can generate up to 40% of their annual sales during the holiday season.
And this year, “We want to deal with the perception, once and for all, that people often assume because discount chains don’t have service and a limited [toy] assortment, that they must be cheaper. We don’t think that’s true.”
One thing is certain: The big chains are gunning for the toy business this season by unabashedly playing the price card.
According to a holiday toy pricing survey conducted this month by Citi that compared Wal-Mart, Target and Amazon, “Both Target and Wal-Mart are more aggressively cutting prices, as the companies try to drive traffic and grab market share during this holiday season,” with Amazon also cutting prices but trailing the discounters, Deborah Weinswig, broadlines retail analyst, said in a research note.
Based on a basket of toys surveyed on October 23 and November 7, toy prices dropped by 5.3 percent at Wal-Mart, 5.0 percent at Target, and 6.9 percent at Amazon during those last two weeks alone, she said.
But Storch says the numbers don’t tell the whole toy story.
For one, about 75% of the Toys “R” Us’ toy mix is different from chains like Wal-Mart, Target and Amazon, due to its sheer breadth and depth of assortment, as well as a growing inventory of exclusive lines from national suppliers and private brands.
And a side-by-side comparison of Toys “R” Us’ Black Friday ad to Wal-Mart and Target’s will show that “we have a huge number of toys no one else ever sells, and the majority of our products are not available in discount chains,” he said.
While the chain’s Black Friday ad is 32-pages, “our competitors’ ads are about the same length but include every [product] category that they carry,” he said.
When it comes to like product, “our prices are lower than anyone’s,” he said.
Some examples: For Black Friday, Toys “R” Us is selling the LeapPad 1 tablet for $59.99, undercutting Wal-Mart, he said.
And try finding the Masquerade dolls from those sassy Bratz for $9.99 anywhere else, Storch said.
The retailer is also selling Monster High’s new Abbey and Frankie dolls exclusively for 50% off at $12.99 – “another great example of [low] pricing,” Storch said.
Early Read on Hot Holiday Toys
As the season shifts into high gear, the hit products are already started to come into focus.
So far, Toys “R” Us’ holiday hot sellers include Skylanders video game action figures, the LEGO Epic Dragon play set, Monster High dolls — which draw on the seemingly insatiable appetite for all things ghoulish ala the Vampire-themed Twilight series — and the retailer’s new and exclusive Tabeo tablet computer created just for kids.
“Every time we get a [Tabeo] shipment in, it sells out,” Storch said.
At the same time, the new Wii U console is single-handedly reviving the lackluster video game business.
While toy experts say the explosion of digital devices has impeded kids’ appreciation for unplugged toys, “there is nothing electronic about [hot sellers like] Monster High and LEGO sets,” Storch said. Yes, “there is more electronic content in the toys they buy, but the toys don’t have to be electronic to be hot.”
Although retailers are kicking off holiday promotions earlier every year, Black Friday weekend remains the most telling predictor of how Toys “R” Us will ultimately fare during the make-or-break shopping season, Storch said.
“We’re making sure to be in-stock on the hot products, [have] great prices, service and a breath of assortment,” he said.
On your mark, get set …
Related on Forbes:
No hay comentarios.:
Publicar un comentario