Helpful Employees at Toys R Us (and similar oxymorons)
By Rick Moss
If anyone has an understanding of what has made Target successful, it’s probably Gerald Storch, who joined the retail company in 1993 as senior vice president of strategic planning. His 12-year tenure there was regarded highly enough that many saw him as the likely next CEO, but his path led, instead, to the helm of Toys R Us beginning in February of this year.
TRU, having been acquired from shareholders in July 2005 by a private investor group, was looking for fresh leadership, specifically someone who understood the challenges of competing with Wal-Mart, the only retailer selling more toys than nation’s largest discount toy chain.
However, according to an Associated Press article, which includes his first interview since taking over, it’s not so much a “Target-ed” approach that Mr. Storch will pursue. Rather, as his new plans for change are revealed, it appears that working on fundamentals, such as improved store cleanliness, a better edited product mix, and enhanced customer service, will be the focus. (Yes…you read that correctly. We said customer service.)
“When a customer comes in our store, our people can tell them what’s a great toy for a 10-year-old boy for their birthday, because all we do is toys. When you go to a large, multiproduct discount chain, you’ll be lucky to find someone who can point you to the toy department, or will even take you there, much less answer specific questions,” said Storch.
If nothing else, Storch seems to be running straight at what have historically been TRU’s biggest problems in the eyes of customers. For example, by trimming lowest-selling items, in what may amount to a 20 percent reduction in overall inventory, and eliminating displays from the selling floor, Storch hopes to make product selection much easier.
“It actually looks like there’s more in the store when we unclutter it, even though there’s a little less,” Storch said. “You can see the dominance. When it’s so cluttered, you can’t even see two feet in front of you.”
Moderator’s Comment: Is Gerald Storch focusing on the right things in order to turn around Toy R Us? Can the chain successfully make the transformation
from its discount roots to become a customer-driven specialty retailer?
The third item on Mr. Storch’s agenda for remaking TRU is a concentration on catering to younger children. And (perhaps because he’s also the company’s
largest personal investor), he says he’s taking a personal interest in keeping up with trends by reading People magazine and other mass media pubs so he knows the “hot
stars” and “hot TV shows” that influence consumer attitudes.
But, overall, perhaps the biggest transformation that Storch could bring to the company is a mindset of a consumer-focused, specialty retailer. Toys R Us
has enjoyed the top spot among toy retailers for 27 years, but at no point did its “pile it high; move it out” approach endear it with consumers.
As a young parent, I remember the dread of making the periodic trip there to stock up on diapers. As a loss leader item, the merchandisers would position
the product at the far end of a labyrinthine floorplan, subjecting you to a virtual trial by fire of screaming kids, tumbling merchandise and parents one provocation away from
physical violence.
If Mr. Storch can transform the in-store experience so that parents WANT to go there, he’ll have taken one giant step in the direction of a brighter future
for the company. – Rick Moss – Moderator
Yes, the stores are cleaner and less cluttered and easier to shop — HOWEVER, they also have a lot less product and the only reason I would I would go out of the way to shop there was because they carried a deeper selection. The current selection is no better than Target’s, so why bother?
In the last week, I have accompanied an employee on store visits to the following outlets in search of these products:
1) Power Bars (snack food)
2) Lubricant for a Motorcycle Chain
3) Fluorescent Light Bulb
We went to at least two (and, in one case, four) outlets for each of these products.
In EACH case, we asked the person at the customer service desk if they carry the product and, if so, where to find it.
In each instance, we were told they did NOT carry it or were told the wrong place within the store (in two instances, the clerk or manager in the department where the product was eventually located was unaware they even carried it).
Maybe this is an extreme “run of bad luck” – but the stores were Wal-Mart, Home Depot, Stop & Shop and Shaws, all within a mile radius of each other – and in NO instance did the clerk offer to walk us to the product themselves.
Fix the customer service and employee knowledge and I believe the sales you capture that were already yours (we walked in to buy…no selling was needed…just tell us where it is!) will turn the tide in your favor!
Focusing on operations–the experience in-store–should be first and foremost. Inventory reduction, fewer SKUs, a focus on electronics, new signage, new lighting, etc. Heck, start with making sure the “R” in Toys “R” Us is lit up. Get rid of Geoffrey.
It all adds up to a return to fundamentals of making the shopping experience better. The stores are looking more and more like old Kmarts–the ones that have been shuttered….
Leon’s line about getting the “R” lit up made me laugh out loud. That was funny. And that’s a great example of what Mr. Storch is up against. I think his focus and priorities are absolutely on target. (Pun intended.) Now we all know the road to retail hell is paved with good intentions, so the proof will be in the execution.
As a father of two, I actually didn’t mind walking around the store but absolutely dreaded the checkout process. It never failed that I would have to stand in line since only one out of the 10 registers were open. It was usually staffed by someone who clearly disliked their job and I think disliked children even more. Now I do have to admit I secretly enjoyed it since I knew a visit to TRU was always good for another customer service horror story for my speeches and newsletters. But as they say, the fish always stinks at the head. So I do believe that if Gerald Storch brings in to TRU the right culture, and the right executive and mid-level management team, then he has a chance to pull off what he says he will.
I think Mr. Zahn may be expecting a bit too much from the employees at the retailers he visited. Good customer service costs money. You need smart, motivated employees and, unfortunately, they are not on sale at a low price like the products being sold in those stores. TRU is no different. If they want good customer service, they will not find it hiring $10 per hour types (or $15 per hour union stores).
I did visit Home Depot this past weekend. They have done something to turn up the customer service a notch; almost to the point of it being annoying. It was similar to the Publix approach but with the tactfulness/desperation of a used car dealership.
Yes, operating the stores better will help. Better assortment planning will help. But the big profit increase would come from gross margin increases propelled by exclusives, private label or not. Toys R Us hasn’t just got the Wal-Mart problem, it has the electronics problem. As more and more playtime is computer-driven, retail markup percentages get reduced.
At one time, Toys R Us was THE retailer to know. I knew them as both a consumer with small children and as a vendor selling computer software. If Toys R Us didn’t carry a manufacturer’s product, that product died. Toys R Us out-maneuvered, out-merchandised and out-sold all their competition. It was a fun place to bring the children and brought back childhood memories for the parents. It WAS a good shopping experience. Employees were helpful. Product was easy to find. In short, Toys R Us WAS an excellent retailer. Then something funny happened. They stopped offering service; it appeared as if they stopped listening or caring about the customer. If Mr. Storch is going to transform Toys R Us, then after cleaning up the clutter, he must start to listen to the customer and improve the customer experience. Then and only then will Toys R Us regain the luster it once had.
Why does everyone want to go head to head with Wal-Mart? Mr. Storch is right on. Don’t compete on price, compete on the experience. Target and Best Buy have done a good job of doing just that. Both introduced private label products aimed at THEIR target customers, providing value (which is not necessarily low price) and selections that bested Wal-Mart. Why couldn’t TRU do that too? It is not too late to save TRU and there are two leaders from Target and BBY that I think can do it. (see June 29, 2006 press release from TRU, Ron Boire, former EVP, Merchandising, BBY joins TRU as President).
One more area of focus that Mr. Storch might add to his list is buyer training and vendor relations. Would TRU be surprised to learn how many vendors inflate their prices in anticipation of erroneous and punitive back-end charges, inconsistent vendor support, private label cram-downs, surprise packaging changes, and overall adversarial tactics (all of which of course effect profitability and diminish competitiveness)?
The operative phrase is “WANT to go there.” Over the last 10 years, the overwhelming thing I hear about TRU is, “I hate to shop in those stores.” Mr. Storch appears to be the first executive at Toys R Us who “gets it.” I think he is right on the money.
Remember Larry Storch, the goofy corporal in the B&W TV series, “F Troop?” Great actor. Perhaps it’s in the genes.
My wife, kids, and I used to live in TRUs. And that was before they started selling diapers. It was like a theme park, with the kidlets allowed to run wherever and touch whatever. We collected action figures and Cabbage Patch dolls. We bought cute outfits and bikes and our first video game (my thumbs were so sore!). And not once were we helped by an employee. We did it ourselves (sometimes tripping over employees who were frantically restocking) and loved it. That was part of the attraction — Leave Us Alone! We never, ever relied or counted upon customer service. The key was, they had EVERYTHING!
Customer service, with someone to tell a parent what type of toy a 10-year old would like? Get real. Parents are not shopping, they’ve been dispatched to buy stuff from a list. Give those drones a computerized aisle guide. Better yet, send them to Amazon (oops, forgot).
Gerald Storch is focusing on the things that any responsible retail store manager would eyeball. He’s got to think bigger, like What’s The Attraction? To me, it’s EVERYTHING! Come on, Gerald, give it to us again.
Bernie Slome’s comments are absolutely correct. The way to really succeed today is to make customers want to go to your stores. And to do that, you’ve got to have people in the stores who want to help the customer, not just punch a clock.
Storch’s commitment to keep on top of industry trends is laudable. But to truly deliver what the customer is looking for, you’ve got to ask them. Opening up lines of communication with the employees and the customers, and developing real feedback loops to implement what’s learned should be one of his key initiatives over the next year.
I too remember when going to TRU was a delight. And I experienced the drop-off of customer service over the last 10 years or so. Today’s consumers have too many choices – you can’t expect them to put up with poor product knowledge, unenthusiastic employees, crowded displays or poorly kept up stores. If it’s not pleasant, they won’t come back, because there are too many other options from which to choose.
Here’s a suggestion for Mr. Storch. While changing the stores and the employee culture, how about adding an “Ask Me” button for employees to wear. To support it, TRU would need to develop employee communications covering major brands trends and demographic issues, such as what’s appropriate for a precocious 10 year old male interested in Japanimation. And he’d have to get employees fired up about wearing the button.
To be noted, all new CEO’s need to create a culture that will distinguish it from the past run down business/corpporation.
No difference here.
Add to this the need to create a consumer marketing effort, such as is done at Target, and you should be able to resurrect the business. Parents must be enticed to shop at the new Toys R Us, and Babies R Us, too. The latter maybe the sleeper.
It’s the magic of Walt Disney that is needed!
Hard work, but done before. Hmmmmmmmmmmm