Toys R Us Multichannel Strategy
Toys “R” Us is Britain’s and the world’s leading family leisure, baby care and toy megastore with outlets in the UK and over 1500 stores worldwide in 33 countries. The retailer was founded in the UK in 1985 with the opening of 5 stores and it has since grown rapidly. In 1996, Toys ”R” Us became the first national retailer to launch an e-commerce solution and two years ago the company launched the fourth version of its popular website, this time underpinned by the hybris B2C Commerce platform.
The website reflects Toys”R”Us determination to deliver fun and convenience online and features approximately 10,000 products at any given time. These range from toys to computers to pushchairs. In addition, tens of thousands are stored in a back-end catalogue supported by hybris, and available to upload onto the website. The objective for Toys “R” Us is to ensure that the website is intuitive, easy to navigate and fully supports customer requirements.
Implementing a multichannel strategy
A survey carried out amongst customers in early 2010, showed that improvements to the Toys “R” Us loyalty scheme were necessary to improve customer relations, particularly when considering that the retailer’s best customers were those that joined the loyalty scheme. These improvements, together with the aim of launching a Click and Collect service before the peak season started in Autumn 2010, became two of the key objectives behind Toys “R” Us’ new multichannel strategy in the UK. Supporting a multichannel approach is important to Toys “R” Us globally, and in the UK it was decided to implement multichannel by building on the hybris platform to deploy three core features. Crucially this involved only minor technical changes, but still allowed the retailer to bring significant improvements to its online offer. Click and Collect functionality was a core requirement. This enables customers to browse the Toys “R” Us range and reserve a product, if it is available in-store. Within three hours the customer will receive an email or a text to let them know that the product is ready to be picked up.
Because the hybris platform was already in place, Toys “R” Us was able to simply take inventory data from the stores and feed it into the hybris solution which then pushed it out to the website front end, providing a link with the newly designed Click and Collect basket. The Toys “R” Us loyalty scheme comprises the Gold Card & Mother & Baby Club. This is very popular with customers, who receive vouchers or special offers. Historically these could only be redeemed in-store, but by adding a new feature, customers can now redeem vouchers with their online purchases.
To further improve the loyalty scheme, a real-time link was established between the website and the loyalty scheme database. These were previously managed separately, with details collected by customers manually completing forms in-store or submitting by post. Work was carried out to build a link between the two information repositories so that customer details could be synchronised. Now, when customers come to the website and register their loyalty card, the information is checked for accuracy, and overnight feeds of data ensure that all customer details are updated and synchronised on both databases. There was no need to re-code the underlying platform; instead, Toys “R” Us worked with Neoworks, a hybris partner, to use the existing tools and flexibility of the platform, which reduced the time it took to complete the project to just three months, delivering significant benefits to the retailer.
Richard Hobbs, technical lead on the project at Neoworks, said: “Neoworks and hybris worked together to build the Toys “R” Us UK website; leveraging the flexibility of the hybris platform and our UK ecommerce experience to create an extensible system architecture from the outset. This architecture and the inherent flexibility of the hybris platform have enabled us to deliver on Toys “R” Us’ multichannel expectations without business disruption and on short project schedules.”
The key objective of these developments has been to improve the experience for the customer, enabling them to manage their online shopping and loyalty account simultaneously through one single point of contact and to deliver a multichannel offer that allows customers to choose where and how they shop.
With the technical developments completed so quickly, Toys “R” Us was able to launch Click and Collect in October 2010 to take advantage of the pre-Christmas selling period. The response from customers was hugely positive.
Will White, Head of e-commerce at Toys “R” Us, said: “From the day it became available, customer take-up of Click and Collect was instant. It was intuitive, making it easier for customers to use. The success of it can be seen in the number of customers who are now buying online, it has doubled our overall conversion rate. The voucher scheme enabling customers to redeem their points online was implemented in February 2011 and the major benefit of this is that it provides customers with a choice of where and how they shop with Toys “R” Us. Will White continued: “We are seeing some fantastic numbers in terms of customers shopping both online and offline who will still benefit from their loyalty points, regardless of where they make their purchase. Many customers are now using both channels where previously they had used just one. We have also noticed that visitors to the website have increased by at least 20% in the last 12 months.”
With the link between the loyalty scheme and the website in place, two significant benefits are clear. The registration process is more straightforward and immediate, with customers receiving their virtual information pack and loyalty card immediately. Previously the card would take 6-8 weeks to arrive. In addition, the loyalty card database was being generated from applications made in-store or at home and posted which resulted in incomplete forms leading to a lack of accurate customer data. By offering customers the ability to register their card online, (they can still complete forms in-store if they wish) accurate and more detailed data can be captured.
Will White said: “Customers who register online are more likely to shop online, and sending a plastic card was often pointless. By producing fewer cards our production costs have gone down and there are environmental advantages. Easier registration has also resulted in a significant increase in the number of customers using the loyalty scheme, and providing accurate details, which helps us to tailor our service to customer needs and has brought down the cost of administering it.” In the past 12 months Toys “R” Us has focused on building a multichannel offer that meets with customer requirements, delivering solutions that allow them to shop and interact with the retailer in the way they want. Using the existing hybris platform to implement Click and Collect, improve the flexibility of the loyalty scheme and co-ordinate data has improved the service for customers, delivering tangible benefits. “This approach is reaping dividends all round and we will continue to develop our multichannel strategy to ensure the customer experience is easy and fun” concluded Will White.