The Toys "R" Us Brand Renewal Story

Warren Kornblum is Executive Vice President/Chief Marketing Officer for Toys "R" Us, Wayne, N.J., the largest specialty retailer of toys in the world with nearly 1,600 stores in 26 countries. Kornblum is slated to deliver the Thursday, Dec. 4 keynote address at the 2003 P-O-P Show/New York. He will discuss ways in which Toys "R" Us is reinventing itself in his address, "And the Beat Goes On! The Toys "R" Us Brand Renewal Story." A Q&A with Kornblum follows.How is Toys "R" Us changing?We believe Toys "R" Us needs to epitomize all of the wonderful things that a specialty retailer should be. It's about expertise, guest experience, and the broadest and deepest assortment in the business, and it's about making sure that we fulfill our customers' aspirations for value. We also need to get our message out in what I describe as an intrusive but not invasive way. We articulated a five-point strategy to help us reach our goals:Content. What do we sell and how do we differentiate ourselves in what we sell? We want to be known as a place for innovation and the introduction of new products, and for toys, be it pure fun or educational, so that mom feels comfortable and confident that Toys "R" Us is the place to go. Guest Delight. We've spent a lot of time elevating the way people are treated when they walk into a Toys "R" Us store and are using the feedback we're getting from our guests. We've made a lot of progress but still have a long way to go. Presentation. This is the nuts and bolts of what I will talk about at the show. What is the physical presence of the stores? We'll look at what guests feel like as they approach it, how it looks on the outside, what happens when they walk inside. As consumers evolve, so does the way they want to shop.Value Positioning. While a lot of people think Toys "R" Us is an everyday low-price retailer, we're not and never have claimed to be. We provide our guests with the things they want at market-sensitive pricing. Our goal is to be fair in the marketplace but to realize that value is about more than just simply a cheap price. Telling the Message. Our goal is to make sure that our messages get out there, but it's also very much to make sure that we are speaking with -- as opposed to screaming at -- people. As we evolve the cornerstones of our strategy, we're also evolving our organization to deliver on those promises. We're spending a lot of time getting our stores where they need to be. It's not about one store; it's about evolving the culture of an entire organization.With the creation of the Geoffrey stores, we're looking to move into small markets that can't necessarily support any one of our given chains. Our strategy incorporates our strengths in not only toys, but also juvenile and apparel. We're trying to bring to life the things that we should be known for, such as interactivity, in these stores. It's an opportunity for moms and their children to have an experience within the store that's not just about pushing a shopping cart. The Geoffrey stores are something that we have loved up and down throughout our organization. We then decided that we should incorporate many of the things that the Geoffrey team has put in those stores into our other stores. But we're not going to change the name of the chain from Toys "R" Us to Geoffrey, so to signal change and get the improvements, we started calling these stores, which are still in test mode, Geoffrey's Toys "R" Us. A lot of that was because we wanted to see how we could move the needle.Why the push for change?While we are very large and very successful, the competitive set and the way our core guests want to shop has changed. We didn't feel that we necessarily had moved as far with it as we could have. We have a fundamental belief that the best days of this company are ahead of it, not behind it. It's really about recognizing the people who do business with us: our customers. How has Wal-Mart affected your company's brand strategy?A couple of years ago they actually went past us in terms of share of the toy market in the United States, which was a wake-up call for all of us. We have great respect for Wal-Mart, and they have a lot of things that many of us in the industry should envy. It's not just because they are so big, but they are really good at what they do.Our focus has to be about being Toys "R" Us. Our goal is not to be little Wal-Mart. What they do is not what we do. I think in many ways Wal-Mart and others in that category reminded us that we need to be more than a place where you buy a commodity. At Toys "R" Us, it's about experiencing a line in a place where the brand can be showcased to come alive. Just because we have 40,000-square-foot-plus stores does not make us a mass merchant. We want to be a large-format specialty retailer and truly embrace all of the magic that draws people to a specialty retailer, and it's not just about price. They woke us up, they are a great competitor and they make us better every day.How has in-store marketing changed over the years in the toy industry?I don't know that it has radically changed. We are working hard with our supplier partners, and they are obviously a key component in our whole presentation strategy. For us, it's about showcasing brands and bringing them to life so as kids and their parents walk in, they learn more, see more, experience more, touch and feel more. We're at the beginning of really changing things and that evolution will continue. We have a lot of time to listen to people who want to help us, but it has to be about differentiation.Our Times Square store is a good example of change. It's not just about retail entertainment, but from the moment you walk up to it, it's all about interactivity, and the entire fascia of the building is a medium. There's a lot of opportunity for us as an industry to evolve the magic of P-O-P. We're pushing for it as best we can and we obviously have to keep it within some kind of economic sensibility. But I think it's not something that we or any other retailer can do unto themselves. We have to do it in partnership with the people whose products we're trying to sell.What can suppliers do to improve their working relationship with Toys "R" Us?The first thing is to understand our strategy and that we're trying to build and operate a very vibrant alternative, not only for our guests, but also for the industry. We need their help and for them to understand what we're trying to do and hopefully embrace it or at least support it. We firmly believe that our success is directly relational to the success of our partners. If you get a bunch of good, smart people in a room, you're going to come up with some wonderful thinking. We're open to ideas. Those who really want to work with us have to try to get out of the paradigm and find a way to differentiate. But most important, they have to do something that's cool for the end user and shopper. Those are the ones who are going to win with us.How does Toys "R" Us use merchandising and P-O-P to set itself apart from other toy retailers?The store is the most important medium we have. Case closed.

The Toys "R" Us Brand Renewal Story

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