Talking with...Toys"R"Us, Inc. Chairman and CEO Jerry Storch
Over the last several months, I've had the pleasure of working with Jerry Storch and the team at Toys"R"Us as we planned an opening keynote presentation at the Shop.org 2012 Annual Summit. The more we worked with Storch, the more impressed we were with not only the Toys"R"Us team talent itself, but also with the iconic American brand that captured our hearts growing up as children - and for many of us, the brand that can still bring out the kid in us all. As the world’s leading toy retailer, Toys“R”Us and its family of brands operates over 875 stores in the United States and Puerto Rico, and in hundreds of additional stores around the world. But there's much more behind the online side of Toys "R" Us that is just as impressive. To complement their established brick-and-mortar presence, Storch managed the continued growth of the Toysrus.com e-commerce business and added to the company’s online portfolio with the acquisitions of eToys.com, KB Toys and Toys.com in 2009. That same year, he also led the company in obtaining the exclusive right to own and operate the legendary FAO Schwarz brand and FAO.com. To help introduce Jerry to the greater Shop.org community, I sat down with this retail veteran with over 22 years of experience to discuss all things omnichannel, mobile, the growth of e-commerce, and what keeps him up at night as a retail CEO. But I have to admit, my favorite takeaway includes a glimpse into the jovial atmosphere Storch helps create in the office through the occasional NERF blaster duel with his team. Read on for some great insight from Storch below.
At the Shop.org Annual Summit, you’ll be speaking about how retailers must integrate all channels to grow and thrive. What does embracing an omnichannel approach mean for retail leaders?
In order to be successful in today’s fast moving and highly competitive environment, retailers must offer unique products and services across all channels. The future belongs to those that build the best consumer-facing network, incorporating stores, internet, mobile, social and local components. We have seen that customers want the ability to shop and interact with our brand whenever, wherever and however they choose. At Toys“R”Us, we have put an intense focus on our omnichannel strategy to ensure a seamless shopping experience across all our channels, whether it be in our stores, on our e-commerce sites or on our mobile sites. Today, we announced an expansion of these services with “ship to store” being introduced in October. This service will allow customers to ship select online purchases to their local Toys“R”Us or Babies“R”Us store free of charge. Through our omnichannel services we are providing even more convenience for our customers.
What are some of the biggest challenges of moving a big-box store operation to an omnichannel model and how are you overcoming them?
Implementing an omnichannel strategy is the result of efforts of cross-functional teams throughout the organization over several years as we have continued to add new services. We have been nimble and aggressive about advancing our omnichannel offerings, which allow us to leverage the strengths of our store and online businesses. This fall, in addition to rolling out “ship to store,” we are installing merchandise pick up kiosks in all Toys“R”Us and side-by-side stores, which integrate Toys“R”Us and Babies“R”Us under one roof, to streamline the in-store pick up process. We are adding these services to our already robust omnichannel offerings, which include “buy online, pick up in store,” “family and friends pickup” and “ship from store,” as omnichannel shopping continues to gain popularity among our customers. We know that to be successful we must integrate all channels, including stores, internet, mobile, social and local components. We will continue to refine these offerings and add new services to ensure we are providing a seamless shopping experience for our customers.
Our recent 2012 Social and Mobile Commerce Consumer Study reported a significant increase in consumers shopping with the help of smartphones. How does Toys“R”Us leverage the growth of mobile?
Mobile commerce is our fastest growing channel of consumer engagement. Customers shop our mobile-optimized e-commerce sites and also use our dedicated Toys“R”Us and Babies“R”Us apps. Additionally, we have partnered with a number of leaders in the mobile space to provide customers access to a variety of payment options and apps. For example, we are partnering with PayPal this fall to test its offline payment solution in select stores, where customers can pay for their purchase by simply entering their mobile number and PIN at the point of sale. We have also partnered with Google Wallet to test its near-field communication technology that turns a shopper’s cell phone into their wallet, allowing them to pay for purchases in 200 of our stores. We continue to look for innovative ways to enhance our mobile shopping capabilities.
How has the growth of e-commerce affected Toys“R”Us? Are you seeing more customers shop online?
Yes, in a good way! Our e-commerce sites reported $1 billion in sales in 2011. Online shopping represents an opportunity for Toys“R”Us, and we continue to invest in our e-commerce business. Our global e-commerce business grew double digits in 2010 and 2011, driven in part by our omnichannel offerings. Through our vast network, we provide multiple channels for customers to shop with us, whether through our e-commerce sites, mobile sites or stores across the country. That being said, the vast majority of sales still occur in-store. That is why it’s important for us to integrate the two to create a seamless shopping experience. That being said, the vast majority of sales still occur in-store. That is why it’s important for us to integrate the two to create a seamless shopping experience.
Coming from a more traditionally brick-and-mortar focus, what digital companies do you find interesting to watch?
Many! The advancements in this space have been fascinating to watch. We have partnered with a number of internet and mobile companies at the forefront of digital services to test and introduce new initiatives and payment options in our stores, including Foursquare and Shopkick. We also work with eBay to host storefronts for Toys“R”Us and Babies“R”Us, which allows us to reach another demographic of customers who do not regularly shop on our e-commerce sites. As technologies emerge, we will continue to partner with leading providers to enhance our mobile offerings, making it easier than ever for Toys“R”Us customers to shop with us wherever, however and whenever they choose.
What’s happening in the retail world that keeps you up at night?
The speed at which technology is moving and striving to keep up the pace is always top of mind. We’re constantly thinking about how we can expand our service offerings to improve our customers’ experience in-store and online to ensure we continue to be a destination for parents and families. Toys“R”Us is doing this through our competitive advantages, including omnichannel services, offering a differentiated product assortment (ensuring we have products that can’t be found anywhere else) and enhancing our Rewards“R”Us loyalty program, which boasts 29 million members. As we build our service and loyalty offers, we can help ensure shoppers choose us for their toy and baby product needs.
What are you most looking forward to about the Shop.org Annual Summit this year?
It’s a great opportunity to meet and visit with colleagues in the industry. Plus, I’m absolutely looking forward to speaking at the Summit and helping dispel the myth that the future belongs to online-only retailers. A well-defined omnichannel strategy is the future of retail, and “brick and mortar” stores are vital to this paradigm.
Kids across the world consider your job a dream come true. In a company that celebrates never growing up, how much of your day is play? What’s the best part of your job?
Kids are at the heart of our business. At the end of the day, it is all about the joy we bring to children and families. My office is filled with toys, and yes, between meetings I have been spotted having NERF blaster duels with members of our team. I also love to visit our stores across the country to witness firsthand the squeals of delight and smiles on kids’ faces when we help them find the perfect toy. Amidst all the day-to-day priorities, it’s good sometimes to just take a moment to remember that what we do everyday has such a lasting impact on the families and communities we serve.
You have over 20 years of experience in retail. What do you love about working in this industry?
The retail environment has changed dramatically since I began my career and it continues to evolve rapidly in this era of new technology. Speed has become an imperative for retailers who want to stay ahead of the game by introducing new services to engage today’s very savvy consumer. The pace is exciting and challenging at the same time, and it brings out the competitive spirit in all of us.