Toys "R" Us Spawns Call Center for Web Shopping Site

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Toys "R" Us has decided it wants a piece of the $4.5 billion online spending pie estimated for this year, a number that is expected to increase to $35.3 billion by 2002, according to report released last week by eMarketer, a New York-based research firm. In September, Toys "R" Us Inc., Paramus, NJ, enlisted the help of teleservices provider SPS Payment Services Inc., Riverwoods, IL, to handle the customer service requests generated by the recent launch of its online store.


The move comes just in time for the holiday season when the retailer expects the 120 to 150 e-mails per day and 225 calls it receives in its Asheville, NC, service center to triple. More than 50 percent of Toys "R" Us' business is done in the weeks preceding the holiday season, so SPS' ability to get the call center up and running before Thanksgiving was imperative, according to the toy retailer. SPS estimates that the 20 agents working on the account will grow to approximately 80 this month. "We have been impressed with [SPS'] ability to implement our program so quickly," said Debra Rood, vice president, fulfillment, TRU Direct.


"We are very bullish about Web direct selling and believe it will extend our customer base substantially," Rood said.


To drive traffic without dramatically increasing spending, the retailer last month started including the Web site address (www.ToysRus.com) on all promotional and advertising material, including radio and television ads by Kaplan Thaler Group, New York, as well as on shopping bags and on banners in the retailer's 698 locations.


Toys "R" Us is exploring advertising on the Web in an agreement with AOL, as well as in rich media ads with high-speed Internet service @Home Network, Redwood City, CA. It is participating in a test gauging effectiveness of rich media ads to drive customers to shop online. The ad, developed by @Home Network, includes a Lego helicopter that spins and zooms above a buy button that takes users to the Toys "R" Us site.


The Web shopping site, together with its first-ever catalog that was dropped to 2 million households in two separate mailings last month, is part of a larger direct marketing strategy by the retailer which has been facing steep competition and eroding profits in its retail stores.


"It is one of our top initiatives for the year in general and will continue to be so for 1999," said Krista Kondravy, customer service manager at Toys "R" Us.


"We looked at SPS because it was the outsourcing company best able to provide knowledge of Internet retailing and service to our customers," Kondravy said. "This is a brand new venture for Toys "R" Us, a learning experience."


The retailer is exploring various upgrades, such as real-time response, chat room, voice and data integration. "We would consider almost anything," Kondravy said. The retailer will also be looking into direct mail to follow up its teleservices.


Currently, the average response time for e-mails is 10 hours, according to Ruth O'Brien, SPS vice president of TeleServices, although the retailer guarantees an e-mail response in 24 hours.


Cross-sell and up-sell strategies are in place, although it is not the main focus for the customer service initiative, according to SPS. Agents have the ability to help consumers make a decision as to what is the most appropriate toy for an age group.


"Our focus now is helping the customers place their orders online," said O'Brien. "If you just walk them through [the process] they are able to do it themselves. We want to make the consumers comfortable with ordering online."


The conversations are not heavily scripted. "We are at the point where we have some online scripts that have been produced for some of our agents to give them a comfort level. That is definitely a work in progress. As we learn what they are looking for we modify the scripts," O'Brien said.


"The quality of the call is crucial," Kondravy said. Joint monitoring of both calls and e-mails takes place from both Toys "R" Us and SPS supervisors who monitor calls and e-mail on a daily basis.


"Customer service training is a big part of the quality of the call according to O'Brien. Agents must be customer and kid friendly and able to make the customer feel at ease. We speak on the behalf of Toys "R" Us and support their brand image," she said.


Training includes 60 hours as well as periodic refresher sessions with training accounting for approximately 5 percent of an agent's work time.


SPS is the principal operating subsidiary of SPS Transaction Services, Inc., a majority-owned subsidiary of Morgan Stanley Dean Witter & Co.
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