Toys 'R' Us Vows to Solve Online Access Problems

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Toys 'R' Us claims it will press ahead with ambitious holiday marketing plans for Toysrus.com despite the Web site's recent inability to handle a spike in traffic.


Following a nationwide distribution of 62 million catalogs in local weekend newspapers, many visitors to the Toysrus.com site Nov. 7 and 8 received messages telling them the server was not responding or that the supplied URL address was not found.


When visitors did connect to the site, many only got as far as a message screen stating: "Due to the overwhelming popularity of the Toys 'R' Us Big Book of savings, we have had to limit the number of guests to our Web site. Please accept our sincere apologies and try again later."


"Toys 'R' Us invested in a catalog and, unfortunately, they should have invested more in customer service and fulfillment to keep their customers happy once they reach the site," said Evie Black Dykema, senior analyst for consumer e-commerce at Forrester Research, Cambridge, MA.


Results the following weekend indicate the toy company's problems remain. Several attempts to contact the site from New York City on Sunday, Nov. 14, again resulted in messages stating that the server was not found or was not responding.


But Toysrus.com is undeterred.


The Web merchant will put banners, signage and more than 10 million coupons for online-only discounts at every checkout register in Paramus, NJ-based Toys 'R' Us' 707 stores across the country.


Toysrus.com will also tap the 62 million households on the chain's mailing list through undisclosed direct-response programs.


Also, Toysrus.com will rely on ongoing partnerships with America Online's AOL.com, Microsoft Corp.'s MSN, Yahoo and online tutoring service Tutornet to increase visibility for the online toy shop.


"In order to meet customer demand for the holidays, Toysrus.com will be tripling the number of servers through this week [of Nov. 8] to prepare for the rush, on top of the quadrupling of servers we implemented last month, as well as continued investment in the technical infrastructure," said John Barbour, Toysrus.com's CEO of three months.


Toysrus.com recently launched a $10-off coupon available in just 20 Toys 'R' Us stores to drive traffic to Toyrsus.com. The promotion attracted 13,000 shoppers to the site.


In the next few days, it will extend this promotion to all Toys 'R' Us stores. The coupons have already been included in magazines such as Good Housekeeping, Shop Online, Family Life and Time.


"If the promotion is as successful as it was in the first 20 stores, there will be a lot of traffic on our site," Barbour said. "We're also offering free shipping through the month of November and we'll have product exclusives to offer our customers."


Referring to last week's disaster as a "wake-up call," Cormack Foster, analyst at market researcher Jupiter Communications, New York said, "They went and bought servers, but if they want to keep this from happening in the future, it'll take them more than a lot of hardware to keep them in the clear.


"I don't know what Toysrus.com's processes are behind their fire-walls. What this [outage] might reflect is that the marketing and business development departments aren't communicating with their IT department."


Results the following weekend indicate the toy company's problems remain. Several attempts to contact the site from New York City on Sunday, Nov. 14, again resulted in messages stating that the server was not found or was not responding.


Forrester's Dykema criticized Toysrus.com for not anticipating consumer rush, but added Toysrus.com won't be the only online merchant who will fumble during the 1999 holiday shopping season. "We're going to see many more players make this mistake," she said.


Toys 'R' Us has had patchy luck in the past few months. First, University Games founder Bob Moog, who was to head Toysrus.com before former Hasbro executive Barbour, backed out. Next, Toys 'R' Us CEO Robert Nakasone quit abruptly in August, soon after the toy marketer's deal with Benchmark Capital Partners collapsed.


Forrester estimates online toy sales this year will be $253 million, up from $68 million last year. By 2004, this figure is projected to hit $3.4 billion, 10 percent of toy sales overall.


Defending Toysrus.com, Barbour said despite the early November slowdown, the online marketer processed a record number of orders on those days. This was in addition to a consumer traffic spike of 150 percent from September and October, he pointed out.


"More than 50 percent of the toys sold are in the fourth quarter of the year," Barbour said, "and we continue to expect outstanding holiday sales, with our busiest weeks still ahead."
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