Girding itself for the upcoming holiday season, Toys ‘R’ Us Inc. has put the spotlight on Toysrus.com by splitting advertising responsibilities for the online brand from Leo Burnett, Chicago, and handing it to sibling agency D’Arcy, Los Angeles.
D’Arcy was one of 20 agencies that pitched for Toysrus.com business. The other two finalists were Doner, Southfield, MI, and Citron Haligman Bedecarre, San Francisco. Burnett will continue to handle the Toys ‘R’ Us offline account.
“Our goal is certainly to help build Toysrus.com into the No. 1 online toy retailer, but ultimately we’d like to help them become the No. 1 children’s and family e-commerce destination,” said Diane Krouse, managing director at D’Arcy’s Los Angeles office.
Toysrus.com is the No. 2 online toy retailer in sales, lagging behind Internet-only eToys.com, Los Angeles. Offline, Toys ‘R’ Us lost its No. 1 position to Wal-Mart Stores Inc.
The holiday season accounts for 50 percent of its annual sales, Toysrus.com CEO John Barbour has said. Yet the toy retailer in November tainted the Toys ‘R’ Us brand when it suffered embarrassing crashes to its site. It couldn’t cope with traffic after mailing 62 million holiday catalogs with $10 discounts for buying online.
Site crashes and fulfillment gaffes were not the only problem. There were complaints of failure to deliver in time for Christmas, including a lawsuit from an angry mother in the Seattle area. Toysrus.com sought to mollify aggrieved consumers with a $100 gift certificate redeemable online or at bricks-and-mortar Toys ‘R’ Us stores.
But the retailer is taking steps to avoid similar faux pas this year. It also is being helped by market conditions.
Take, for instance, last month’s bad news for the online toy-retailing sector. eToys raised $100 million through private investors rather than return to a skeptical stock market. KBKids.com sacked staff and dropped plans for a $210 million IPO. And educational toy retailer ZanyBrainy.com lost its CEO only seven months after launch.
The Federal Trade Commission made the waters murkier Monday when it sued Disney-owned Toysmart.com Inc., alleging that the company “deceptively” offered to sell personal information of Web site visitors to third parties. Toysmart went bankrupt and out of business May 22, followed a few weeks later by rival ToyTime.com.
A key beneficiary of this rout is Toys ‘R’ Us. It struck a deal last month with media giant Viacom to buy the inventory of defunct rival educational toy retailer RedRocket.com. It also will open a separate channel on Toysrus.com for Nickelodeon merchandise and cross-linkage. Nickelodeon is part of Viacom’s MTV empire.
Also, Toysrus.com has gained three new fulfillment centers to increase capacity in anticipation of the holiday season.
The new dedicated ad campaign for Toysrus.com plays into this new focus on the dot-com arm. Toysrus.com and D’Arcy still are in the process of allocating a media budget. Print and broadcast will probably be the dominant media.
Toysrus.com did not comment at press time.
Select Resources Inc., an ad review consultant, led the search for an agency of record for Toysrus.com. MediaVest — which, like D’Arcy and Burnett, is part of the BCom3 Group agency conglomerate — will handle media planning for Toysrus.com. Starcom will continue to buy media, however.
D’Arcy’s most recent assignment in the toy sector was the Tyco account, which it lost a few years ago. At the time, D’Arcy was known as D’Arcy Masius Benton & Bowles.
The agency’s Los Angeles office recorded estimated billings last year of $100 million. Its current online accounts are GMBuypower.com, furniture retailer kozyhome.com and firstsource.com, a business-to-business site for information technology products. Toysrus.com is its first toy account. Fourth-quarter work on the account will begin shortly.
“The key aspect of the brief was to help them understand both strategically and through creative and media execution how we would recommend they leverage their considerable assets as a bricks-and-mortar retailer in the online environment,” D’Arcy’s Krouse said.