Name: Toys ‘R’ Us Has a Secret Weapon in the War Against Amazon
Uploaded: 2016-07-12
Duration: 3 min 56 s
Description: CEO David Brandon explains his strategy.

[ MUSIC ] What's the relationship, from your perspective, between the physical store and the digital customer, how do those work? And where you've got a store, do you see fewer people shopping for you digitally, or do you see more? What's the relationship? No, they work together. If we've had a market, and we've had some where we've closed a store over the last several years, we see a declination Education and the amount of digital participation in that market. A digital customer likes the satisfaction and the comfort and the confidence that comes from I know what that story is. I know where I can go talk to a real person. I know where I can take the product back if I need help or assistance. So there is a definite hand and glove opportunity. Here in the US we've got about 850 stores. We take advantage of that, not only in terms of customer facing in that brand statement that gets made every time the customer drives by the store, that drive is digital but it also provides us with local ship warning, because the ships are from those stores. Is that when you think your store, the physical, the boxes themselves, are those for you becoming more and more about distribution centers that they are about shelve space? Both. Clearly as this- But are we gonna see that? Are the walls literally gonna start moving a little bit as years go on? Yes, yes. The new stores that we're building, we're gonna be as thoughtful and as careful in the design of the backroom of the store, to make sure that becomes a very efficient by which we can ship from store, as we think about the merchandising and the selling space. How scared are you by the prospect of Amazon being able to deliver a toy or whatever it is in 30 minutes, let alone an hour? Well, it gets our attention. It's- [ LAUGH ] When you wake up every morning on the bricks and mortar side. It gets your attention, like, my God, my house is on fire, gets your attention? [ LAUGH ] When you wake up in the morning, and you realize you're gonna go to work and on the bricks and mortar side, you're going to have your major competitors are gonna be the Wal- Marts and Targets of the world. And then your web- source is gonna have to compete with everything Amazon brings to the table. That gets your attention. But we're a specialty retailer. And we've got to trade on those unique attributes of a specialty retailer That the big box guys and then in some cases Amazon can. And when you said that does that mean proprietary product does that what you mean by that. Yeah, we have you know products that are exclusives. We have a 12, 13 % of our business that's private brand product that we've developed that we've created a point of difference and we've got that local community connection. We can not only sell you that bicycle, we can have that customer come in and let that child ride that bicycle around on a little test track, to make sure it's the bike they really want. We can assemble that bike, and if you've ever tried to assemble some of these, Products that are being sold. Those are services that we can provide. So we're constantly looking- Do you encourage them to make it as hard as possible to assemble them. Yes. That's something you guys do. Yes we do. Okay, it's your fault. Okay, check off on that. I'm curious, you talk about those things. But still the vast majority of what you guys are selling Is stuff that I can get, not only at some of your competitors whether it be Walmart but I can get from an Amazon. How are you not fighting kind of what's ultimately gonna be a losing battle. How do you go against that cuz they continue to grow and get better at what they do? The thesis that we have and the thesis that you have to believe in is there is a place for specialty retail. That we're not gonna live in a world where everybody's gonna buy everything off a screen. That they're gonna wanna touch it, they're gonna wanna feel it, they're gonna wanna interact with it. And we certainly know that from the standpoint of a baby product. Yeah. So you can, the typical new mom will go online and read everything. But at some point in time they wanna go and they wanna see the difference Between these various products, because they're concerned about safety and they're concerned about comfort, and they're concerned about making sure that they do the very best thing for that first child. And in some cases that's hard to do just looking at a screen. [ MUSIC ]