AIM6348
AIM6348
E-Commerce Strategy and Control
E-Commerce Strategy and Control
On-line toy Industry
On-line toy Industry
• On-line toy market increased from $425 million in
2001 to $1.6 billion in 2002
• The main companies are Toysrus.com and Etoys.com • The industry is fairly new, but the the market is still
highly intense
Overview
Overview
•
One of leading retailers of toys, children's
apparel and baby products
•
An $11 billion business with 1600 stores
worldwide
•
Operates in five divisions
Revenues in Divisions
Advantages- brand name
Advantages- brand name
• Back up by the Toys R us, Inc. the biggest toy
retailer
• Convenience of the land-base chain stores all over
the states and globally
• Toysrus.com spends 18 % of revenue in marketing,
Advantage-products
Advantage-products
• Long history in toy industry, have different
product lines and operate globally
• .com , as store front , collects information to make
Advantage- integration with
Advantage- integration with
Amazon.com
Amazon.com
• One is a longtime leader in toy industry, another
has strong e-brand online.
Threats
Threats
• Wal-mart • Mattel
Strategy
Strategy
• Alliance with Amazon.com
• Allow customer to return online shopping to chain
Toysrus.com Status
Team up with Amazon.com
Team up with Amazon.com
• 1999 Christmas on-line orders flushed into
Toysrus.com
• In 2000 announced its internet joint venture with
Amazon.com
• Amazon will oversee Web operations, order
Pros and Cons of the partnership
Pros and Cons of the partnership
with Amazon.com
with Amazon.com
Pros
Pros
• Expertise in buying and merchandising toys Expertise in buying and merchandising toys
• Builds Builds Toys R usToys R us brand identity brand identity
• Saves its fulfillment and customer service costs Saves its fulfillment and customer service costs • Removes the need to invest in upgrading its Removes the need to invest in upgrading its
distribution facilities
distribution facilities
Cons
• Loss of control
• Payments to Amazon.com
Pros and Cons of the partnership
Pros and Cons of the partnership
with Amazon.com
Brick and Mortar Toys R Us
Brick and Mortar Toys R Us
A successful retailer
A successful retailer
•
Sales more than $ 11,000 millionSales more than $ 11,000 million• 1600 stores 1600 stores
E-Commerce Hype
E-Commerce Hype
Toys.com story
E-Commerce at Toys R Us
E-Commerce at Toys R Us
• A very bad start in 1999
• Smart decision of joining Amazon.com
• 65 million and growing number of visitors every year
• Number one site in its category
Revenues in Divisions
Sales Growth in Divisions
E-tail vs Retail ?
E-tail vs Retail ?
• E-commerce is a great tool to lower costs and
increase sales
• E-commerce complementary not an alternative • Old and new economy functions better together
Conclusion
Conclusion
•
Renew / Renegotiate contract with
Amazon.com in 2010?
•
Re-Launch own site
Questions??
