For Toys 'R' Us, handing over the operation of its online unit, Toysrus.com, to Amazon turned out to be such a good decision that the toy giant expanded the partnership this year. Amazon now handles order fulfillment and customer service for Babiesrus.com and Imaginarium.com, too. Toysrus.com CEO John Barbour discussed how the online-toy environment has changed in the past year with BusinessWeek L.A. correspondent Arlene Weintraub. Following are excerpts from their discussion:
Q: How does the online experience differ for shoppers this holiday season?
A:The world has changed since eToys went out. And overall, there has been a dramatic decline in pure online retailers. So now, it's all about bricks and clicks -- traditional retailers giving the customer a choice of when they want to show up to shop and where they want to go.
Q: With KB Toys now operating the eToys site, are you concerned KB could grab a big portion of your online traffic?
A:No. EToys is a good name, but it will be a challenge for KB to recreate the eToys experience. People going online to buy a toy are going to go to the authority, and we think that's our advantage.
Q: What about concerns that the faltering economy could keep shoppers off the Web this year?
A:If consumers make cutbacks, I think it will be in luxury goods. Parents will still buy toys for their kids. Our business is also helped by the fact that there are more and more women shopping online. It used to be that the online marketplace was saturated with male techies. Now, we're starting to see more moms and grandparents. That's our sweet spot.
Q: Will the trend of retailers outsourcing their e-commerce efforts grow?
A:Yes. Companies used to believe they had to do everything themselves. We've shown the benefits of focusing on what you do best -- and looking for partners to help everywhere else.