This fall the poster boy for "doing it right" was eToys CEO Toby Lenk. His commercials got a warm intro at Forrester. Visa USA's Liz Silver showed the same ads at @d:tech. All analysts agreed that Toby "got it." As Amazon was to Barnes & Noble, so eToys was to be against Toys R Us and KayBee Toys, namely the Internet start-up that wins by having a laser-like focus on its medium and executing better. Unfortunately, Toby Lenk never counted on Pikachu.
All through the fall, the poster boy for “doing it right” was eToys CEO Toby Lenk.
He got a warm introduction at the Forrester conference and showed his new commercials. A few weeks later, at @d:tech, I saw the same ads, this time shown by Liz Silver of Visa USA.
All the analysts agreed that Toby “got it,” that he understood his category, that he understood branding, and that he responded correctly to customer demands. Toby told one such story that stuck with me. He said his original boxes, featured on an American Express ad, said “eToys” in big letters, but customers complained that identified them to the kids. So he switched to plain boxes, although he’ll still gift wrap what’s inside.
As Amazon was to Barnes & Noble, so eToys was to be against Toys R Us and KayBee Toys, namely the Internet start-up that wins by having a laser-like focus on its medium and executing better.
Unfortunately, Toby Lenk never counted on Pikachu.
Pikachu, for those who don’t know, is the most popular Pokemon, a yellow mouse whose favorite “attack” is to electrocute opponents from red electrodes on the sides of his face. (That’s why his trainer wears rubber bicycle gloves. It lets him hug Pikachu safely, and Pikachu loves hugs.)
Pikachu, and his friends, are like Furby, the Power Rangers, and the Cabbage Patch Kids all rolled into one this holiday season. They’re also the property of Nintendo.
Nintendo, as portrayed in David Sheff’s “Game Over”, makes Microsoft look laid-back in the iron control it places over its distribution channels. You’ll get no freebies here. Its Pokemon site is a non-stop commercial with no free games.
Nintendo is using the Pokemon phenomenon to regain market share for its GameBoy portable and reassert its dominance over the channel. It can succeed at this because every kid wants Pokemon, so every store needs Pokemon. A store’s ability to get Pokemon depends heavily on its track record with Nintendo, and eToys (being new) has no track record.
So the most popular Pokemon bundle, a $100 Color GameBoy with the Pikachu game “Pokemon Yellow,” is out of stock at eToys, but still available at KBToys. Toys R Us has the game and game player available separately, and its home page features a separate “Pokemon Central” tab.
Here’s another Clue to eToys’ product acquisition problem. The eToys home page is pushing hobbies, finds from small toymakers, and top toys for under $20. The KayBee Toys home page is filled with Poke-stuff. The eToys site only lists two Pokemon items among its top ten sellers. A click to its “hot list” page features a Hot Wheels racing track. (That is so 1995.)
The point is not to dump on Toby Lenk or eToys. He’s a fine man with a fine company. The point is that toys are a fashion business, and the maker of a hot toy determines who’ll win the season. When you gotta catch ’em all, moms go where the toys are. Merchandising is secondary to seeing the stuff on the shelf. It’s the secret weapon established bricks-and-mortar retailers have over all their e-rivals.
