EToys, Gap in Cross-Category Effort to Attract Customers
EToys and Gap Inc. today will announce a joint promotion designed to attract new customers to each retailer, a sign that online and off, competition for holiday sales is likely to be early and intense.
The EToys/Gap tie-in is among the first of many cross-category efforts, analysts said. Gap and EToys do not sell the same sort of children’s products and therefore stand to gain by steering customers to each other.
“This is a definite pointer toward how we expect retailing to be constructed five years from now,” said David Cooperstein, director of consumer e-commerce for Forrester Research in Boston.
Customers who spend $75 or more online at EToys will receive a $10 gift certificate redeemable at any BabyGap or GapKids clothing store or Web site. GapKids or BabyGap customers will likewise receive a $10 coupon for use on EToys. EToys will also feature a special GapKids and BabyGap Web page while the Gap children’s stores will offer in-store promotions for the toy seller’s Web site.
The deal would give EToys an increasingly important presence in the brick-and-mortar stores of a retail powerhouse, granting the online venture access to customers who might not have thought about online toy buying.
And Gap gets a plug from EToys for its children’s divisions, where growth has been slower than previously for the better part of this year, in part because customers disliked its fashions. Bringing EToys customers to Gap--either online or into stores--allows Gap to showcase new merchandise Gap believes customers will find more appealing.
Some Wall Street watchers, however, said such online marketing partnerships are less a sea change in the way toy companies do business than a symbol of classic marketing techniques translated for a new medium.
“They might as well be advertising on Nickelodeon because it’s just trying to get in front of people who you want to be your customers,” said Sean McGowan of Gerard Klauer Mattison in New York. “It says that all e-tailers, not just Gap, not just EToys, not just Toys R Us, are spending the daylights out of each other. And why wouldn’t they in a world where revenue is valued 100 times more than profit?”
Meanwhile, Toys R Us, in hot competition with EToys, announced a new residence on America Online’s shopping page. The deal allows Toys R Us to use the most popular Web portals to capture new customers. EToys also has a direct link from AOL.
By establishing itself as an “anchor tenant” in the portal’s Kids, Toys and Babies category, among other areas, lagging Toys R Us gains instant access to AOL’s 19 million members as well as droves of visitors who begin shopping at AOL-owned sites. In 1998, Cooperstein said, AOL alone initiated $1 billion of last year’s $8 billion in online sales.
Donna Hoffman, a professor of management at Vanderbilt University and co-director of e-commerce research center Project 2000, said the deal is do-or-die for the toy retailer’s online ambitions.
“If they don’t get their brand out there this year, this Christmas season, well, I’d be hesitant to say, ‘That’s all she wrote,’ but I wouldn’t think it would be a good thing.”
