EToys adds 'Room Decor' to mix - Brief Article - Product Announcement

DSN Retailing Today, Nov 6, 2000 by Mike Duff

Children's furnishings department advances PL program

SANTA MONICA, CALIF. -- Everyone seems to be getting into the home goods business these days, including eToys, citing margins and brand building as primary reasons for the appearance of furniture, domestics and decorative accessories on its Web site.

Home goods offer many retailers superior margins, particularly those that go after the segment as an ancillary convenience business. The general idea is to drive consumers into the stores with a prime category, then sell them some sheets or a decorative pillow or two on the side. So it is with eToys, which is featuring its new home goods collection on its opening page. But margin isn't the only concern. By adding the home products, or what is being categorized as "Room Decor," eToys takes another step toward associating its brand with one-stop family shopping on the Internet.

"It is important to be a one-stop shop for families, the ultimate family destination," said Jane Saltzman, senior vp of merchandising. "In order to be that, you must offer more than just hot toys. Home decor is actually one of many product categories we are in besides toys. EToys also covers these major children's product categories: toys, books, music, video games, software, videos, baby items, hobby and party goods."

Room Decor popped up on the site the week of Oct. 16. When cast against the 100,000 skus available on eToys, the 600 home skus may seem paltry, but they cover a lot of ground in a specific segment of the marketplace: children's room decor.

"We were interested in finding traditionally underserved categories in the kids space that are meaningful to families. Nothing is more important to a child than their room," said Saltzman.

Recently, major mills and many retailers have bolstered their selection of home goods for infants and kids. Most of them are after margin, too. The kids business is something of a grandparents' business, meaning that vendors and retailers feel they can woo grandparents, aunts and uncles, and other interested third parties with plenty of cash to spend. While parents can be very practical, those third parties are more apt to lavish affection, and cash, on the little darlings they don't have to keep from getting peanut butter on everything.

Given this scenario, vendors have produced relatively lavish bed sets and related items. Added to that is the trend toward kids becoming more fashion conscious and involved in purchasing all sorts of room decor items, among other style-setting products. All things considered, eToys could hardly resist getting into the home area.

Additionally, home goods gives eToys a chance to further establish its private-label program, a point of differentiation in the wide-wide world of Internet toy retailing. Uniquely eToys is a designation that can be found in other product segments, but it is particularly prominent in home, where it is the only label.

Home goods are merchandised in ensembles on the site under the headings Think Pink, Jungle Jubilee, Primary Colors, Sports Buff, Vroom Room and Store Everything.

"EToys was really the pioneer in Internet ensemble merchandising," Saltzman asserted. "We have built our business and continue to build our business on more than just hot items. We know this type of merchandising really speaks to our customers, and each year we get more sophisticated in our approach."

Price points in the eToys home goods program are within the mass-market range, although some higher-end merchandise is available. "We have just launched an area of our site called the Big Gift. This will have more of the boutique-type items. That said, our kids home decor is from the exact same factories as many catalog companies currently selling the product at much higher prices," said Saltzman.

Still, the bulk of the program is mass-market oriented; for example, the Choo-Choo twin-size duvet is listed for $99.99. Product notes indicate it can be coordinated with an available standard sham with pillow insert and bed skirt, each sold separately, since coordination is a critical feature of home-goods merchandising these days. In addition, the site offers an 18-by-33-in. overdoor pocket organizer for $14.99, an All-Star Sports Tabletop Bookshelf for $19.99 and a Floral Wooden Computer Desk for $149.99. A Uniquely eToys Hand-Painted Floral Vanity Chair matches, but it is listed separately at $39.99. Mixed in with the home goods are even some apparel and apparel accessories, such as an All-Star Sports Cover Up--essentially a bathrobe--for $32.99 and CD on the Go carrier bag for $12.99.

One criticism of eToys' home effort might actually be provoked by the company's effort to push the Uniquely eToys label to the forefront. On its Web site's opening page, eToys offers a bedroom ensemble. However, the picture looks like a lifestyle illustration rather than a product shot and might be overlooked by someone examining the site. Compounding this is the lack of a home product category click-through.

Some observers contend that this holiday season is critical to eToys prospects. By prominently featuring some better margin goods, the company seems to be cultivating more profitable business. With the margin pressures it faces on the hot toys, eToys has to try developing segments with a more lucrative return.