Recently a shopper asked this little sheep if I could explain “those ridiculous coupons Toys ‘R’ Us sends out.” Sounded like some ‘dead thinking’, so I sat down to learn more.
She explained to me that – as a mom and a rewards card holder – Geoffrey and his pals at TRU drown her in a veritable flood of coupons and email deals. On face value, these coupons offer decent deals like “20% off any* item”. That kind of deal could seriously save a mom or dad some cash, or maybe allow them to stretch to that extra special birthday gift.
‘Far from ridiculous’ I thought, but the devil, in this case, is most definitely in the detail – which is all tucked neatly behind that wee, little asterisk. The back of the coupon (or the multiple-screen footnote on the online version) are littered with a list of exclusions that would rival the inventory of most small toy stores. Most of the big name brands, and the popular categories (electronic learning toys, for example) are excluded.
In part, I understand this strategy – but I’m equally baffled that TRU continues with it.
Let’s start with the part I understand: TRU is a business and needs to protect their margins to keep their stores open and keep people in jobs. I actually would never expect them to give a “20% off everything” blanket coupon. (As an aside, when I worked in the toy industry in the 90’s, the margin on game consoles was a little more than $1 – the profit was made later selling the games. So even in 2013, 20% off an Xbox probably still means a big loss for any retailer.)
TRU’s mistake, in my opinion, is in their choice of how to frame the communication of the promotion in the first place. Intentional or not, their ‘blanket discount, with exclusions’ approach wreaks of ‘the-ol’-bait-&-switch’. And that’s a tactic better left to shonky car dealers in velour suits and unscrupulous B&B owners that have never heard of tripadvisor.
The effect is, for many shoppers, worse than offering no deal at all:
– Mom gets a rush of dopamine from the thought of a big saving on that Little Tikes gym for the backyard;
– then she flips the coupon and gets swallowed into a pit of despair lined with a list of exclusions longer than a Lord of the Rings movie;
– in today’s world, that despair seeps over into her social media posts, and;
– BOOM! Before you know it, the comment thread on TRU’s own Facebook page becomes a public lynching of their own strategies.
To make the last point clear, here’s just a brief collection of comments from a recent 20% off coupon offered on Facebook:
@Pamela Evans: These coupons exclude EVERYTHING in the darn store- worthless.
@MaryEllen McKelvey Sweetman: Their coupons are a joke!!!
@Melissa Lee Schultz: Their coupons can’t be used on anything. I don’t understand why they even issue them!!!!!
@Jeng-and Xee Chang: Another toysrus coupon that excludes the whole store?? Who is the genius behind this????
@ Beatriz Reyna: Save space by stating in the fine print what counts for the coupons instead of writing the whole store that is not included.
@Rich Coehrs: I was going to to buy the $400 LEGO Death Star with this coupon, but I couldn’t because LEGOs are excluded. With tax and everything they would have made about $350 off of me. Amazon.com got my money instead. Stop excluding everything or you will not get my business.
Regardless whether TRU’s accountants have figured out that this strategy pays out in a ‘dollar sense’ (Rich’s comment might challenge that!), the writing is already on the wall for this strategy from a brand health perspective. No-one wants to be the retailer known for hollow promises and bait-and-switch gimmicks… especially not amongst that socially-powerful and high-value shopper segment they call “Mom”.
the orange sheep