On Friday, Toys“R”Us Japan opened its newest location in Sendai, Miyagi Prefecture. The Toys“R”Us/Babies“R”Us Sendai Izumiosawa store, located in the AEON Sendai Izumiosawa Shopping Center, represents the company’s support for the revitalization process in the Tohoku area, says Monika Merz, president and CEO of Toys“R”Us Japan, which is celebrating its 20th anniversary in Japan.
This year marks two decades since the opening of the first Toys“R”Us store in Japan, which is the company’s biggest market outside the U.S. Currently, there are 167 stores in Japan – 94 Toys“R”Us, 19 Babies“R”Us and 57 side-by-side stores, employing more than 8,000 staff.
The Sendai Izumiosawa store is the company’s third store in Miyagi Prefecture and the 12th in the Tohoku region. Toys“R”Us also took part in the Date fm Yusuzumi Concert – Let’s Go TOHOKU summer concert event in Sendai dedicated to the disaster relief, and aimed at bringing some joy back to the people of the hard-hit region, said Merz.
Born in Germany, Merz grew up in Brantford, Canada. She comes from a broad-based retail background, having worked with a ladies clothing chain, then a department store, Costco, and a catalogue retailer, before joining Toys“R”Us as general merchandise manager for the company’s Canada operations in 1996. She became president of Toys“R”Us Canada in 2000 and was responsible for introducing the company’s first side-by-side store format, which houses Toys“R”Us and “Babies“R”Us stores under one roof. She was assigned to her current position in November 2007.
Japan Today editor Chris Betros visits Merz at the Toys“R”Us headquarters in Kawasaki to hear more.
How did the March 11 disaster affect business?
There was a slowdown but we recovered very quickly. Sixty stores were damaged and 30 closed but we got them up and running very quickly. By the end of April, all except one was opened but we had planned on relocating that one anyway.
How did Toys“R”Us respond to the disaster?
We donated urgently needed baby products, including tens of thousands of diapers as well as blankets, pajamas, washcloths, towels, hats, legwarmers and more through Save the Children Japan. The Toys“R”Us Children’s Fund made a $1 million donation to Save the Children. In addition, monetary donations from customers through in-store collection boxes totaled approximately 6.6 million yen as of Aug 27.
Employees around the world donated over 20 million yen to assist employees in Japan who were affected by the disaster (261 people in total). The donations were provided through the Geoffrey Fund and through individual donations by employees in the UK, Canada and Japan.
How would you describe the company’s image in Japan?
Having been in Japan for 20 years, we have a very strong brand awareness. Even people who don’t have children know us. I think we are known for our great selection, and as being experts with child and baby goods.
What is the strategy behind the integrated stores?
The idea is you connect with customers at an early stage and they grow with you. If you give them good customer service, they will come back. We feel that is really the format for the future. So we are converting a few more stores into side-by-side stores this year and the ones we have converted have done very well.
What do you look for in deciding on a location for a new store?
We take a look at the demographics, whether the site is in a mall, what in the area might attract people to come. Our minimum area is around 25,000 square feet.
Does the Japanese market have any unique characteristics?
Consumers everywhere have the same concerns. They want value for money and want to make their children happy. What’s different in Japan is that the toy part of the business is really very much TV-driven. One example are Licca-chan dress-up dolls which have been very popular for many years due to TV advertising.
Also, product launches here are probably more significant than they are in other countries. Shelf life can be short, too.
How do you market the company?
We don’t really do brand building. Rather, we have strengthened our loyalty program and communicate with those customers by email, offering specials for them. We will be increasing our presence on social media in future.
Can we shop online?
Yes. It is an increasing part of the business.
Is the business seasonal in Japan?
Yes, it is. Christmas is big here. I was quite surprised at that. New Year’s is a very busy time for us as well. We do sell Halloween merchandise, though it is not as big as in the States. Golden Week is another key time for us.
How often do you visit stores?
I try to visit stores once a week. They are the front line and that is where we get valuable feedback from customers. I look at presentation, traffic flow, any improvements we can make in fixtures, hear from staff what is or isn’t selling, and observe what customers are putting in their baskets.
If the store is in a mall, I wander around to look at other retailers. That gives me a good indication of how consumers are spending their disposable income.
What is your management style?
I really believe in having a strong team because that makes for a sustainable business. I like to delegate to a person’s ability. If I see they can take on more responsibility, I like to give them more responsibility because it develops their capabilities. I don’t make decisions in isolation. I will be more hands on in areas that I feel need more focus.
I have a lot of one-on-one meetings with my team. In fact, we have cut back on large meetings. I’ve always felt that actions should result from meetings, otherwise they are not relevant.
What CSR activities is Toys“R”Us Japan involved in?
We are ramping up our CSR activities with orphanages and fund raisers in the various communities. We have also made significant contributions to Tohoku disaster relief through Save the Children, as I mentioned earlier. We are environmentally conscious. A lot of the stores we are renovating now have got eco-friendly flooring like linoleum and better LED lighting to reduce energy consumption and CO2 emissions.
What is a typical day for you?
I often have conference calls early in the morning with the U.S., which I do at home. I’ll usually get here about 9 a.m. and leave between 6:30 and 7 p.m. At nights, I may have other calls to make to other overseas offices. I’m on my Blackberry all the time, including weekends.
How do you like to relax?
I exercise with a trainer once a week depending on my travel schedule. My husband and I enjoy movies and traveling around Japan.
What was your favorite toy when you were a little girl?
I was really into crafts. I liked to sew for my dolls.