Chad Coleman from U.S. Toy – Podcast Transcript

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Shaun Ryan:  [0:04] Hi. I’m Shaun Ryan from SLI Systems, and this is the Ecommerce Podcast. Today I’m talking to Chad Coleman, Internet Marketing Manager for U.S. Toy. Welcome, Chad.

Chad Coleman:  [0:14] Thank you so much.

Shaun:  [0:15] So Chad, traditional question to get us started. What was the first thing you ever bought online?

Chad:  [0:21] Oh wow, the first thing. It’s hard to remember, it was so long ago. I’d have to guess it would probably be something on Amazon or eBay, but I also do remember early on going to Dell’s site and building a computer to spec and having that sent to my house.

Shaun:  [0:37] Oh, that’s pretty cool. What was the most recent thing you bought online?

Chad:  [0:42] Well the most recent thing I bought as a gift was a new computer monitor for my wife from Newegg, and that was a pretty good shopping experience. And the last thing I bought personally for myself was the Sleeper Hoodie by Burton, and if you travel a lot or travel at all you need this hoodie sweatshirt.

Shaun:  [chuckles] [1:05]

Chad:  [1:06] It comes with a neck pillow. It’s got a light shield on the hood, earplugs, vents, a hole for your earplugs.

Shaun:  [chuckles] [1:17]

Chad:  [1:18] It’s a must‑have if you travel.

Shaun:  [1:20] Wow. OK, I’d better get one of those. And where did you buy that from? Was that from the Burton website itself?

Chad:  [coughs] [1:26] Oh no. That was actually from a site called Peter Glenn.

Shaun:  [1:30] Peter Glenn. So how was the shopping experience on Peter Glenn?

Chad:  [1:33] Oh, that was actually a pretty good experience, as well.

Shaun:  [1:36] OK, great. So Chad, can you give me a little bit of background about yourself? How did you get to be where you are today?

Chad:  [1:43] Oh sure. I’ve been doing marketing of various forms for the past 15 years. I’m a native New Yorker now in the Midwest. And, interestingly enough, I actually started in the music industry. When I was in college in New York I was doing an internship program and really wanted to get into advertising. [2:09] When it came time to do an internship, there were really no good companies on the list. I started looking around on the list and I saw EMI Records, and I said, “Wow, that’s a fun place to do an internship.” So I started an internship there in my senior year, and two months into it they said, “Do you want to work here full time?” And I said, “Yes, I do.” [chuckles]

Shaun:  [2:29] Cool.

Chad:  [2:30] That turned into an interesting side track in the music industry, working at various record labels. That was actually how I ended up coming to the Midwest. And then the music industry, as you know, was going through some growing pains and some downsizing, and I actually made my way to an advertising agency here in Kansas City called Barkley, one of the largest independent agencies in the country. [2:54] And I was fortunate enough to work on some really cool clients, such as Lee Jeans, 24 Hour Fitness, Build‑a‑Bear Workshop, Minute Rice, Success Rice, and a bunch of others. And I just did the thing on the agency side, and about a year ago I started talking to the owners of the company I’m at now, U.S. Toy. It just sounded like an amazing opportunity, and came over here a year ago and I’m glad I did.

Shaun:  [3:21] Great. So tell me a little bit about the company, U.S. Toy. What do you do?

Chad:  [3:26] Cool. Well, as you can guess by our name, we sell toys. [chuckles]

Shaun:  [3:30] In the U. S.?

Chad:  [3:32] Exactly. [chuckling]

Chad:  [3:36] And well, we actually are made up of several different divisions. We have a division that does novelty toys and party supplies and seasonal merchandise. We also have a division that sells early childhood learning toys to schools and daycare centers and anyone in the early childhood field. And then we also have a consumer version of that division that sells quality toys for moms and grandmas to order for their kids.

Shaun:  [4:10] OK, so three different divisions. I believe you’ve got three different websites, too, right?

Chad:  [4:15] Yeah, we do. U.S. Toy is our novelty toy division.

Shaun:  [4:20] Yeah.

Chad:  [4:21] Constructive Playthings is our early childhood site, and CP Toys is our consumer site.

Shaun:  [4:30] OK. And so, do you guys have physical stores as well?

Chad:  [4:33] We do. We actually have eight. Our flagship store is here in Kansas City where we’re based, and we have seven others around the country.

Shaun:  [4:41] So whereabouts around the country are the stores?

Chad:  [4:45] We have two in Texas, Dallas and Houston. We also have a Denver store, an Orlando store, Philadelphia, Orange County in California and outside of Chicago in Skokie.

Shaun:  [4:59] OK, cool. Tell me a little bit about the history of the company. I believe it’s a family‑owned business that’s been around for quite a while.

Chad:  [5:06] That’s correct. Our CEOs are the third generation of owners.

Shaun:  [5:11] Wow!

Chad:  [5:12] Yeah, their grandparents started this company 60 years ago. The company started as basically a toy rack business, selling small toys on revolving racks to local drug stores and grocery stores. That business grew rapidly, and that was the U. S. Toy business. [5:33] At the same time that that business was starting, our CEO’s grandmother, she was actually a former teacher, and she wanted quality items for her classroom and had so much trouble finding quality things to help kids learn and develop. And so, she basically started this other division of the company to sell these toys to schools and educators looking for these quality items. That became the Constructive Playthings division.

[6:01] Yeah, and that was almost 60 years ago. Then in the ’80s they started the consumer division of Constructive Playthings, which is now called CP Toys, because the parents and the teachers were saying, “We love these things in the classroom, but we want these at home also.” So that basically became the consumer division.

Shaun:  [6:21] Wow. So how important is the online business relative to the in‑store business?

Chad:  [6:28] Oh, it’s hugely important and growing every day. I don’t have to tell you and your listeners how people are shopping. We know that the moms who buy our toys, they are not going to leave their houses without their marching orders. They’re doing all their research at home. They’re not going to step foot unless they know where they’re going, so we want to be in that consideration set. We’re seeing that shift just like everybody else.

Shaun:  [6:59] And so is that your typical buyer, your moms buying on the, I presume, U. S. Toy and the CP Toy sites? That’s your typical buyer, I imagine, on the Constructive Playthings which is aimed at schools, you’ve got a slightly different type of buyer, right?

Chad:  [7:12] Yeah, yeah. Absolutely. That’s an interesting one because it really is a B to B site. We call it B to I, business to institution. It’s really more schools, daycare centers, even school districts. So, more companies that are looking to use a PO. They have a budget. They’ve got to get that order checked by, sometimes, an administrator. So it’s more a B to B than our other two sites, which are definitely more consumer oriented.

Shaun:  [7:42] So with two quite different types of sites, there must be different ways of marketing and running those sites. How do you market to each of those customer segments in consumer and in institution?

Chad:  [7:54] Yeah, absolutely. The school division does have a sales staff, and it’s more traditional B to B marketing. And what we’re finding is a lot of the performance marketing tactics that work for consumer sites, they don’t really work as well for a B to B site. [8:17] Consumers will land on the site and say, “What is this? Free shipping at $400” or some of these other things that are more for institutions, and they’ll bounce right away. So it is a delicate balance to try some of those performance marketing methods but kind of scaling back when you see that they’re not really consumer friendly.

Shaun:  [8:39] Right. Can you share some numbers? How much do you sell online per month?

Chad:  [8:44] Well, it’s interesting. Giving an average because for us, we’re in the toy industry and we have some strong seasonality. That telling you how much I did would be kind of like saying, “If you stick your head in the oven and your feet in the freezer, the average temperature is 72 degrees”, right?

Shaun:  [laughs] [9:01] Yeah.

Chad:  [chuckles] [9:02]

Shaun:  [9:05] The holiday season’s obviously your big season. How much does that spike compared to the low parts of your season?

Chad:  [9:11] Oh, so for our consumer toy division, you’re literally talking mid November to mid December, it’s like 80 percent of what we do.

Shaun:  [9:19] Right. Wow!

Chad:  [9:20] Yeah, so right now we’re talking in July, and I’m already thinking about November and December.

Shaun:  [9:26] You must have to do quite a lot of gearing up, particularly on the fulfillment side, making sure you’ve got enough stock. When do you start your marketing campaigns?

Chad:  [9:34] Oh, we start now. We’re traditionally a catalog company. Our first catalog has already dropped, as of last week, so we’re starting now. We’re gearing up. We’re making sure all the new items from that catalog are here, gearing up for the busy season. And we’re already planning our November‑December offers, emails, the whole cadence in the calendar of what’s going to happen most of the month.

Shaun:  [10:05] OK, cool. What do you see as the biggest opportunities you have online?

Chad:  [10:11] I think for us, being in the toy business, we unfortunately have people that come once a year. They come during the holidays, and then we don’t see them for a year. I think for us the opportunity is in that bottom part of the funnel and talking to people and getting them to repeat purchase during the year. And to that end, we’re really working diligently to communicate to the different segments based on prior purchase.

Shaun:  [10:43] Right. Because I suppose people do buy toys ‑‑ I mean, the majority is in the holiday season, but they are buying presents for children, for birthdays or other occasions. And particularly, educational‑type toys can be bought all year round. So there must be quite an opportunity there to leverage those people you come in contact with during the holidays.

Chad:  [11:04] The B to B buyer, remember, every commercial buyer is a consumer buyer at night, right? There is that opportunity to say, “Hey, you bought this stuff for your school. Now, how about for the gifts for the kids in your life?”

Shaun:  [11:17] So how are you going about marketing to those people? Is it mainly email marketing?

Chad:  [11:22] Yeah, that’s definitely part of it. We’re really working better towards the cross‑selling and up‑selling parts of our business, just gently, just subtle reminders: “Hey, did you know we’ve got this other division.” Just a gentle execution process.

Shaun:  [11:40] Right. So tell me, do you get inspiration from other e‑commerce sites? Is there an e‑commerce site that you particularly admire?

Chad:  [11:49] You know who I really think does a great job? ThinkGeek. Are you familiar with them?

Shaun:  [11:55] I’ve seen the site. I’m not intimately familiar with them, though.

Chad:  [11:59] Not only do they just do e‑commerce really well, just from top to bottom, but they just have such a great brand and tone, and everything they do is just so on‑brand with their quirky personality. I mean, even down to the fine print of the coupon code, even that is just so on‑brand with them. It’s an e‑commerce site that’s there to sell things, but I can even go on that site just for a chuckle. [laughs]

Shaun:  [laughs] [12:30] OK. So the thing you admire about the site is the personality of the site and the consistency of that throughout all of their messaging.

Chad:  [12:40] Absolutely. It’s in their DNA, even down to the fine print. Even something as mundane as a coupon code, even that is just so on‑brand and just contributes to the whole buying experience.

Shaun:  [12:57] So what do they put on their coupon?

Chad:  [13:01] Just things, terminology that they use, like, “Because of the extreme awesomeness of this deal, we’re sorry, but we can’t do returns.” Just that whole tone.

Shaun:  [laughs] [13:14] Cool. Yeah, that’s great. Are you looking for inspiration from that site? Are there some lessons there that you’re looking to take over to U.S. Toy?

Chad:  [13:24] Yeah, absolutely, because, look, at the end of the day, we’re selling toys. We are a fun company, and I just want to get that fun brand personality across in everything we do.

Shaun:  [13:38] Cool. So tell me a little bit more about the site. What technologies are you using to run the sites?

Chad:  [13:45] Unfortunately, we are on a pretty old e‑commerce platform. It’s an in‑house platform that we’ve been on for quite a while. It’s unfortunately a little outdated, and we are actually looking to be changing platforms, and we’ll be jumping to Magento next year.

Shaun:  [14:09] OK, great. Magento seems to be getting a lot of traction.

Chad:  [14:13] Yeah. We’re in Kansas City, and they actually came down here with one of their partners and had a little seminar, and they played to a packed house. We saw a demonstration. We were just blown away.

Shaun:  [14:27] Great. So what are you going to be able to do once you move to Magento that you can’t do now?

Chad:  [14:32] A lot. Fortunately, a lot, but unfortunately we can’t do it now. I think one of the challenges for us is‑‑and it probably is the same for a lot of your smaller clients or your listeners that work at a smaller company, [14:52] We have to run a lot through our IT team. I think, for us to be successful, we need to be very nimble and be able to turn on a dime. And right now, we have to open up help tickets and funnel things through IT. So just to be able to make those changes, whether it’s the marketers or the merchandisers, that’s going to make us so much more nimble that that’s going to be where the opportunity lies for us.

Shaun:  [15:18] Right. One of the things you’ll get with Magento is the ability to make changes to your site without having to go through IT.

Chad:  [15:24] Exactly.

Shaun:  [15:25] Great. So how many people do you have on your IT team?

Chad:  [15:29] We’re pretty lean and mean. We’ve got five guys back there. You’ve just got to remember that those five guys do three different divisions, plus eight retail stores, plus we’re attached to the warehouse here. [15:46] Our DC is actually here, attached to our corporate office in Kansas City. So they do all the technology needs of the warehouse. So it’s pretty lean and mean.

Shaun:  [15:55] Yeah. So the e‑commerce is a tiny portion of their overall responsibility, and so they don’t get to spend a lot of time and effort on it.

Chad:  [16:05] Exactly.

Shaun:  [16:06] Right, yeah. That can be frustrating when there’s a lot of things you want to do.

Chad:  [16:09] Yeah, and the list doesn’t get shorter.

Shaun:  [laughs] [16:11] No, no. No, no.

Chad:  [16:13] Not with the pace of what’s happening in the marketing landscape.

Shaun:  [16:17] It changes very quickly. So, apart from Magento, are there any other changes you’re looking to make?

Chad:  [16:22] Yeah. I just think, in terms of our overall strategy, like I said, we’re historically a catalog company. The company, until I came on board, there really wasn’t even a marketing department. So I was brought on board to, basically, start a marketing department and really start analyzing our marketing mix. [16:47] The thing we’re really looking to do is find that right medium between the traditional catalog marketing and the newer online performance marketing, and just find that happy median between the two.

Shaun:  [17:03] Right. Yeah. And that’s not an easy thing to do, necessarily, is it?

Chad:  [17:07] Well, it’s not, because you can’t go cold turkey on the catalogs, right, because you’d fall off a cliff. But you can’t go too slow either, because we’re all just playing catch‑up to our pure‑play e‑tail competitors, right? So we can’t just let those guys get so far ahead of us. It’s finding the right balance.

Shaun:  [17:30] There’s obviously a lot happening in e‑commerce. How do you keep up with the latest trends?

Chad:  [17:38] I think just some of the trades, the ones that everyone’s pretty familiar with. I just sign up for all the email alerts and kind of move them over to a little folder and then find some downtime and check them out.

Shaun:  [17:52] Makes sense.

Chad:  [17:54] I also try to get to a convention or two, if time allows.

Shaun:  [17:58] Right. What was the last one you went to?

Chad:  [18:00] I just went to the Internet Retailer Conference in San Diego.

Shaun:  [18:03] Right. It was a big show, wasn’t it? How did you enjoy it?

Chad:  [18:06] I enjoyed it. I was the only one from my company to attend, so it is overwhelming. [laughs] It was definitely a great show and learned a lot, but with 20 rows of vendors plus four concurrent sessions, it’s a lot to take in. You’ve got to pick and choose what you could do over two days.

Shaun:  [18:26] Yeah. So you’re thinking that next time you should bring some more people from your company along…

Chad:  [laughs] [18:29] Exactly.

Shaun:  [18:31] Yeah. Well, it can be a good way to get some executive buy‑in into some of the things you want to do as well, by getting them to attend that show.

Chad:  [18:39] Yeah, absolutely. I went in with a mission, and I talked to all the people I needed to talk to. [laughs]

Shaun:  [18:45] Great. Now, you’re also an SLI customer. How have you found working with SLI?

Chad:  [18:50] It’s been great. Not only has it been great, just from a site‑search experience, which we desperately needed, but we found an unexpected benefit, which we worked with the SLI team on, with cross‑linking to our sister sites, and it has proven to be a great success for us. [19:12] Our divisions, we have Constructive Playthings and CP Toys. CP Toys just recently changed their name. They both really had the Constructive Playthings name, and we know our customers were so confused with two sites with the same name.

[19:32] Getting site search and being able to have those reports through SLI, we even saw it firsthand, not just from the calls to customer service, but being able to look at those results of site search and see, “Wow, they’re on this consumer site and they’re typing in the name of a product on the B to B site,” or vice versa.

[19:50] So we’ve been working with the SLI team. And they actually showed me another client who was cross‑linking results to a sister site. As soon as I saw that, I said to myself, “Oh yes, we have to do this, too.” We worked with the engineers and worked with our account teams, and we came up with a great solution that has just worked wonders for us.

Shaun:  [20:18] Tell me a little bit how that works. So if you search for something that’s on the B to B site when you’re on the consumer site, you can still find it. Is that right?

Chad:  [20:28] Absolutely. So if you are on B to B site and you type in a doll that’s only on the other site, you’ll actually see a little message that says, “Constructive Playthings does not carry this product, but our sister site, CP Toys, does. By clicking on the item below, you’ll be leaving this site and starting a new shopping cart there.” [20:50] We’ve actually found that due to that cross‑linking, we now are capturing about 10 percent more revenue than we would have without it. So that was all money that we were totally leaving on the table before we had this solution.

Shaun:  [21:09] Fantastic. Great to see some numbers like that.

Chad:  [21:11] Yeah.

Shaun:  [21:13] I think, on that positive note, we can probably wrap it up there. So Chad, I just want to thank you very much for your time today. Some really interesting stories. You’ve got some interesting challenges ahead, and I wish you all the best for the Magento implementation in the coming year.

Chad:  [21:28] Thanks a lot. It’s been my pleasure. Hope to talk again soon.

Shaun:  [21:30] Excellent. That was Chad Coleman from U.S. Toy, and I’m Shaun Ryan from SLI Systems, and that was the E‑Commerce Podcast.