The Juvenile business at Toys R Us was tough and promotion alone was not going to pull the business back into profitability. Working with our analytics partner we re forecasted the business based on re segmenting the file and took a very different approach to acquisition and retention.

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JUVENILE BUSINESS REVIEW
KEY ISSUES FOR THE BUSINESS
Prepared by
Barbara Canning Brown
Jun 14, 2009, rev 2

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1. Background:
1.1 Steady declines in the Juvenile business
2. Challenges:
2.1 Current mail volume will not support forecast sales
2.2 Business planning direction at odds with trendlines
2.3 Marketing performance scores are decling
2.4 RFM segmentation test results will not offset business
losses
2.3 Harte-Hanks recommendations are inadequate
3. Next Steps
Appendix
• Juvenile trendline analysis
•Juvenile RFM segmentation
•Juvenile net customer loss analysis
•Business intelligence forecasts
MEETING DISCUSSION

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JUVENILE BUSINESS ANALYSIS
Juvenile
merchandise
analysis results
showed steady and
significant declines
of Juvenile product
lines sales.
All segments show
YOY declines to a
total of -$36M in
total sales.
GROUPS
SALES HH % Total HH
-$1,299 -3,489 55.77%
-$713 -634 10.13%
-$50 -188 3.01%
-$157 -147 2.35%
TOTAL -$2,219 -4,458 71.26%
-$2,106 -1,212 19.37%
-$2,018 -750 11.99%
-$1,085 -456 7.29%
-$1,757 -786 12.56%
TOTAL -$6,966 -3,204 51.21%
-$1,304 -617 9.86%
-$1,806 -476 7.61%
-$2,071 -458 7.32%
-$5,032 -712 11.38%
TOTAL -$10,213 -2,263 36.17%
-$177 -338 5.40%
-$1,002 -387 6.19%
-$2,104 -323 5.16%
-$18,312 -1,522 24.33%
TOTAL -$21,595 -2,570 41.08%
$1,365 126 -2.01%
$510 41 -0.66%
$129 -48 0.77%
$4 -36 0.58%
TOTAL $2,008 83 -1.33%
$1,922 251 -4.01%
$2,088 166 -2.65%
$1,294 113 -1.81%
$1,632 136 -2.17%
TOTAL $6,936 666 -10.65%
$229 14 -0.22%
$1,026 75 -1.20%
$2,041 19 -0.30%
$5,349 202 -3.23%
TOTAL $8,645 310 -4.96%
-$740 3 -0.05%
-$892 -30 0.48%
$922 80 -1.28%
$24,139 1,432 -22.89%
TOTAL $23,429 1,485 -23.74%
-$457 26 -0.42%
-$210 -23 0.37%
-$115 -7 0.11%
-$101 1 -0.02%
TOTAL -$883 -3 0.05%
-$497 17 -0.27%
-$912 -70 1.12%
-$735 -89 1.42%
-$1,335 37 -0.59%
TOTAL -$3,479 -105 1.68%
-$81 -5 0.08%
-$554 2 -0.03%
-$955 39 -0.62%
-$4,811 283 -4.52%
TOTAL -$6,401 319 -5.10%
-$316 144 -2.30%
$1,197 355 -5.67%
-$870 244 -3.90%
JUVENILE
3
4
5
6
1
2
11
12
7
8
9
10

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JUVENILE MARKETING PERFORMANCE
Marketing developed alternative panel tests to offset
losses and pushed to market aggressively based on
the following:
LOYALTY CUSTOMIZATION TESTING-- OFFER AND CREATIVE
IN HOME EVENT FORMAT
SEGMENTATION
PANELS
OFFER PANELS CREATIVE PANELS
23-Nov-09 Holiday Offer Postcard Postcard
NON-MEMBERS -- Sign up for Loyalty and
get(1) $10 off 100; (2) $25 off $250.
MEMBERS -- Double rewards, get $5 when
you spend $75
(1) MEMBER unique creative version
(2) NON MEMBERS unique creative
version -- 'sign up!'
27-Oct -09 November Juvenile 24-page Slim Jim
23-Nov-09 December Juvenile 24-page Slim Jim
23-Nov-09 January Juvenile 16-page Digest
23-Nov-09 November/December Best Guest Mailer 4-panel postcard
NON MEMBERS -- Sign up for Loyalty and
get 15% off one baby item.
MEMBERS -- Double rewards, get $5 when
you spend $75
(1) MEMBER unique creative version
(2) NON MEMBERS unique creative
version -- 'sign up!'
NON MEMBERS -- Sign up for Loyalty and
get 15% off one baby item.
MEMBERS -- Double rewards, get $5 when
you spend $75
(1) MEMBER complete cover version
(2) NON MEMBERS cover offer
presentation of 'sign up!'
(1) Toy vs.
Juvenile;
(2) loyalty
member vs. non-
member;
(3)
High/Medium/Low
value

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JUVENILE CUSTOMER TRENDLINE
Despite the aggressive marketing push Juvenile
customer trendlines continued to decline.
Of critical importance is the decline in the Best customer
segments (10% of customers) which drive over 30% of
sales.
Inconsistent funding of marketing acquisition exposes the
business to ongoing weakness and risk.
R F M HH $ AUS HH $ AUS AUS HH $ AUS HH $ AUS
1 1 1 103,861 $10,461,505 $101 100,416 $10,132,310 $101 98,166 $10,091,925 $103 96,164 $10,060,827 $105 90,787 $9,819,897 $108
1 1 2 21,347 $1,486,039 $70 19,670 $1,339,487 $68 18,643 $1,284,249 $69 17,664 $1,223,548 $69 16,870 $1,186,045 $70
1 1 3 7,029 $438,835 $62 7,082 $436,135 $62 7,060 $434,184 $61 7,176 $468,617 $65 6,682 $439,880 $66
1 1 4 8,611 $437,145 $51 8,174 $409,124 $50 8,034 $419,591 $52 7,816 $424,852 $54 7,484 $421,641 $56
TOTAL 140,848 $12,823,524 $91 135,342 $12,317,057 $91 131,903 $12,229,949 $93 128,820 $12,177,843 $95 121,823 $11,867,462 $97
1 2 1 56,812 $1,547,637 $27 56,315 $1,527,551 $27 57,691 $1,628,421 $28 57,783 $1,678,446 $29 53,829 $1,622,522 $30
1 2 2 51,352 $1,740,128 $34 47,771 $1,564,346 $33 46,115 $1,542,051 $33 44,553 $1,535,416 $34 41,976 $1,487,444 $35
1 2 3 28,748 $1,023,920 $36 28,586 $990,182 $35 29,800 $1,042,354 $35 30,147 $1,077,990 $36 27,705 $1,041,994 $38
1 2 4 52,591 $1,738,485 $33 50,595 $1,634,492 $32 49,281 $1,605,063 $33 48,512 $1,599,394 $33 45,730 $1,520,790 $33
TOTAL 189,503 $6,050,169 $32 183,267 $5,716,570 $31 182,887 $5,817,888 $32 180,995 $5,891,246 $33 169,240 $5,672,751 $34
TOTAL BEST CUSTOMER 330,351 $18,873,693 $57 318,609 $18,033,628 $57 314,790 $18,047,838 $57 309,815 $18,069,089 $58 291,063 $17,540,213 $60
FEBOCTOBER JANUARYDECEMBERNOVEMBER
STRATEGIC GROUPS
BESTCUSTOMER
GROUP
2
1

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JUVENILE BUSINESS TRENDLINE
Overall the trend for the business is not good. Net
contribution has begun to increase as unit sales fall and
fixed overheads rations drop out of balance.
Comp sales have declined as follows;
•Q4 2008, -3.5%
•Q1/2 2009, -7.2%
.

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JUVENILE RECOMMENDATIONS
1. Align acquisition expense to sales forecasts by
bringing forecasting into the conversation,
2. Re balance overall marketing spend to focus the
RFM segmentation on the top 1/3rd
of the active
customer file
3. Base all mailings on the value scoring RFM
segmentation. Eliminate use of the demographic
and Decile segmentations. They are hurting the
business
4. Create an action team of marketing, finance and
merchant to monitor the situation and report to the
executive committee.

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DISCUSSION AND
NEXT STEPS