I think that you under estimate the position of Toys R Us, and the long term threat they pose to eToys. Consider my Christmas shopping dilemma.
Most of my nieces and nephews live on the east coast, I am in Ca. Generally, I would buy from Toys R Us, and ship, knowing that if they did not like the gift, they could drive to the local store and exchange. eToys could have been compelling for convenience sake for me, but to exchange an unwanted or defective gift would not be simple for the recipient child. Now, I can buy online from Toys R Us at comparable price as eToys, and my family can easily exchange the gifts at the local TRU store. It really is a no brainer.
And, then consider from a 5 year old's perspective. Imagine being 5, would you want to go to the web, look at slow load low res bitmaps, order and wait n days for that toy, or would you prefer to have mom or dad drive you to the local toy store where you can get hands on experience with the toys, and instant gratification.
When you consider that Etoys has double the market cap, and a very small fraction of the revenues of Toys R Us, it should not be difficult to see where this company is heading. A less than stellar holiday, and eToys will be OTC. |
