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Delivery sleigh hits skid
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December 23, 1999: 5:25 p.m. ET
Toys R Us site takes beating after coming up short on Xmas orders
By Rob Lenihan
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NEW YORK (CNNfn) - This is not a good time to be Geoffrey the Giraffe.
The mascot for Toys R Us Inc. (TOY) is living the nightmare before Christmas after the No.2 toy retailer said Wednesday that its Web site Toysrus.com would be unable to deliver an undetermined number of orders placed on or before Dec. 10 due to overwhelming volume.
"We had a flood of orders and were basically overwhelmed,” Doniece Sandoval, a company spokeswoman said Thursday.
The Paramus, N.J.-based company said in a statement that only a small number of its online customers received an e-mail offering them an opportunity to cancel their orders. All affected customers, whether they canceled their orders or not, Sandoval said, will receive 100 "Geoffrey dollars” toward purchases online or at the retail stores.
Toysrus.com has seen explosive growth over the last year, with Media Metrix (MMXI), the Internet measurement company reporting the site had a 373 percent increase in traffic over last year.
Sean McGowan, a toy industry analyst at Gerard Klauer Mattison in New York, said Thursday that the incident is a public relations disaster.
McGowan said the company’s site has only been up for a year and John Barbour, who runs the site, just came on board in August.
"It was a really bad estimate of what kind of traffic they were going to have,” he said. "People may be a little hesitant next year unless Toys R Us can prove the problem has been fixed.”
Other online toy sellers said they established cut-off dates for online shoppers, warning that items might not arrive for Christmas after a certain time.
"The warehouse is clean and we have moved on to post holiday orders,” said Srikant Srinivasan, founder and chief executive officer of KBkids.com in a statement.
Paul Capelli, spokesman for Seattle-based Amazon.com (AMZN), said specific information about gift delivery and availability is listed on the site "so people are not surprised.”
In addition to Amazing Ally and Pokemon, Capelli said millennium-related items, such as Millennium Barbie and Millennium Monopoly are big sellers.
Jonathan Cutler, spokesman for eToys Inc. (ETYS), said the company had a significant surge in orders this year and was able to satisfy most of them.
"There’s always room for improvement,” he said. "There was a very small percentage of back orders. We were working around the clock to deliver Christmas.”
Tom Vellios, president of Zany Brainy Inc. (ZANY), said the company launched its Web site in November—late in the day by e-commerce holiday standards—but he said the site has been a success and was named as one of the top five toy e-retailing sites by Internet research company Gomez Advisors.
"Our objectives was to make sure we met the expectations of our customers,” he said.
What next for Toys R Us? McGowan of Gerard Klauer Mattison said Web site revenue is only a small percentage of the overall sales picture.
"People order from catalogs and things go wrong,” he said. "It happens with other Web sites. I guess with toys, it’s different. If you can’t deliver for little Johnny or little Mary on Christmas, there’s not a lot of patience.” 
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