In December, Toys ‘R’ Us opened its first store in mainland China with great expectations that the largest emerging consumer market in the world would rush to embrace its mascot Gregory. But just a few weeks later, as the big ball on Times Square descended to complete the countdown to the New Year, Toys ‘R’ Us and sister Babies ‘R’ Us became embroiled in the first costly, and easily avoidable, public relations catastrophe of 2007--a crisis that contains key lessons for conducting marketing public relations in the 21st century.
It seems that three babies qualified for the First Baby of the Year Sweepstakes, so Toys ‘R’ Us flipped a coin to award first prize, a $25,000 U.S. savings bond earmarked for college education, to Yuki Lin, a Chinese American baby girl. But upon learning that the baby’s mother was not a legal U.S. resident, and therefore not eligible per the fine print, Toys ‘R’ Us withdrew the award. (The two runners-up were awarded $100 gift baskets).
Then, bowing to intense pressure from the U.S. and global Chinese communities, as well as in response to more than 500 negative stories in the media, Toys ‘R’ Us reversed its decision on Jan. 7 and awarded each of the three New Year’s babies a $25,000 savings bond.
This might appear to be a smart, timely turnabout, but some of the blunders committed in this inexpensive PR stunt may take years of concerted, and expensive, effort to reverse. Let’s examine a few of the issues that Toys ‘R’ Us should have taken into consideration.
Beware the power of word of mouth
“Time” magazine’s recent proclamation of “You” as its 2006 Person of the Year takes note of the Internet communications paradigm shift that has put individuals firmly in charge when it comes to consumer power, personal creativity, and political action. In this instance, the power of the Chinese “You” demonstrated the power of word of mouth as marshaled by attorney Albert Wang in his e-mail campaign, which virtually overnight spread outrage globally and raised the specter of racism that embarrassed Toys ‘R’ Us on its entry into the Chinese market.
China, the next great market
Why did Toys ‘R’ limit the First Baby of the Year Sweepstakes to the U.S. when it might have been extended to China (notwithstanding that the Chinese New Year doesn’t occur until next month) as a token of appreciation of its market entry and recognition of the importance of education in Chinese society?
Emerging majorities
Every college sociology student knows that three ethnic groups (Latinos, blacks, and Asians) now make up a majority of Americans, so it comes as little surprise that of the other two New Year’s babies, one was black and the other Latino.
PR’s seat at the table
It seems apparent from the self-created crisis that public relations personnel had little input or influence among the planning group for the Toys ‘R’ Us New Year’s promotion. The fine-print disqualification smacks of typical corporate legalese and sales-promotion agency self-protection verbiage, which this case has shown to be completely out of sync with immigration and population trends, something enlightened PR counsel might have warned of. In this age of individualism, every program must be customized and reviewed with a fine-tooth comb to meet the needs of its intended audience.
A truly meaningful award
The initial grand prize of one $25,000 savings bonds (later expanded to include the three New Year’s babies) required a cash outlay of but $12,500 on the part of Toys ‘R’ Us in the hopes of potentially of millions of dollars in free publicity. But corporations should be more realistic. With college costs rising nearly 11% a year, when this year's newborns enter college in 2025 they will face an average four-year cost of $100,000. Had Toys ‘R’ Us awarded the full $25,000 today, judicious investment or a 529 savings plan would have reaped a much higher return for the winner while demonstrating a more developed corporate consciousness on the part of the sponsor.
Even after the recriminations of the media and word of mouth die down, what was conceived as an inexpensive program to usher in the new year with good feelings all around will have proven to be, through its inherent lack of inclusiveness and sensitivity, yet another textbook case of how not to conduct PR in the new “You” era.
Len Stein is president of Visibility Public Relations (www.visibilitypr.com), a PR agency based in New Rochelle, NY.
