In its second-largest acquisition, Amazon buys the company for $970 million.
SmarterKids.com sells toys, but leaving the “t” word out of the URL was no oversight. The company wants to supply parents with many tools-not just toys-to help their children learn. “We consider ourselves an educational destination a whole lot more than a store,” says Al Noyes, the site’s executive vice president of sales and marketing. “We’re a combination Sylvan Learning Center and eToys.”
“They are going beyond selling toys,” agrees Liz Leonard, senior analyst at Gomez Advisors, Lincoln, Mass., which chose SmarterKids as the top educational toy site on its Internet Toy Scorecard. “They really are a specialty player.”
At first glance, the home page doesn’t differ much from eToys or Toysrus.com. Shoppers can search for merchandise based on age and grade, by keyword, by themes like construction and pretend play, by brand, or by character, such as Barney. Nonparents stumped over finding an age-appropriate gift, can head for the gift center or the online registry for help-more features offered by rivals.
But look closer, and you see that the site’s huge selection of learning toys is also searchable by skill and subject, such as alphabet, counting and writing. And to Noyes’s point, SmarterKids is packed with educational content. The “parents center” is a hub for news, activities, links to other sites, articles and columns to help moms and dads inspire their children to turn learning into a fun, ongoing pastime, not a classroom-only event.
The site’s free specialty centers, housed within the parents section, dole out information on talented and gifted children as well as those with special needs. For kids in the latter category, the offerings include fact sheets on autism, visual impairment, learning disabilities and attention-deficit disorder, along with recommendations for toys that nurture children with those needs. A step-by-step guide helps parents determine whether their child fits into one of the special needs categories. Similarly, the gifted and talented center features resources, toy recommendations and tools for building aptitude in math, science, written and oral communication, and the arts. Both sections include “ask our teacher,” a feature that allows parents to query a resident educator.
Add to that “grade expectations,” a set of simple guidelines and product recommendations based on the top educational goals and milestones for kids from preschool to sixth grade. The preschool category breaks out tots’ skills into social/emotional, language, motor and cognitive. Clicking on any of those categories takes you to a list of skills for that subset, and a button that brings up a roster of suitable products.
But an opportunity missed in customizing the site is hardly lost in describing what’s for sale. Every piece of inventory includes an in-depth review by a teacher on staff, a number rating, and rankings by ease of use, fun and depth. On top of that, there’s a list of learning styles to which it caters and skills it fosters; the educational approach, and suggestions for how parents and children can use the product together. More than a dozen former educators make up the company’s team of reviewers and experts.
On the minus side, the home page is busy, and the design doesn’t telegraph the relative importance of each section. Luckily, the site’s main sections-MySmarterKids, the parents and gift centers, help, and the shopping cart-are always accessible via a traveling navigation bar at the top of each page. Most pages also include a search box below the navigation bar. Clicking on help takes you to a page of FAQs on payment, placing and tracking an order, returns, gift center features and other tips. There’s also a link to e-mail customer service if the FAQs come up short.
Doing the math
In the bigger performance picture, SmarterKids also has made the grade-and raised earlier ones. The site tallied $4.3 million in revenue during the last quarter of 1999, far outpacing the $22,000 recorded for the same period in 1998. Its fourth-quarter total also accounted for the biggest chunk of $5.4 million in yearly revenue, but even that respectable increase was overshadowed by eToys, which had sales of nearly $107 million during the quarter, up 366% from 1998.
On a typical day, 35,000 unique visitors stop by SmarterKids, adding up to about 1 million a month, although those figures inflate during the holiday season-2 million visitors came to the site last December. Of those, anywhere from 2 to 10% convert from browsers to buyers, according to Noyes.
Although SmarterKids has a clear niche and offers more content and customization than competitors, Pam Stubing, a retail analyst with Ernst & Young, is skeptical it can survive the cutthroat online toy market. “The site is charming, but I don’t think it’s absolutely essential,” she says.
Big players such as Wal-Mart, eToys and Toysrus, adds Stubing, “could easily roll over SmarterKids” if they branch into educational toys. Her suggestion: SmarterKids could partner with a big bricks-and-mortar toy seller or else tie in with “all the mom-and-pop toy retailers out there” and set up a purchasing co-op, transforming itself from a retailer to a wholesaler.