Case Study: Hasbro and Collaborating for Profit - ' Getting Smarter '

Getting Smarter

Sure, Hasbro, like No. 1 Mattel, does quite well in retail stores, selling nearly 30 percent of its toys through high-powered distributors like Wal-Mart and Toys "R" Us. Analysts have said however, that Hasbro also needs to learn more about customers directly and get a whole lot smarter about the Web.

Enter Hasbro chief marketing officer Ed Kriete and CIO Doug Schwinn, hired within months of each other in 1999. One day that year, they found themselves, by chance, sharing a car ride to a business meeting in Boston. During that trip, both men recall, they discovered they shared similar views about what was broken at Hasbro—and how to fix it.

Enemy No. 1, both men agreed, was Hasbro's uncoordinated and costly online initiatives, born during the reckless early days of the Internet boom, when experimentation and payouts were running high. Besides there being too many sites showcasing individual brands—55 just for toys and games alone—only two were actually generating sales and customer data. "Everybody (at Hasbro) was putting up Web sites to put up Web sites, but there was no e-commerce," Kriete recalls.

Under the old Web strategy, customers could register and tell Hasbro the basics—their addresses, birth dates, the gender of their children, e-mail addresses and product preferences—but Hasbro brand managers, as it happened, weren't actually doing anything with the data. "These weren't bad people," Kriete says. "It's just that the previous Web strategy wasn't really a strategy at all. It was driven by the need for speed. You had to have Web sites to gain market advantage, everyone believed. But nobody really knew what they were doing, and some didn't really understand why."

So Kriete and Schwinn brainstormed over how Hasbro needed to overhaul its entire marketing strategy, and in Kriete's words,"rebuild the house"—use the Web not simply to showcase various toy brands, but to cross-sell them, gather customer data, drive traffic into retail stores and set up online focus groups to establish customer-driven innovation.