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Kids Today July 2006 Magic Beans Customer Based Enchantment

Customer-focused enchantment at Magic Beans - Part 1 Customer-focused enchantment at Magic Beans - Part 2 Customer-focused enchantment at Magic Beans - Part 3 Customer-focused enchantment at Magic Beans - Part 4


Kids Today
July 1, 2006
"Customer-focused enchantment at Magic Beans"
Special services, product selection and knowledge help drive sales.


The cliche is when one door closes another opens, and for Sheri Gurock, that's literally what happened when she opened Magic Beans in Brookline, Mass., in 2004.


Then a stay-at-home mom with a toddler and another baby on the way, Gurock was a frequent shopper of the local toy stores, which were all going out of business. In November 2003 Toys "R" Us announced it was closing one of Gurock's favorites, Imaginarium.


"I hung out at Imaginarium all the time, it was the last decent toy store left in town, : Gurock said. "When I found out it was closing, I hatched the idea to open my own toy store."


Realizing a store couldn't make it in the high-rent location just selling toys, Gurock decided she'd have to incorporate other categories into the product mix. She also was inspired after a visit to Galt Baby+Galt Toys in Chicago, a retailer that's since become a mentor and friend.


Gurock's stroller obsession (she collected 12 strollers before her daughter turned a year old) gave her inspiration for what's proven to be a healthy part of her business. She attributes her collection making a lot of poor choices in the beginning, and she said she's actually become known as a stroller expert because of her first-hand knowledge.


Magic Beans carries toys (which represent about 70% of the floor space) along with strollers, infant furniture, car seats, slings/carriers, textiles, accessories and more. Strollers, car seats, furniture and infant toys are the best-selling categories, but business is doing well all around; the store is up 40% over last year.


Gurock came up with the name Magic Beans in her previous career working for a branding company.


"Before I had my first child I worked for a branding company during the height of the Internet bubble, " Gurock said. "I named products and companies and on name I came up with was Magic Beans. It was still available when we decided to open a store and I love it because it's like an empty vessel we could fill with meaning; it's rich with metaphors for design and branding and not product specific."


Gurock and her husband, Eli, have found many ways to distinguish their store from other retailers. It starts with the product mix and their commitment to categories.


Magic Beans not only carries strollers, it also has stroller matchmaking and test-driving services, a vendor authorized stroller repair workshop and free assembly.


"When it comes to the strollers, we'd really rather assemble them for our customers," Gurock said. "It's not infrequent that there's a quality issue or missing part and we can take care of that on the spot if we assemble it rather than have a customer drive two hours, get home and discover a missing wheel. We wan them to walk away happy, not frustrated."


Eli and an employee also are certified car seat installers.


A well-educated and enthusiastic staff is integral to Magic Beans' success. Initially Gurock thought her best bet was to hire mothers to work in the store but quickly realized hiring her target customer wasn't the best choice. Instead she looked for younger people who were excited about kids and learning.


"Our staff is so enthusiastic about the products, " Gurock said. "They want to know every detail so they can help the customers make the best decisions."


Gurock said another thing that sets her store apart is the fact that she and her husband are parents --Audrey is 4, Mira is 2 — and avid shoppers themselves.


"We love to shop and we're very discerning," she said. "When we opened the store we really knew what we wanted the customer service experience to be like based on what we want when we shop. Although after two years of seeing what customers can and will do it's hard to keep that empathy, it's critical to our success. Parents have so many options and information; they're overwhelmed. We can speak first-hand about the pros and cons of product and we've trained our staff to do the same."


Magic Beans also has dedicated a fair amount of space to a gated play area, but it's not just as place to drop the kids while mom shops -- it's open to the public. gurock said the paly area is often packed on rainy days, filled with nannies and their charges.


"We encourage people to hangout there even if they aren't buying anything, " she said. "We know those nannies who come in every day for the play area will come back when it's the child's birthday and shop with us."


Shoppers also can take advantage of free gift-wrapping, and the store has free delivery to local hospitals on purchases that are more than $99, a big market for Magic Beans. People shop for gifts and accessories on their way to the hospital, but it's not unusual for Magic Beans to deliver car seats to expectant parents caught off guard by an early delivery.




Gurock avoids putting products on sale for the most part. If an item seems to be a slow mover she follows her 1-2-3 approach -- re-merchandise, highlight the product with staff to generate enthusiasm and then mark it down.


"Occasionally if we have a slow mover that we have a lot of confidence in, we'll give one to a well-connected mom," she said. "We ask her to try it out, give us her feedback and if she likes it she keeps it and spreads the word to her friends."


Once a year Magic Beans participates in a merchant's sidewalk sale and it also donates a lot to charity organizations.


Like most juvenile stores, the target audience is parents and kids, and Magic Beans has something for children from birth to 12-13 years old. Gurock said her store is targeted mainly to the Gen X parents (and their Baby Boomer parents) who are educated, savvy and very into their kids. This group, Gurock points out, is also very well connected and they network online and in person, which has its pros and cons. If you click with one, their word-of-mouth kudos are like money in the bank, but if you blow it with one, it spreads like wildfire and they'll tell 100 people in a week.


Magic Beans carries a lot of more modern looks -- something her target audience prefers -- and she said this evolution started when Bugaboo opened the door for the high-end juvenile market.


"Parents have started to completely change their mindset about what to spend on their nurseries and gear, " Gurock said. "By the time I had my second child, it was normal to have higher-end products. More moms and dads are staying home with the kids now and they aren't just outfitting for nannies or day care but themselves and they're looking for fashion as well as portability. It doesn't hurt either when they see celebrities using the same products."


Magic Beans reaches potential customers via its Web site and Gurock's blog, Spilling the Beans, an e-mail newsletter and community involvement. Last year Gurock hosted a lot of in-store events but discovered she was preaching to the choir since the events drew the same customers rather than new ones. Now she reaches out to new moms groups, day care centers, schools and fitness clubs.


"We have a local gym that has a wonderful prenatal fitness program," Gurock said. "I give lectures there on infant gear, how and what to buy, etc. It's a good partnership."


The store also hosts story time twice a week for 3- to 5-year-olds.


Gurock has learned in the two years since her store opened that she doesn't need to rely heavily on advertising.


"When we first opened we made the mistake of spending too much on advertising," she said. "We have a marquee location on a highly trafficked street, a main thoroughfare leading to the hospitals, we didn't need to advertise that much. We also have a wonderful word-of-mouth presence."


After the first year in business the couple debuted its Web site. Gurock said it accounts for a small percent of sales, but it provides a lot of interaction and information. One great benefit to the site is customers can order online and shipping is free on sales of more than $99. The site features a nursery designer option, which has increased traffic, and the store is getting more and more calls from people all across the country.


Though Gurock doesn't invest a lot in advertising, she does believe in good public relations and works with a publicist. She said investing in an online Intranet was one of her best business decisions.


"Communication with staff and customers was a huge problem in the beginning," Gurock said. "We started out writing notes on scraps of paper, then in notebooks and binder; it got out of hand. We invested in the technology for Web-based databases and we use it for everything from special orders and customer requests to staff communication. It really saved us."


Magic Beans was much busier than Gurock anticipated. "We thought we'd have time to sticker, remerchandise, etc., but it was wall-to-wall people in here. We had to get a warehouse because there was no room to unload boxes in the store."


Of her staff of 25, three full-time people work in the warehouse and one full-time person works in the stroller repair shop.


Gurock's worst business idea was one out of inexperience. Though she and her husband had a great concept for their store, neither had retail experience and when they opened the doors they thought they needed to hire people who did to compensate for that.


"We had strong ideas of what we wanted our shopping experience3 to be, but we didn't have faith in ourselves to reinvent the wheel, so we tried hiring people with more experience than we had," Gurock said. "it didn't work; it didn't jive with how we wanted it to be. They tried to bring in their ideas and it didn't fit with our model. We realized we needed to learn every aspect of the business and hire young, smart, willing people we could train."


The Gurocks rotated working every job from running the warehouse to managing the store until they knew the ins and outs of all aspects of hte business. Armed with this knowledge they developed their own processes and taught their staff.


"Today we spend a few hours a week in the store, but for the most part our store manager runs it," Gurock said. "operating the business is our full-time job and we spend two full days each in the office and two days we each leave around three and one day a week we're home with the kids."


Gurock's biggest daily challenge is keeping up with her messages and e-mails. As a mom who witnessed other stores' complacency, she can't bear to leave a message or e-mail unanswered.


"I have to look at every thing and I have to keep my eye on what's new and exciting in order to keep the store fresh, " she said. "Since my children aren't babies anymore, I have to keep up with what's going on with new moms, what they're talking about."


Buying is, for Gurock, the most enjoyable part of her job. She thrives on the relationships she's formed not only with other retailers, but also with vendors. Our vendors want to know what we have to say because they know we really listen to our customers."


Gurock also still enjoys working directly with the customers, especially fixing problems.


"Even with a great staff mistakes happen," she said. "I'm a pretty high maintenance customer myself so when there's a problem I know how I'd want it handled and I love it when I can turn a bad situation into something good. People get upset and you can't change that, but you can make it better, turn the situation around and have them come back."


Magic Beans at a glance


Founded: 2004
Headquarters: Brookline, Mass.
Stores: One brick and mortar with 3,400 sq feet of selling space and a Web site,
Employees: 25
Average annual sales: Sales for the first 12 months in business were 27% above expectations; 2005 sales were 58% higher
Price points on cribs: Mid- to high-end contemporary; cribs start around $600
Vendors: Stokke, Nurseryworks, Caribou, Gustav Maxwell, Baby Bjorn, Skip Hop, Fleurville, Maclaren, Combi, Peg Perego, Inglesina, Valco, Mountain Buggy, bumbleride, Phil and Teds, BOB Trailers, Rock Star Baby, Easy Walker, Tiny Love, Manhattan Toys, Small World toys, Brio, Britax, Kid O, Bruder, Deuter and more
Percent of budget spent on advertising: Less than 1%
Advice: "Make sure you can see the forest for the trees; don't get hung up on the bottom line. Customer service comes first; if you have happy customers, everything else will fall into place."