New Toy E-tail Champ Emerges

Educational toy e-tailer SmarterKids has narrowly edged out the powerhouse partnership of Toysrus.com and Amazon.com to secure the title of best online toy and game seller overall, according to Forrester Research rankings released Monday.

Forrester said SmarterKids won its first-place showing by the "tiniest of margins" due to the wealth of instructional information it provides and the fact that the Web site allows consumers to tailor purchases to a child's skill level.

Researchers conferred a 66.17 rating upon SmarterKids -- less than one point ahead of Amazon's 65.90 -- in its latest "PowerRankings" index.

The index gauges e-tailer performance on a 100-point scale across a host of different categories. Researchers said Amazon's continuing "customer service failures" effectively shut it out of the top spot.

Rounding out the top four toy e-tailers were eToys, which scored a 64.96, and KBKids, with a 60.15 rating.

E-tail Lessons

Despite its top placement, the SmarterKids site is not for everyone.

"SmarterKids just eked out a victory, but its limited product selection curbs its appeal," said Forrester senior analyst Tom Rhinelander.

For instance, Forrester said the e-tailer's educational focus means it does not sell popular items. The research firm also faulted the site for the lack of external product reviews and the ability to cancel orders online.

In Forrester's breakdown by category, SmarterKids ranked first in delivery and usability, while Amazon led the pack in transaction efficiency. eToys and KBKids.com tied for top honors in customer service.

Down for Count?

"By joining with Amazon.com, Toysrus.com dramatically improved its score over its previous ranking," said Rhinelander. "If Amazon's customer service had not faltered, the partners could have enjoyed a victory."

Amazon's sluggish customer service has also caused the Internet bellwether to stumble in Forrester's other categories. Earlier this month, it was bested in the music category by Tower Records. In addition, last month Amazon.com was beaten by Buy.com in the electronics rankings, by Borders in the bookseller department, and by Express.com in the movies category.

Despite its sheer size and well-known brand, Amazon.com does not hold the top ranking in any of Forrester's e-tail categories. However, many would argue that the rankings are based on subjective surveys, and that being one point off the lead in such a ranking system is not significant.

To compile its PowerRankings of leading U.S. e-commerce sites, Cambridge, Massachusetts-based Forrester surveys consumers about their transaction experiences and conducts independent shopping tests. Approximately 20,000 online buyers were polled for its toy seller survey.

No Playground

The toy market has proven to be a brutal battleground in the e-tail arena.

On Friday, eToys said it will miss its revenue estimates for the third quarter and announced plans to slash its workforce next month in a bid to slow its cash burn rate. The firm blamed slower-than-expected holiday sales for its revenue shortfall.

eToys said it will have net sales of US$120 million to $130 million for the quarter, well below the $210 million to $240 million the company had forecast in September, though still ahead of last year's sales of $106 million.