People | The Big Questions

Unwrapping Toys R Us' business strategy in Japan

by Jane Kitagawa

Contributing Writer

Name: Dieter Haberl
Title: President and Representative Director, Toys R Us Japan
URL: www.toysrus.co.jp
DoB: May 6, 1962
Hometown:
Lustenau, Austria
Years in Japan:
21


As someone working to affect change within corporate culture, President and Representative Director Dieter Haberl of Toys R Us Japan, is perhaps facing one of his biggest challenges yet.

The Japanese company is a subsidiary of Toys R Us Asia that is now a wholly independent entity, unaffected by the financial strife suffered by the beleaguered Toys R Us in the U.S. However, for Haberl, this challenge isn’t negative. Rather, it’s thrilling.

“We’re transitioning very rapidly from a retailer that was purely ‘big box, everything on the shelves, go find it!’ to one that’s very, very customer-oriented,” he said at the company’s headquarters in Kawasaki. “The Chapter 11 process has been long and protracted. … But we’ve always looked forward to this solution,” Haberl said of the American arm’s disbandment. “That independence is important for several reasons. Customers out here think very differently (than Western customers), and that means different needs to drive a business forward.”

So far, the company has opened nine smaller format stores that Haberl reasons will create closer physical contact with customers. He also shared various changes, including lower shelves so adults can see their surroundings, shifting store locations in response to changing demographics and introducing new concepts such as more hands-on play areas.

“The Japanese consumer is probably the most demanding, but also the most informed and sophisticated customer,” Haberl said. “It’s very important to make those distinctions. Japanese consumers aren’t demanding just for the sake of being demanding. They’re demanding because they have excellent knowledge about what a quality product is and what isn’t. The only way to survive and thrive as a business (here) is you constantly have to play to that higher standard. That is a great thing because it makes you leaner; it makes you better as a business. Recognizing that, and understanding how you cater to that,” he said, smiling.

Haberl’s understanding of Japan harks back to when he first began studying the country and Japanese language via the nonprofit Japan-America Institute of Management Science. Recommended by his then-college adviser to apply, Haberl said, “It took a few more years to get back to Japan, but that (one-year program) is when it all started.”

Arriving in Japan with his wife over 20 years ago to work with Coca-Cola, Haberl initially worked in bottling and traveled around the country. Later stints at The Gap, Adidas, Reebok and Lacoste followed. Involvement with the Tokyo American Club leadership, which he described as a “vital oasis with an international mindset, where you can make friends and build business connections” has also played a role in his life.

Ruminating on his time across these companies and being able to function at the C-suite level successfully, Haberl said understanding, appreciating and respecting Japanese culture forms a “big part of the job” when bringing about corporate change. Language skills and an ability to listen help in reaching a deeper level of understanding.

“Here, in particular, I think you need not only the patience to listen, but you need the ability to separate facts from opinions,” Haberl said. “You will hear many opinions, but it’s typically not very easy to read the facts, so that aspect of your listening skills is very important, especially for newcomers to Japan,” he said. “‘This is how it’s done in Japan.’ That phrase may or may not be true in any given corporate environment.”

Stressing a need to know the customer at the “granular level,” Haberl cites the company’s unusual situation; its customer base spans all stages of childhood — from conception to the teen years. How you approach each of these different sets of customers, with older children wanting to make their own toy-buying decisions, is something Haberl and the company take seriously. One initiative involves “baby advisers” at Babies R Us, the younger sibling of Toys R Us, which sells not only toys, but also general infant goods.

“Increasingly it’s not just the mother anymore (involved in purchasing), it’s the father as well. We see a big millennial shift there. They have millions of questions, and we try to answer those questions. So we’ve introduced baby advisers through a very rigorous internal program,” Haberl said.

“We license our own staff after they’ve gone through a training course and passed the tests; there’s a failure rate of about 50 percent. It’s rigorous, and that’s a very consistent failure. This is very, very important. You need to make absolutely sure that an adviser is capable of giving the right advice to a mom that comes in the very first time after she’s given birth or even beforehand. What is the best product, whether that’s food or strollers — millions of questions. These baby advisers are a critical change in how we are servicing our customers,” said Haberl.

Transformations in retail technology, such as analytic tools providing online scoring systems for the in-store retail experience, omnichannel marketing and even a tie-up with Google Assistant where children can talk directly with Santa Claus to request gifts all form part of the many changes the firm is undergoing, providing “opportunities to serve the customer differently.”

“Looking at our business right now, I don’t think you’ll recognize it in five years. It’s going to have evolved so dramatically,” he said. “That’s the exciting part. Looking at where can you go in this evolving relationship, with the customer mapping of that path.”


Extensive experience across series of roles

Joining Toys R Us Japan as president and representative director last September, Dieter Haberl brings with him over 20 years of business experience. He studied finance and economics in the U.S. and later earned a master’s degree in international management from Arizona State University’s Thunderbird School of Global Management. Employment at Coca-Cola Europe in Germany followed, before a transfer to Coca-Cola Japan in 1997, where Haberl worked for seven years. He then entered a series of C-suite roles, first at Gap Japan as its chief financial officer. At Adidas Japan, Haberl worked in finance and administration and was later tapped as president of Reebok Japan. Before joining Toys R Us, he was the CEO and president of Lacoste. In his spare time, Haberl can be found reading works by Isaac Asimov, Winston Churchill or Yukio Mishima, or indulging in ice hockey.

The Big Questions is a Monday interview series showcasing prominent figures who have a strong connection to Japan.