Service, business acumen guide USA Baby

Mike and Karen Schaul opened their first USA Baby/Child Space store in Dallas in 2001 after deciding they wanted to open their own business. Schaul was looking for a franchise that had a market he could develop and grow to include more than one location, and USA Baby in Dallas fit the bill. Since then, the Schauls have opened a store in Arlington in 2002 and another in Frisco in 2004.

Each store is about 12,000 square feet and together they have average annual sales of $7 million and $8 million. Schaul said business is up about 24% so far this year compared with 2005.

The Schauls carry furniture from Baby's Dream, Munire, Bonavita and Stanley; gear from Graco, Britax, Peg Perego, Chicco and Combi; and textiles from Cotton Tale, Kids Line, Nina Selby Designs and CoCaLo.

Furniture, gear and bedding are the three top selling categories and price points on cribs range from $299–$899 and twins retail for $399–$599. They shop for at JPMA and ABC.

"People shop our stores primarily because we have a great selection and great pricing," Schaul said. "But we also have outstanding customer service. Our employees listen to what the customers want, either in the store or through e-mails. We pride ourselves on educating the customers; when we educate them about the product, they're going to come back to us."

His stores offer delivery and set-up services and the Frisco location features a Party Room that customers can reserve for birthdays. Schaul said it has been a great idea for the store because parents can rent the room for an hour and a half and choose from either the Castle Room, with an indoor clubhouse play center or the Sports Room, which has a basketball goal for shooting hoops. The Party Room drives traffic to the store by capturing a consumer who might not realize the retailer isn't limited to baby products.

"The Party Room is great, particularly in Frisco where there's a more affluent consumer," Schaul said. "The parents don't have to worry about having a lot of kids in their homes and cleaning up after them."

Schaul hosts events, like the Graco Mobile Express program, which is like a traveling mini Graco showroom where consumers learn about the products and get safety tips from Graco experts. He also has one-day sales four times a year including one targeting the growing Hispanic market.

Though Schaul advertises in local publications like Dallas Child and the Kids Directory and has used TV, he said it's not as effective and has lost its importance for ads. Instead, he's found the Internet to be a great resource.

"The Internet has picked up where television has dropped off," Schaul said. "Our Web site has been up since last September and it does drive traffic to our stores. Our industry really needs to embrace the Internet and realize there are more ways we can do things through the Web."

Schaul said the biggest changes he's noticed in the industry center on the Internet. He's been collecting customer e-mail addresses since he opened his first store and uses them to communicate. Consumers also are relying more and more on the Internet not only for purchases but also for research, especially in the juvenile market where there's such an abundance of product.

His best business idea has been something fairly simple, but often overlooked, and that is to run your business like a business and that means realizing the importance of the back office.

Schaul's advice to fellow retailers, aside from knowing and understanding your customers and competitors, is to stock your product.

"Today, customer expectations are so much higher," he said. "They don't understand that if they want a crib in blue it will take eight to 10 weeks. Stock your most popular items. Also it's incredibly important to understand your cash flow; don't try to do too much when you don't have enough funds to pull it off."

Gear, one of the store's top selling categories, gets a lot of floor and wall space.

USA Baby/Child Space offers lots of selections for babies as well as kids in everything from furniture to toys and more.

The Schauls believe in stocking as much as possible so customers don't have to wait months for their furniture.