Toys ‘R Us came out on top, followed by Target and then Walmart. We buy gifts for everyone at the holidays, but who do most of us focus on? Kids if we have them. Toys are a ubiquitous holiday purchase. So why in the world did our secret shoppers find the toy category rating so low on service and sales? What’s wrong with this picture and better yet, what’s the opportunity we see in this?

The opportunity is for any of these retailers to make a small effort toward improving in both these categories and standing head and shoulders above the competition, bringing them more business and ideally increased profits by improving the customer experience and helping people to buy more toys. Pointing out specials, helping people find promotions, being educated and in turn educating the retail customer is absolutely win-win.

As the electronics business gets more competitive with discount stores like Target and Walmart fighting specialized stores like Best Buy for a larger customer base, stores realize they need to do a lot more than just stock shelves with the products customers want–and need. In an effort to become more of a destination electronic store, Target announced new services for electronics shoppers.

Among the new offerings, Target is adding a free telephone technical support service for purchases, an electronics recycling program that offers store gift cards and more wireless phone choices.

“Electronics are getting more complicated and more of us are connected to the Internet and wireless,” Senior Vice President Mark Schindele said. “Guests want a seamless experience.”

Like Best Buy’s Geek Squad and Apple’s Genius Bar, Target’s new services hope to bring more traffic to the store. Time will tell whether consumers will buy what Target is selling.

Marshal Cohen, chief industry analyst with the NPD Group, told msnbc.com, “The consumer is not in any rush.”

An earnings call from Walmart indicated more shoppers are making their school supply purchases closer to their schools’ start dates. The National Retail Federation also predicted a quarter of school shoppers won’t begin their back-to-school shopping until one or two weeks before school begins. In some cases, families may even put the shopping off until later in the fall after seeing what’s in style and what students really need.

Still, the National Retail Federation predicts American families will eventually spend more on back-to-school supplies and clothes than last year. Back-to-college spending should remain about the same.

Meanwhile, retailers are offering deals for the customers now. Abercrombie & Fitch’s jeans are currently 40 percent off, Target is offering free shipping on $50 online purchases and Amazon.com has bargains on coffee makers, printers, microwaves and textbooks for college students.

Not unlike others, Target will expand its store hours and feature price promotions. For example, the stores will open at 5 a.m. and the first 500 guests will receive a gift. Those who spend $100 or more (not hard to do at Target) between 5:00 and Noon will get a $10 gift card.

As far as price, the retailer will offer its Low Price Promise. In other words, if a guest finds a lower price at a competitor, Target will match the price during the competitor’s valid ad date.

Perhaps more eye opening is the improvement being made to the return policy. As a standard, Target has a 90 day policy for returns or exchanges accompanied by a receipt. However, a recent expansion allows you to return or exchange up to $70 in merchandise without a receipt on a rolling 12-month cycle and new and unused items over the $70 can be exchanged for items in the same department.

The on-line function is also getting into the act with free shipping on most items when you spend $50 or more.

Other retailers are also offering similar programs. This is just one example of how a company is using their customer satisfaction data to directly enhance the customer experience for the holidays and beyond.

Target is planning to move merchandising and store layouts to increase room for household commodities such as beauty products and perishables. It’s the retailer’s direct response to understanding the change in the long term consumer shopping behavior. The increased emphasis on consumables will mean less space for furniture and clothing, both of which are a part of Target’s brand.

CNNMoney report recommends Target is careful when moving more in the direction of Wal-Mart. Target has successfully branded itself as the higher end retailer superstore carrying brands such as Mossimo. Target’s emphasis on food and household products won’t likely hinder the brand’s appeal. Target will also start a second apparel promotion with snowboard Shawn White, which shows they won’t be veering too far off their branding.

It’s not a surprise retailers across the board are making changes big and small to product lines. Responding to consumer shopping behaviors is the key to keeping competitive over the next year.