Toys R Us’ Lessons for Craft Beer

As big corporate retailer Amazon.com pushed Toys R Us out of business, the analysis of the fallout for small, local toy stores is interesting – and has lessons for craft brewers.

Our boys grew up in that age when going to Toys R Us was still destination shopping.  The shelves were crammed full and stacked to the ceiling with toys and games that tickled their imaginations.  We tried to stay clear of the gun aisle, but that was always a draw for the boys.  Other shopping options at the time were discount retailers (low prices, low experience), and the mall (high prices, fun for the boys, too much drama for us).  The Sears Holiday Catalog (remember Sears?) was the closest thing to an out-of-store experience back then.

There was something special about Toys R Us.  It was as close to a Disney experience as we might find within reasonable driving distance.  The stores were kid-friendly, and we didn’t mind if the boys ran off on their own (as long as they didn’t put a bazooka in the cart).  It was like Chucky Cheese’s without the crappy pizza.

But then Toys R Us got caught in the vice between an even cheaper, easier and more convenient (but impersonal) shopping experience in Amazon.com, and small, local retailers with a sense of community and deeper experience for the child and parent alike.

Middle ground, it often turns out, is the hardest to defend.

Amazon.com with its easy access by both kids and adults alike, coupled with lower costs, reliable returns and near instant gratification was simply not something Toys R Us could overcome.  When price, convenience and speed combined, the days of trudging out to the mall or store were numbered.  This was easy to see coming.

But what is surprising is the effect on local, independent toy stores.  These small, community-connected toy stores report no particular bump from Toys R Us’ demise.  Turns out, they were never really affected by them much in the first place.  Awhile back, I wrote a blog about an NPR story highlighting the resilience of local bookstores in the Washington, DC area.  These small, independent stores compete quite effectively with big box and online booksellers by focusing on community connections and a delightful customer experience.

Small, independent toy stores survived by being local and special.

They provide customer service that cannot be matched online, and Toys R Us was never able to achieve in its warehouse stores with low-engagement staff.  Well-curated product selection at smaller stores overcame the sea of options the corporate competitors offered.  They may not have every toy, but they have the very best toys (and the right staff to reassure patrons and their children of their choices).

For craft brewers, the savvy strategies to compete effectively with “big box beer” have many similarities to books and toys.  Big corporate beer will continue to make access to “crafty” beer as quick, convenient and cheap as possible.  Many will be attracted to these beers that are good enough for them.  We can wax poetically about educating the masses to be more discerning, and more appreciative of a true craft beer experience.  But with the glut of current craft beer choices, it’s not like a lot of people out there just don’t know enough about craft beer or lack easy access. They may, in fact, be quite knowledgeable.  But they see things differently from those more entrenched in the craft community.

Big, bad beer is at the door.

To borrow from a children’s fable, the big bad corporate brewers are knocking on craft beer’s door saying, “Little brewer, little brewer, let me in let me in!” The craft breweries built with bricks will be the ones that have focused locally on a territory they can defend, created strong community connections, and maintained an impeccable desire to delight drinkers with an experience that’s more than just great beer.

If you’re a small brewer wanting to grow to be the next Toys R Us equivalent regional or national brewer, good luck.  Big bad beer will be ever at your door. And the less discerning consumer masses outside your home base will not come to your rescue.  You will go the way of Toys R Us.

Already too big?  Cannot defend your turf?  Retreat.  Live to compete another day.  This is a tough pill to swallow.  But you may need to check your ego at the door on the way out of turf in which you can no longer create a sense of local connection.

Small now, but want to be bigger?  If you wish to grow organically and smartly, managing your local image, maintaining a customer-centered experience and tapping into the magic of scarcity within your portfolio, you’ll be fine.  You just won’t be huge in a hurry, or maybe ever.  But you’ll be fine.

Turns out, if you’re not big box beer, you may only be able to grow sustainably as far as you can maintain a sense of being local and special.

Cheers!

John

John (13)

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One thought on “Toys R Us’ Lessons for Craft Beer

  1. Excellent take as usual, brother! I hope all of our local brewers take your thoughts to heart.

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