Recently a favorite local toy store of my family’s announced they are closing. We are saddened by the loss because this was one of the few toy stores left where kids could actually play with toys. We have a toddler who says words but not full sentences. Watching her interact with things is a big way we learn about her and what she likes. Anyway, we are sad to see it go, but as with anything like this, my wife and I started to talk about the business side. I asked my wife if they said anything in their announcement as to why. This store had been opened for over 5 years. They are about to go into the busy season for a toy store (this was right after Thanksgiving). This doesn’t make sense to me. She tells me their announcement said they couldn’t compete with all the online businesses and their pricing. My response, “that’s stupid. Why are they trying to compete with Amazon? They deserve to close then.”
I don’t mean this harshly but you can’t honestly think a small toy store of maybe 1,500 square feet is going to compete with that mammoth. What they need to do is not compete. How you ask? Take advantage of what you have. The most obvious one is the brick and mortar. This is the main area that Amazon can’t compete with. Although they are trying to now with their lifeless stores. They can’t give people an actual place to go and interact and touch and see how something works, or in this particular case, see how my kid plays with things. It was the main reason we liked this particular toy store. The things I think they missed were getting me to come into the store more often. Have story times, meet authors, or have family crafts on the weekend and during the week. Get people into the store with no intention of buying anything. Because guess what? Bring a kid to a toy store and you are probably going to buy something.
Sure you will have those parents who don’t buy anything and that can be frustrating but you have to take the good with the bad. I know when I go to these “free” events I look to buy something to support the organization having them and I am not the only one who thinks that way. When I was the store manager of a skate shop we had a mini ramp that we charged to ride. However on several occasions I let some kid “borrow” a pair of skate shoes out of the box and my skateboard so he could try out the mini ramp for a few minutes. I would show him how to pump back and forth and make sure he wasn’t doing any damage to the shoes. The mom would always buy the shoes and I had the highest show sales out of anybody. We had an advantage and I used it. If the owner knew I did that, I think he would have gotten mad, but this is the part I think they are missing. He would be nervous they damage the shoes and then not buy them. I would just make that clear to the mom and they understood, and usually made a face that told me they were going to buy them anyway. Take advantage of what an actual store can provide and people will respond to it.
I think retail is still going to struggle until they figure out competing with online in areas that online can’t compete. The other thing is figuring out these prices. Online still has cost associated with warehouses and shipping so the margins can’t be nearly as separated as we are currently seeing. I would be interested in seeing the ways you could reduce the cost of a business and lower the margins slightly to see about getting closer to those online retailers. Maybe I will do a case study on this… but that is for another day : )