Why Toys ‘R Us and Blockbuster Died

If you’re a Gary Vee fan, you’ve probably seen his video about Why Toys ‘R Us Went Bankrupt. Gary believes Toys ‘R Us’ demise happened for 3 reasons:

  1. They didn’t believe in the internet
  2. They didn’t innovate
  3. They rested on their laurels

Similarly, Gary’s view on Blockbuster in his video entitled How Netflix Killed Blockbuster points to a similar fate:

Blockbuster claimed in their reporting that customers enjoyed:

  1. Physically going into their stores
  2. The ability to read the back of the DVD cases
  3. Running into their neighbor
  4. Picking up popcorn on the way out

As Gary humorously states on behalf of most of us, “I don’t know about you guys but here is the experience I like: laying naked in my bed and pressing one f-ing button.”

This all comes down to the experience. What is your business doing to add to or detract from an ideal customer experience?

But Do Restaurants Need Innovation?

If you’re asking whether you’re supposed to start serving your caesar dressing in the form of a helium balloon to be popped over your diners’ salads, the answer is no.

But that doesn’t mean you can stop innovating. Let’s go back to Toys ‘R Us. What were their downfalls?

  1. They didn’t believe in the internet
  2. They didn’t innovate
  3. They rested on their laurels

Whether you’ve got a nationwide billion-dollar toy store or a local neighborhood bistro, we can all learn from businesses who fail.

Ask yourself these questions:

  • What technology innovations am I resisting right now? What am I willing to take a chance on?
    • External delivery systems
    • Self-ordering kiosks
    • Self-paying systems
    • Table butler systems
    • Online pre-ordering
    • Online table reservations
  • What cultural shifts am I resisting right now? What am I willing to try?
    • Food allergy awareness and proactivity (gluten/dairy/meat, etc. -free menus)
    • Menu changes to reflect food trends
    • Decor and ambiance updates
    • Mobile food truck for your restaurant or cafe
    • A beautiful, functional website and social media presence
  • What are some ways I can stop resting on my laurels and start being more proactive?
    • All digital and social profiles up to date with photos and complete information
    • Interactions with fans and critics on social and review platforms

Diners Know When You’re Slacking

Whether diners can articulate it or not, they know when a restaurant or cafe is innovating or going backward.

Earlier this year I visited a coffee shop in the Chattanooga, Tennessee Arts District called Rembrandt’s after hearing so many excellent reviews. But after that visit, I said to myself I’d never go back. (I’ll tell you why in a minute)

Last week I went back own to Chattanooga for a vacation. I was traveling with a friend in her 50s and she wanted to also spend a couple of hours working and drinking tea. I knew she’d love Rembrandt’s so I decided to give it another shot. I walked inside, looked around, and walked back out. My feeling was, “This place is not for me.” Now, because I assess restaurant micro-experiences for a living, I’m able to articulate what I felt but remember, most customers can’t.

Here’s what I experienced in a matter of about 60 seconds to bring me to that conclusion:

  1. The carpet smelled like an old restaurant
  2. It was about 5 degrees too warm
  3. It was extremely loud
  4. The only place left to sit was the worst seat in the house facing the wall next to a loud group
  5. The menu had too much food and other options on it (meaning, they don’t specialize in coffee)
  6. Their counter was so cluttered and busy
  7. The decor was extremely outdated
  8. Their branding and general look and feel was outdated
  9. I felt immediately agitated and overwhelmed

This should almost be its own micro-experience article but my intention is to show you how customers know when a business isn’t moving forward. Innovation doesn’t have to necessarily be adopting some new technology. Sometimes, innovation for a restaurant or cafe can mean subtle, seemingly insignificant changes. 

That type of business attracted the 50+ crowd really well, but it’s losing and will continue to lose its millennial customers unless it adapts and innovates.

For the record, I left my friend there to work and I walked 7 minutes away to Provisions Coffee Shop located inside the Edwin Hotel. I knew it was the coffee shop for me by a few photographs and the branding that is so obviously following the coffee shop trends of:

  1. Clean, modern, simple
  2. Subtle colors, clean lines
  3. A feeling of “open-air”
  4. Little to no focus on their food menu, setting themselves up as a coffee authority
  5. Standing counter to work with modern decor
  6. Lower temperature, quiet atmosphere

The Moral of the Story

Innovation won. Innovation wins. Innovation will always win. 

Whether you bring in a digital ordering kiosk or unclutter your counter, any innovation or change is good. Get in a habit of accepting cultural shifts with open arms! Because as Gary V says, “When you don’t innovate, you die.”

Need a fresh set of eyes to help bring innovation to your restaurant or cafe? This is what we do. Give us a call!

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