Sunday, July 15, 2007

Designing BDG 2.0

The biggest problem facing the current store is game space. There's not much of it and it tends to impede sales when it's in use. I was counseled before the store opened that game space was optional. That was flat wrong. It's essential for the most part, unless you're in a mall or other high traffic area. Events drive sales but most importantly they're a reason for people to come to your store. The game industry is vastly bigger than it used to be (believe it or not), it's just that there are many competitors out there who eat into that big pie. Game space is something the Internet can't offer, something that Wal-Mart can't figure out, something that the comic book store can't do properly. Game space is absolutely essential to a game store.

So how much game space? Clearly, two tables in the middle of my store was too little. I started looking at other stores. The Game Industry Network had a poll among the various stores and game space sizes varied dramatically. Eventually we started dialing it in. What's the biggest event you could have? How many people would you need to seat for a special event, like a mini convention? We looked at other stores too. Great Escape Games in Sacramento was one. We talked with stores at trade shows, like Z-Games in Vancounver, Washington. Comparisons with Endgame are inevitable as well, as they've made game store design an art form. In general, 500 feet was too small to do the big events. 800 feet was a minimum but it ruled out the largest of events. 1000 seemed to be the magic number. So great a 1,000 square foot game space. Oh god, how are going to pay that rent? Next came the retail space, the economic engine of the store.

So you've got this 1,000 square foot game space which will be costing us a couple thousand dollars a month. How do we pay for it? It means the retail space and inventory needs to go up. It's actually a formula on a spreadsheet that basically says: you've got expenses, so based on the average number of times you sell through your inventory annually (turns), how much of that inventory do you need to have to break even? Easy, right? Well that "turns" number assumes some things. For example, it assumes that by increasing inventory by 60% (our magic number), that we'll sell it at the same rate as the stuff we already have. This is wrong, as it assumes there's this unmet demand for more games out there that we're not already selling.

The truth is that Black Diamond Games 1.0 has about 80% of the games worth selling. Adding more games, like bigger game stores do, will increase sales at an ever decreasing rate. For example, we stock the top 200 or so board games. Adding another 100 board games so that we stock the top 300 board games won't appreciably increase sales, while it does eat up our inventory dollars. The solution, for us, was diversification.

This is another example of where we looked to other stores as examples. Z-Games, Games of Berkeley, our own local competitor Games Unlimited, all diversified into toys and related items. Z-Games was probably the best example, as they retained their game store roots and gamer support while catering to their toy customers at the same time. The other stores tended to lose their focus, probably because the money in toys makes games seem inconsequential. My guess is that it begins to effect your brain after a while. Why learn the twenty-seventh expansion for Settlers of Catan when I can sit back and sell ten times as many Thomas the Tank Engines?

So toys and gifts it is, for about a quarter of the store. We already had a clean, well-lighted family friendly environment, so it seemed natural. The key will be a) if we can get people to come and b) whether we can manage toys as well as we've managed games. Oh yeah, and very importantly, c) not lose our soul. The worst scenario is the Games Unlimited model, where we slowly let toys take over our game store so that we're a toy store with games instead of a game store with toys.

Comics is another area we're dabbling with. We'll have a good selection of trade paperbacks (we just got 100 or so in BDG 1.0). We'll eventually bring in regular comic books and try to build that clientele, preferably with subscribers. Comics is a perilous, backwards, monopoly driven business, but we're going to give it a shot.

So where to put this store?

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