Tuesday, November 20, 2007

Black Friday

People often ask me if I'm ready for Black Friday, if we'll be open early, if we'll have special sales, if we're stocked up. The reality is that it's not a day for specialty store shopping. Black Friday is the day after Thanksgiving, so named because it marks the period when large retailers go into the black for the year (make money), after 11 months of losing money and being in the red. That sounds like a dumb way to do business, but it's common. This is usually how mall stores function, most of whom pay enormous rents that crush them throughout the year and make the majority of their sales in December. Mall stores also have ridiculous leases which give the mall ownership a cut of the profits after they hit a certain sales threshold (during the holidays). Madness I say.

Rather than compete with thousands of stores fighting for their very survival, with their loss leaders and millions of advertising dollars, specialty stores that aren't in malls treat Black Friday like any other Friday. Black Friday for us tends to be a slightly lower than average Friday, although this year we're curious to see if we get any Fry's overflow. Sales in November are actually pretty good, up modestly from the rest of the year, but the early holiday shoppers are offset by regular customers, forbidden by their families to buy more stuff until after Christmas.

Most specialty stores will tell you that the holiday season is not their big season. Summer is game season, when kids are out of school and adults are looking for a hobby. It's not that the holidays are insignificant and there's no reason to prepare, December is our best month by far, roughly 30% higher than our average month. However, this doesn't compare to the Black Friday retailers who see December as 30-50% or more of their annual sales. That's a huge difference.

There are several characteristics of the holiday season specific to specialty game stores. First, the time period. Our holiday season starts promptly in December. December 1st is Saturday this year, and I imagine we'll see some good sales that day, but not great. By December 8th, we'll have spent a week and a half with moderately strong sales. By the 15th, the Saturday before Christmas weekend, we'll be wishing for it to stop (not really). Sales will now be double our average. This will continue through to Christmas Eve, with every day's sales like what we say on an average Saturday, our best day. Christmas is not the end though.

Grandma Money is the term we use to describe customers who come in after Christmas to buy what they really want. They either get money as a gift, or nowadays the growing trend of gift cards. We offer gift certificates, by the way, but credit card based gift cards are a large part of our post-holiday sales. Our regular customers, now unchained by their loved ones, are free to shop for what they didn't get for Christmas.

As a kid, I often asked for a variety of games that I never got. Gaming was not encouraged by my mother, so I mostly got things I didn't ask for. I would spend December 26th returning stuff and using the money to buy what was on my list. The same thing happens at the store. Our holiday season extends out to around mid-January, as our customer base returns, but this time with cash in hand. After mid-January, gift cards and grandma money spent, it all comes crashing to a halt, depression sets in, and we once again have to sell things to people rather than just stock them. That's when I try to go on vacation.

The big sellers during the holiday season are board games. We have over 500 of them, but there are usually a couple dozen that sell in large quantities of ten or more. This is the department that gets most of the money for stocking up. Miniature game starters, and bread and butter stuff, like D&D core books are important, but they generally don't sell so fast that we need to stock them deeper. Just-in-Time inventory still works in December, although there are always popular games that the distributors will run out of. Which ones is anybodies guess and we're all pouring over our sales data from last year to make sure we're at least stocked reasonably well on best sellers. A 30% blip in sales is very important, but you don't want to go nuts on inventory. We generally increase our inventory by 5-7%. Again, this is enough to cover those increased sales of things we'll be selling many, many copies of.

During this period we'll be re-ordering stock daily. Most of the extra help I need during the holidays is to take over for me while I receive the daily re-stock. Toys are new for us this year, and some will not be available for re-stock until next year. The Thomas stuff, especially, is a blow out category. I won't be shipping from Canada until it's fairly well depleted. Melissa & Doug stuff is all made in China, and re-stocking is already difficult. During the holidays I'm guessing it will stop completely. If you're shopping for toys this holiday season, shop early.

For you aspiring store owners, if you have any love for the holidays or enjoy seeing your family during this time, don't go into retail. This is a period when store owners work every day, including late on Christmas Eve. It's also hard to get into the spirit when you're dealing with a metric buttload of customers who don't want to be in your store, know nothing about your hobby and don't want to know, and generally can't be guided to a reasonable purchase. I won't say I actively dislike these people, aka the general public, but I wouldn't do this if they came into my store every day. What you end up hoping for is a customer who walks in gazing down at a shopping list, one that you can take from them fill completely, and send them on their way. They hope for that too.


  1. Can I just warn you Gary that your GW sales will be huge. They always were for us during the holidays. Kids have specific lists of what they want, usually the big box stuff.

    It was not uncommon for us to have multiple $300+ GW sales *per day* in the last week leading up to X-mas.

    Among the biggest sellers? GW Paint kits. Huge, we would go through at least 40-50 of them per season.

    Your store is of course different, but with your upswing in GW sales, I wanted to mention it to you, and be aware of it, since if you sell out of something on Friday, you won't see it until the next week for GW.

    best -


  2. On another topic in your post:
    Something I always wanted to do, but never did:

    The Earliest Black Friday Sale Ever: Have a sale from 12:01 am to 5am Friday morning, and heavily market to the lunatics waiting in line at Frys. Like bringing out small card tables and quick card games (Lunch Money or Fluxxx come to mind) and demoing them to the folks waiting in line to buy nonsense at Frys.

    We shared a parking lot with Best Buy, and by 7am, our 4 acre parking lot was full. Best Buy opened at 5 am on Friday after T-Giving, and there would be a line out the door behind.

    Seems like if you also offered coffee and donuts or something for all those folks waiting in line, you would get a bunch of browsers.

    Just a wacky idea I had. Maybe next year?

  3. Core GW items - particularly 40k and hobby items - go fast during the Christmas rush.

    Troop Squads, APCs, paint sets, terrain & painting guides, brush sets, all make great "safe" gifts.

    This is when the moms of the kids who come in and play will show up, say "He plays those guys" and want the perfect suggestion.

  4. Minis ARE Toys, after all.

  5. Ok, I'm convinced. GW upstock on the way.