Friday, March 20, 2009

New Competitor

I've got a new competitor opening up soon. I have to admit that I'm a little concerned. My main issue is not that they'll steal away business, although my first response was to wish it wasn't true, just to avoid the headache. The theory about competition is that stores create their own customer base. They add value by making new customers. In other words, it's not a zero sum game, in which a finite sized pie is divided among stores. When a store dies, competitors take only a small number of their customers. Most float away and leave the hobby or start shopping online. When a new store opens, a similarly small number migrate away. It's actually very hard to woo away another stores customers unless they're doing them a disservice. Everyone has to make it on their own steam, and it's hard earned.

A bad store, however, can drag down other stores around them while they fail. For example, the economics of a discounter will eventually lead them to failure, including those horrid liquidation specials, but they might do great harm to other stores on their way down. They may "own" the market because of their pricing, but when they fail, the market evaporates and everyone is worse off. It's not like the dislocated customers suddenly have an epiphany to go to the other game store. Most are oblivious to other stores; they had their place.

You really only have three options to differentiate yourself: price, selection and service, so I'm hoping this new owner knows which one they're concentrating on. Although it may seem odd, I'm actually open to helping them, if only to make sure they don't make the kind of mistakes that will hurt the community overall. I've learned that an established store needs to stick a hand out and at least open up a line for communication. Otherwise there tends to be misunderstandings, rumors and animosity. So if you're reading this, give me a call and I'll do my best to be a good neighbor.

14 comments:

  1. While competition is generally a good thing for the market, there are three scenarios - win/win, win/lose, and lose/lose.

    I know that the local gaming community would far prefer a win/win situation, where the stores deal with different niches of the market.

    The fear is that a store with a poor business plan can survive just long enough to cause both stores to fail (drain off enough business that the other store can't operate profitably, even while it fails to generate any profits - as you describe).

    Since the new store seems to be focused on card games, this could allow players of some card games who aren't active at BDG to become active at the other store, which could be a positive thing for gaming in the area as a whole.

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  2. Where is this new store?

    For what it's worth I find additional stores to be a benifit, not a detriment. Without Endgame in Oakland providing the awesome services they do I might give up on gaming in the region altogether, but because they cater to what I want and need there I am free to open my horizons even more and also shop at BDG. Not sure if that makes any sense, but there it is. I find more options encourages me to buy and support from more stores, not fewer.

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  3. I don't know where it is. It's just a confirmed rumor.

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  4. I Heard about this store about 3 weeks ago and understand it will be on Monument Blvd and opening in about 2 weeks

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  5. Don't worry, a quality store will alway survive. Plus as we all know, just because you want to run a game store does not actually means you can run on.

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  6. Endgame and BDG are a good example of competition that helps both competitors thrive.
    First off, they aren't fighting tooth and nail for the exact same customers, due to being in different enough locations and having different specializations (granted, they do have a lot of overlap), so each one is growing the community, and they even share a certain number of customers.
    Second, EG and BDG have always done quite a bit of communication - or at least it seems that way.
    Third, Both Endgame and BDG are fairly classy - especially compared to a lot of the game stores you will see if you travel around the USA. Neither of these stores is a market killer.

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  7. We don't consider each other competitors, by the way. There is some minor customer overlap. We serve very different markets and thus have differences in our offerings. I do have "market" envy on occasion.

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  8. Well, while I'll almost certainly at least check the new place out, you've got my loyalty points and the whole convenience thing going (even more so now the DMV have mailed me a little card), so expect to keep seeing my custom.

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  9. I cannot think of anywhere on Monument Blvd that could be home to a game store. Most of the street is a (insert word for poor, non-citizens here so that I don't get flamed)enclave. I worked Concord for several years, in and out of apts on Monument and adjoining streets. I hope for the new business that it is not there.

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  10. Monument? Seriously?...

    If it is on Monument, it's probably going to be as close as you can be to Pleasant Hill and still be considered to be on Monument.

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  11. There are some hole in the wall businesses on Monument that seem to do pretty well at attracting "outside" customers, and some sections that aren't too bad (OSH and Costco are both on Monument).

    That said, I don't know how many moms are going to feel like they can drop their kids off at a store on Monument to play games for a few hours - especially after dark.

    It seems like the new business is trying to keep overhead low. I'm not sure if that will end up being a good decision for them.

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  12. Don't forget there's the new 'Crossroads' shopping center (where the Dome Theater is. They have been re-vamping that area for about 18 months, now. There's a lot of empty space in there. While it's on Monument, it's starting to be a nicer area. (This is because Pleasant Hill changed around their area, creating Crescent Plaza about 3 years ago, now).

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  13. I somehow doubt that a new game store will be located in that shopping center.
    I know that Gary looked at it when he was planning the move, but I think it was a bit too high priced.

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  14. I'm sure rents are much lower now than they were a couple years ago.

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