Sunday, June 22, 2014

Events (Tradecraft)

Lets take a really basic look at in-store events.

Do you need events? 
The short answer is no. You can run a straight retail store. That store, however, will need to be a highly disciplined, highly diversified affair that caters to the broadest selection of customers possible. This is significantly different than an event driven store, since events tend to super charge certain games while appearing to marginalize others.

When I opened my first store, there was no event space. Ten years ago, having no event space was a reasonable thing, so the advice I got was you don't need it. Everything sold equally well. No category was more than 10% of my sales. RPGs and CCGs were equal. There are advantages to a no event space store.

For example, you can close up and go home early. You're a retailer, not an event coordinator, so when it gets dark, go home and be with your family, or go play games as the gods intended, at your kitchen table. If you have trust issues, if you can't have employees there without you getting an ulcer, if volunteer event labor makes you nervous, this is a model that can work.

Consider a slightly higher profile store location to take advantage of casual walk in customers. Be in a resort community, a college town on a main street, near a military base, or by a convention center.

If you don't have events, you absolutely must, without a doubt, master retail. You must use open to buy, turn rate analysis, sales per square foot analysis, and you must carefully monitor product demand online, as your best source of information, customers, will be a weaker amplifier than in an organized play store.

Events are also messy, figuratively and literally. Besides the literal mess, the stains on carpet, the bathrooms in need of plunging and constant cleaning, events bring human emotion into the mix. You must deal with sportsmanship, customer on customer crime, and the heightened sense of entitlement we're all used to seeing nowadays. If this sounds intolerable, events are not for you.

The good news is if you can do this, if you can master retail without events, if you ever do have events, you will be head and shoulders above your peers (provided you apply that same discipline to events). I've seen it many times and talked to other retailers in this boat.

In zen archery there's this thing called karabiki, shooting the bow without an arrow and learning technique and care for equipment until your teacher says you're ready. Zen retailing is selling merchandise, focusing on fundamentals of retail management, working to keep your store clean, well lit and safe, without events. I talked about vacuuming one million square feet before moving on to my event based store. This pays off later. Those who do this are better retailers because of their training. When all you have is inventory and space to manage, you master inventory and space.

Why you should have events
Event space is expensive. My store has 1,000 square feet of space which costs me $2,500 a month. Do my increased event based sales justify $2,500 a month?  This is a third of my rent, and rent is a third of my expenses, requiring a roughly 23% sales increase when we take into account cost of goods. Does event space increase my sales more than 23%?

When we moved from our nearly no event space store to our custom built event space retail store, something interesting happened. I figured we would need to increase sales 60% to cover the additional costs of the location. I did what any straight retailer would do, I figured out the income I would need and worked backwards through turn rate analysis to the amount of new inventory necessary to hit that number. And then I failed miserably.

The new inventory I purchased was an attempt at diversification, a dangerous activity when you're not entirely sure of the demand. My 60% increase in inventory bombed. Dead. The first year it turned at a staggeringly low, one time. Year two was one point five. It took me three years to cycle it all out. A lot of it got shipped back on a giant pallet. But I was still in business. Why? Because my event space drove sales well over 60%. Profitability came when that dead inventory was turned into useful stuff, which took time, but it was the events that kept the store in business.

Third place theory
Third place theory studies the social environment between home and work (or school). Third place psychologically allows individuals to find meaning and decompress in this in-between zone. Making your business one of these third places is deciding to assist these individuals, build a community and put up with a lot of "third space" variables that don't exist in a straight retail environment. It's an ideal place for small business, as big business is weak on these soft skills and can't possibly deal with them.

Check out these variables from the Wikipedia article on third space. You'll see they typify the good game store with event space: 

  • Free or inexpensive
  • Food and drink, while not essential, are important
  • Highly accessible: proximate for many (walking distance)
  • Involve regulars – those who habitually congregate there
  • Welcoming and comfortable
  • Both new friends and old should be found there

These are the fundamentals you want to foster in your store for that 60% increase in sales Remember, I only needed 23%, so there's profit in there somewhere, profit you can realize if you manage your inventory properly and have well managed events utilizing third space principles.

Again, if you're a misanthrope, if you've got a social anxiety disorder, or if you can't delegate because of trust issues, event space is not for you. You may go home early and turn off your phone. You win at retail, at the lowest tier.

For everyone else though, not only does it drive sales, but it builds that third space community. This community builds itself for the most part, provided you're doing all your retailing correctly and you follow the guidelines in third place theory (either intentionally or not).

Just a side note, third place theory traits are the same traits game retailers discuss incessantly at the expense of retail fundamentals. Why can't we monetize our space like a bowling alley? Snacks and drinks are so labor intensive (or our only profit center), can't we skip (or rely on) them? Why can't I put my Magic warehouse store out in the boondocks by the car dealers? Customers complain about "regulars" talking to staff at the counter, what should I do? What do I do about cliquish behavior that creeps into various events? How do I get the freeloaders to leave/buy or more new people to come? Then there are the fine tuning elements of third space event management, like reporting events, pricing, and many other variables.

Events and third space theory can absolutely dominate game trade conversation, trade show seminars, and the general consciousness of retailers. Personally? I find the skills to be soft, the problems to be confusing, and my ability to quantify and maximize them to be maddeningly difficult. Big box retailers agree with me, which means it's a small business opportunity.

I delegate my events. It's the area of my store I have the worst grasp on, the area I have to rely on good staff to manage. When everything is in order, but sales are down, I start asking a lot of event based questions. What have you heard? Why aren't they showing up? Are we priced competitively? It's also why when our community responds to our needs with overwhelming support, I'm both stunned and enormously grateful.


  1. Great article Gary! I've done some research on third space/place for my Master's in Geography. I think you did a nice job of summing it up. If you haven't read Ray Oldenburg's book, I highly recommend it. I would love to hear other points of view on this if anyone wants to discuss.

  2. How do you handle the situation when the people use your game space start thinking of your store at the clubhouse? Basically they come to your store they make a mess and they don't buy anything. What do you do then?

  3. We have a "pay to play" format for evening events, with free play during the day. Pay to play is a $5 fee which gets them $5 in store credit. So it's a guarantee they spend "something," because many won't.

  4. Off-topic: Gary, thanks for your blog. A year ago I discovered it, and it changed the way I looked at some things. After reading your "Circle of Life" post, I started asking myself what success in the GW section of my store looked like, and realized that it wasn't going to happen. I cancelled all GW products and gave the Warhammer tables away. That was one year ago next week, and it ended up being the best decision in the history of my business.

    I miss the players, and really did care about them, though they never believed me for a second. They're opening a revenge store next month. I'm pained because I see the financial realities of the situation, and I know the pain that is coming their way. Maybe I'm wrong. I'd love to be wrong. In our case, the numbers don't lie: We're much better off financially now.

    But my responsibility "to maximize shareholder value" (to provide the best life for my family and employees) has to take priority over emotion, and you helped me see that. Thank you.

  5. Gary, excellent article as always. My perspective (being in a very small town) is that you NEED to run events to survive. I've done it both ways. I started out as a sports card only retail store back in 1992. Bought my current store about a decade after that, and turned about 50/50 sports cards to MTG. Fast forward to now and we're about 90% gaming and 10% sports. We began to really gear up the MTG organized play back in 2010 when I re-established my store direct with WOTC. We had let it lapse simply because, at that time, my players didn't care whether the tournaments were sanctioned or not. As the internet became more and more of a dominant presence, I noticed our store traffic went down considerably. Ebay and Amazon make it so that your customers can shop very easily in their underwear at home.

    My answer to this wasn't to drop my prices down to meet all the internet pressure. I just started scheduling more events to bring people in. Give them a reason to WANT to come and spend time at the shop. I've found our customers will purchase product here if we're reasonably close in price. I now only have Tuesdays and Thursdays to myself. There are events going on the other 5 days/week. Some events we charge for, some events we don't. If you're in a big metro type area, I guess the retail store minus the events works. In a small area like ours, there's just not the amount of people needed to sit back and hope they come in. Running events takes a lot of the "hope" out of the equation. You pretty much know they're going to come in. Then it's up to me to take advantage of that opportunity to meet their needs. You're not just selling to them, you're building a community.

  6. Often it's games we like as well. Dropping a Dungeons & Dragons or 40K is tough when you've invested personal time and interest into it.