Sunday, February 7, 2016

Outrunning Success (Tradecraft)

We had our annual board of directors meeting today, which always brings up interesting issues. One thing we discussed was the strange nature of the game trade, about how we bring in customers, get them into the hobby, and then promptly lose them. Once they're established, many turn to the Internet to satisfy their needs. Successful stores gain and retain new customers faster than they lose them. We do this very well, albeit without a system or full understanding of exactly how.

There are not too many other businesses that lose customers in this manner. It's a pretty huge flaw in the business model. It only works at all because of how we utilize Third Place Theory, becoming a venue for more than just purchases. The plans for the store in 2016 are all about improving our sense of space with our big expansion. The whole endeavor is incredibly inefficient and unstable, however, which is the kind of risk you discuss with shareholders (AKA your friends).

When you talk about taking a step back from the business, or retiring, or selling it, or franchising it, you wonder if the people who will take your place have their finger on the pulse of this dance. Are they actively working on the two step forwards while attempting to reduce the one step back?  Do they have the next generation of customers in mind? Have they considered community outreach? Are they spending too much time with those with one foot out the door already? They do tend to be the most active and vocal customers.

The other issue we discussed was the price pressures felt within the hobby trade in 2015, pressures we've honestly never felt before. We dropped Warmachine last month, not because it doesn't sell well, because it's still a top ten game. We dropped it because the efficiency of the line is untenable. We can't get that efficiency (turns) up while the game is perpetually sold at 30% off online. When I dropped it, I was informed nobody else really carried it locally anyway, despite running events, all on the same day as us. I'm not sure when the Flames of Warization of Warmachine occurred, but apparently I wasn't paying attention.

The price pressure issue is well known with the changes implemented by the Asmodee Group. It's also why we can't take Vanguard or Weiss Schwarz seriously, with Potomac selling them near cost on release. Also, when a game begins to falter, games that were previously impervious to such pressure suddenly feel them. When we sell less than one of each Pathfinder release, that entire system is at risk of getting dropped, for example.

Anyway, we had our best year yet. We hit numbers previously unfathomed. We have systems in place for constant improvement. We're moving forward with our expansion plans. However, if we were hoping for steady, predictable growth, this is not that field.

2011 2012 2013
Magic Magic Magic
Yu-Gi-Oh Yu-Gi-Oh Yu-Gi-Oh
Warhammer 40K Pathfinder Warmachine
Pathfinder Warhammer 40K CAH
Warhammer FB Warmachine Pathfinder
Fantasy Flight Pokemon Fantasy Flight
D&D Fantasy Flight Warhammer 40K
Pokemon Rio Grande Vanguard
Rio Grande Mayfair Games Pokemon
Malifaux Warhammer FB Mayfair
2014 2015
Magic Magic
Warmachine Fantasy Flight
CAH Warhammer 40K
Warhammer 40K Pokemon
Pathfinder CAH
Fantasy Flight Warmachine
Pokemon Pathfinder
Yu-Gi-Oh Asmodee
Vanguard Mayfair

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