Saturday, November 23, 2013

Small Business Saturday

Now we come into the holiday shopping season, the time of year when, depending on to whom you talk, retailers make 20 to 40 percent of their sales.  Black Friday, Cyber Monday (a self-fulfilled event, if you look at the statistics) and since 2010, Small Business Saturday, a creation of American Express.

Small Business Saturday  is promoted by AmEx  ostensibly to promote small businesses in the US, and, more practically, to encourage more small businesses to sign up to accept the American Express card.  I say ostensibly to promote small business because any small business can register to participate in Small Business Saturday and receive a welcome package, including door stickers, floormat and shopping bags.  However, in order to take advantage of the main thing driving customers into stores, a one-time $10 credit on their AmEx statement when they make a $10 or more purchase in a participating store, the store must accept the AmEx card.  Since many stores in the US, especially small retailers, do not accept American Express, due to higher merchant fees than Visa or Master Card, or even Discover, charge, I would willingly bet that AmEx looks at the list of retailers participating in Small Business Saturday, compares it to the list of those that accept AmEx and contacts non-accepting retailers to pitch the card.   Assuming that a store got a number of customers in attempting to use an AmEx card to get the discount, AmEx could point to that as a strong argument for taking the card.

While I really like the idea of Small Business Saturday , as I favor anything that has the potential to drive traffic into stores, I still have some caveats about the promotion, two to be precise:

1.        Placement.  Putting Small Business Saturday on the Thanksgiving weekend, directly after Black Friday, really dilutes its impact. Given that Black Friday is the busiest shopping day of the year and the Saturday after Black Friday is typically the third busiest shopping day of the year (the Saturday before Christmas is the 2nd busiest shopping day of the year, just in case you were wondering), it appears quite difficult to measure the impact that SBS has. Given that so many people are out shopping anyway, how does a store determine what impact, if any, SBS promotion has on sales.  Put the event on a Saturday in January, February or March, when you don’t already have the holiday shopping season driving traffic into stores and see what effect it has then.

2.       Coattails.  This is the fourth year for Small Business Saturday and American Express is still the only major company promoting it and, in fact, has the term trademarked.  If SBS is to become an “organic” event, rather than a paid one, we need to see more companies taking advantage of or sponsoring it, rather than just AmEx.  A quick search on Google shows only AmEx and Constant Contact  running promotions tying into the event, while Wordstream  has paid search tied to Small Business Saturday.  In our industry, Alliance Distribution has come out with a FLGS Success Plan for Small Business Saturday, downloadable from the Alliance website, and offering stores the opportunity to win a $100 credit by submitting events and promotions tied to SBS for a drawing to take place in early December.   Alliance, however, as far as I know, is the only company in the gaming (or comic) industry to really push SBS.  While these promotions are  good, Small Business Saturday needs more companies tying into the event to make it an actual “day” such as Black Friday, which developed on its own. I fear this won’t happen so long as the day remains a trademark of AmEx.

Here’s hoping I am wrong on these points, both that SBS will prove a major selling tool for stores and that more companies will start promoting it from both the front and back end.  The store has registered for it again, so we shall see.

Monday, November 18, 2013

Black Friday

As we did last year, we will open at 5  a.m. on Black Friday (that's the Friday after Thanksgiving for those who missed the hoopla), with the front two tables packed full of merchandise including booster displays of Magic and Yu Gi Oh, Pathfinder and D&D books, assorted graphic novels, Warhammer 40,000 and Warhammer Fantasy Battle items and more.
  Each hour discounts on the items on the tables will progressively drop according to the following schedule:

5 a.m. to 6 a.m.  10% off

6 a.m. to 7 a.m.  20 off

7 a.m. to 8 a.m. 30% off

8 a.m. to 9 a.m. 40% off

9 a.m. to 10 a..m. 50% off

Yes the discounts are lower earlier in the day, but you have a much better selection.  You can wait until the 50% off hour rolls around but we will likely have sold out of the best stuff.  We will also have a few unannounced sales that will only last for an hour but you will have to be at the store to take advantage of them.

We will also have toasted bagels and cream cheese for those who haven't had breakfast yet.

Sunday, November 10, 2013

More on Pricing

Most stores hear several times a month, if not weekly, “Wow, you have such and such.  I have been looking for this for a long time.”  Looks at the price. “Oh, well I was looking for this for a reasonable price.”
Most customers don’t realize that stores do set items at a reasonable price (after all, we are in business to sell stuff) but that price has to take into consideration both scarcity and demand. 

 There is a reason why the Dark Tower boardgame sells for $400 on Amazon and Advanced HeroQuest lists for around $200, while a Theros Thassa’s Bounty sells for a dime or less.  Dark Tower is scarce, Thassa’s Bounty much less so.  There are millions of Thassa’s Bounty cards in print, while no one is making any more Dark Tower or Advanced HeroQuest games (unless Games Workshop or whomever holds the copyright to Advanced HeroQuest decides to do another print run).  People who own copies of either AHQ or Dark Tower generally have a pretty good idea of the value of the game and won’t turn loose of it unless 1) they get what they consider a reasonable price for the game, 2) really need the money or 3) find something they want more. Generally stores get in these games under conditions 2 or 3, as purchasing a product #1 doesn’t leave much profit for the store.

The other major factor coming into play here is demand. There is demand out there for Thassa’s Bounty cards, plenty of demand, but nowise enough to absorb all of the cards that WOTC has put into print.  Conversely, there is demand out there for Advanced HeroQuest and Dark Tower, much more demand than the few copies available can satisfy, driving  the price of those few available copies way up beyond what most people consider “reasonable”.  However, if you really want a copy of the game, either because it will fill out an empty spot in your collection or you have fond memories of it from your youth (which is what drove sales of the reprints of 1st and 2nd edition AD&D books WOTC release over the past year), $400 is a “reasonable price” to pay for Dark Tower, especially a working copy of the game (our last copy only worked sporadically and sold for $250).

Thursday, November 7, 2013

The Rule of Pricing Equivalency

The rule of pricing equivalency says "Similar items should be priced similarly".  This especially comes into place when size is an issue. Take, for example, soda and bottled water.

when you buy a bottle of water, you get....water. When you buy a bottle of soda, you get.... water, flavoring, carbonation, sugar (or other sweeteners) and flavoring.  Yet customers willingly pay the same price for either, because they are the same size, even though you get much more with the bottle of soda.

Same thing with games.  Customers willingly pay $24.99 for Munchkin, even though it has only a deck of cards and a rule sheet (and a reputation).  However, I can point to a number of games that have come out packaged smaller than Munchkin, with similar contents but with a price point twice as much, that just sit there.  Why?  Equivalency.  Unless either the retailer or the publisher works to show the customer why the game in the smaller box is worth more than Munchkin (and this is where promotion comes in), the customer is going to look at the two boxes, see the $24.99 price point on Munchkin, see the much higher price point on the other game and decide the game is not worth it. The customer doesn't know anything about printing costs or economics of scale or branding, they just know that they have two games in front of them that look the same size with the same contents, but one costs twice as much.  Which one do you think the customer will choose?

Monday, November 4, 2013

Revolving Door

The news that Publisher Services Inc hired one of Target's employees who was responsible for game buying at the chain doesn't matter much to the average consumer.  However it is rather interesting to those within the industry as PSI is the company responsible for putting most specialty games on the shelves at Target.  I guess PSI thought he did a pretty good job and wants to use his expertise in getting their clients' products on the shelves in other chains.

Friday, November 1, 2013

Comic Values and Pokemon Values

If you collect comics, planning to sell them at a later time to fund a car, college, house, etc. read this first.  Back in the late 90s, when Pokemon was hot and I had people lining up outside the store for the new set, I had people planning to hold onto their collections or buying cards for their kids, expecting to sell them later when the price appreciated.  I always told the parents, and tell parents who look at Yu Gi Oh card prices now, "Don't do it."  Most cards (and comics) have not held value over the long term.

With very rare exceptions, you will get almost nothing (and by almost nothing I mean a nickel to 10 cents) for any comic published during the past 20 years.  Scarcity drives up price and too many people held on to their comic collections, and Magic collections, and Pokemon collections, and Yu Gi Oh collections, expecting they would get more valuable over time.  There is a reason Bayou sells for between $50 to $1100; no more are getting printed and there are not that many around. 

The Egyptian God Cards for Yu Gi Oh used to sell for $30+.  However, Konami has reprinted them several times, bringing  the price for some of them to the $3-4 range.  Vampire Lord, at one time a $20 card, now sells for a dime.

The other factor driving prices is demand. There is not a huge demand for older comics, nor older Pokemon cards.  I might sell a comic for $3-$4 that I only offer you a dime for, but I will also probably keep that comic (or card) in inventory for a reaaaaal long time.