Can Hobby Stores Make Their Saving Throw?
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    Hello everyone, Darryl here with this week’s gaming news! ICv2 sales rankings are in for the tabletop gaming industry, BattleTech faces yet another lawsuit from Harmony Gold, DragonFire product line information announced, and more! ICv2 released their quarterly sales rankings for hobby game stores for the second...

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  • Can Hobby Stores Make Their Saving Throw?


    We've talked before about geek culture taking over the world, from movies to conventions, but another trend is accelerating that may affect hobby gaming: the death of the retail store. Can geek culture save it?

    From Craftspeople to Chain Stores

    Retail stores came into vogue in the 1870s. Prior to that point, shoppers primarily dealt with craftspeople locally:

    It wasn’t until mass manufacturing gathered steam, fueled by the national railroad and wider transportation networks, that the concept of a department store became viable. John Wanamaker, whom many generally regard as the pioneer of marketing, opened the first department store in Philadelphia in 1876. Unlike small shops at the time, Wanamaker’s made use of price tags and a money-back guarantee. Out went constant haggling with small-time proprietors, and with it, various cottage industries.

    It didn't take long for another company to upend the department store mode. It was Sears who cut out the middleman, a sort of Amazon of its day:

    Just as Wanamaker and its progeny—Macy’s, Lord & Taylor, Nordstrom, Saks, and others—forever changed the retail landscape in dense cities, Sears made a dent in sparsely populated rural areas. Sears, Roebuck & Co.’s mail-order business flourished at a time when farmers in rural America were selling their crops for cash and buying what they needed from rural general stores.

    And so that model continued. Until now.

    Death of a Salesman

    Retail store closings have been accelerating for some time, but the rate of closures has sharply increased this year. Jackie Wattles reports at CNN:

    Brokerage firm Credit Suisse said in a research report released earlier this month that it's possible more than 8,600 brick-and-mortar stores will close their doors in 2017. For comparison, the report says 2,056 stores closed down in 2016 and 5,077 were shuttered in 2015. The worst year on record is 2008, when 6,163 stores shut down. "Barely a quarter into 2017, year-to-date retail store closings have already surpassed those of 2008," the report says. If stores do close at the rate Credit Suisse is projecting, it could mean America will lose more than 147 million square feet of retail space this year.

    Why is this happening? The decline, triggered by the global recession in 2008, has two primary drivers, cheaper clothing alternatives and online shopping:

    The growth of cheap, trendy fast-fashion has been unstoppable in the US in the past decade. To illustrate the point, Macy’s famous Manhattan flagship store on 34th Street now shares the corridor with three H&M stores, including the world’s largest, which is literally across the street from one of its other locations. Internet retailers have been grabbing customers from department stores, too, and reducing foot traffic to their brick-and-mortar stores. Financial firm Cowen and Company predicts department-store apparel sales will grow a little in the coming years, but Amazon will blow past them to surpass Macy’s as the biggest clothing retailer in the US by 2017.

    It's easy to see why some analysts are predicting the death of brick-and-mortar altogether. And yet there are standouts.

    Those Still Standing

    There are companies that are thriving in this new economic environment, like discount retailers T.J. Maxx and Marshalls, which points to price being a primary factor in the decline of brick-and-mortar. But more high-priced stores are doing well too. Apple's model in particular shows that experience is still important to customers, and that's good news for geek stores.

    Hobby stores can resist these trends. A defining trait of geekdom is its devoted fan base, a key attribute for return customers. Additionally, hobby gaming in particular is a participatory experience that requires more than just a sale. Synchrony Financial's white paper, "The Future of Retail," explains the key attributes that will differentiate stores in the future, and geek stores fit the bill:

    Brick and mortar stores will exist in the future, but there will be fewer of them. A new model of delivering not only products, but also genuine brand experiences is emerging. People are social by nature and will be drawn to gathering places to share ideas and be entertained. It’s not just about making money. It’s about building trust. Retailers who tap into this trend will be rewarded.

    Hobby gaming also tends to have a much stronger form of brand identification that encourages loyalty:

    In high-involvement categories, specialty retailers will remain a go-to, but variety will be important. With that said, shoppers are reaching a tipping point around American consumption. Feelings of angst about acquiring too much “stuff” is driving a shift toward purchasing experiences rather than things.

    ICv2 notes that stores are recognizing the value of geekdom by shifting their inventories, with Barnes & Noble, Gamestop, and FYE jumping on the geek bandwagon.

    Although the future of brick-and-mortar stores looks uncertain, it seems likely hobby gaming outlets -- with their interactive experiences, loyal fan base, and strong brands -- will come out stronger from the downturn.

    Mike "Talien" Tresca is a freelance game columnist, author, communicator, and a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for sites to earn advertising fees by advertising and linking to http://amazon.com. You can follow him at Patreon.
    Comments 64 Comments
    1. EthanSental's Avatar
      EthanSental -
      I'd be curious to see how many game stores have closed in the past 2 years. I've seen 2 close that are on my 60 mile drive to work. Both tried to focus on the growth in board games but maybe their location and populace in and around weren't into gaming to keep them afloat. Both had maybe 45k in population within 15 miles of the location. Maybe poorly run and managed.
    1. Mercule's Avatar
      Mercule -
      The "experience" is a double-edged sword for the FLGS. Even the nicest stores I've visited have a vaguely Cheeto and Mountain Dew atmosphere. The owners/employees are often super nice, but don't always appear "professional". I don't necessarily want a guy in a tie to sell me my D&D books, but athletic shorts and a death metal T-shirt might be a bit too far in the other direction. Sometimes, the counter staff is engaged in other stuff -- which is cool, but.... I can't tell who they are amongst the other unwashed nerds, when I actually want to check out.

      Speaking of the other nerds, some are great, but there are others who aren't so much so. I've got four girls who'd really love to become nerds (or to continue to grow as such), but the level of language as well as certain other behavioral issues (stop staring at my teenage daughter, yes, she's athletic) can make it an unpleasant experience.

      I'm not saying these are universal, by any means. I'm just saying that it's not exactly the same sort of sub-culture experience one gets going into a gun, bike, or camera store.
    1. TrippyHippy's Avatar
      TrippyHippy -
      Game stores close periodically in New Zealand largely because the cost and time of importing is generally higher than ordering online. However, some keep going - particularly when they diversify their trade and establish communities of gamers and places to play. The slow death of retail, in the light of Amazon and others, is trend across the board however. A lot of high streets in smaller towns seem to be increasingly dominated by eateries of various types - it's one thing you can't wait for three weeks delivery!
    1. lewpuls's Avatar
      lewpuls -
      The blessing for FLGS is that they sell physical products, not "digital" (electronic) products such as video games. Digital tends to race to zero pricing, for a variety of reasons. For example, most mobile video games are free-to-play.

      Perhaps a reason for the less-than-desirable atmosphere one might encounter in game shops, is the crossover from video games, where many "fans" have pretty undesirable traits (especially from a woman's point of view).
    1. JonnyP71's Avatar
      JonnyP71 -
      Quote Originally Posted by Mercule View Post
      Speaking of the other nerds, some are great, but there are others who aren't so much so. I've got four girls who'd really love to become nerds (or to continue to grow as such), but the level of language as well as certain other behavioral issues (stop staring at my teenage daughter, yes, she's athletic) can make it an unpleasant experience.
      One shop near me has 2 rooms that can be hired out for gaming - signs hang on the walls stating that if anyone's personal hygiene is deemed offensive then they will be asked to leave. That's hardly a good advert for our hobby. We hire one room most Saturdays, but have to keep the door firmly closed as the other room is often filled with excitable lads in their late teens playing MTG noisily!

      We've had 1 local shop close very recently - its demise was essentially down to a run of bad luck, but the owner hadn't got the cash reserves to carry him through a lean time.
    1. Yaztromo's Avatar
      Yaztromo -
      I guess this is part of a wider trend covering all kind of face to face experiences, from retail to gaming.
      I really hope face to face interaction will survive!
    1. Tormyr's Avatar
      Tormyr -
      Up until last year, my FLGS was At Ease Games in San Diego, CA. A few years back, they moved from their Poway location to a large strip mall location on a busy 6 lane road. The new location had plenty of space for product with wide aisles to walk through and around 2 dozen tables. After 2 years of developing their clientele to the point where they were busting at the seems (especially Wednesday night with both Magic and D&D), they took over the next space that the crossfit gym had vacated. This doubled their space, allowing them to partner with a local brewer to install a small bar, add a second floor room, and a dedicated wargaming room. The owner has succeeded by being in a high population density area that is easy to get to with lots of playing space and scheduled events the entire week.

      Since moving to Brooklyn, NY at the start of the year, I have been playing at The Brooklyn Strategist. As it is in New York, the space is quite a bit smaller. They have a double-storefront space that allows about a dozen tables inside, a half dozen tables out back, a small cafe, and limited shelf space for product, but they can pull additional product from inventory in the basement. The product prices are a little below MSRP. The way they succeed is actually charging for the tables. Players pay $10 per person per 4 hours or get a membership. The store also does after school programs, summer camps, and events nightly. Players come from all over New York City to play D&D on Wednesday nights.

      While I have no doubt the face of retail is changing, and FLGSs are having a hard time of it in some places, my personal experience has been overwhelmingly positive.
    1. Barantor's Avatar
      Barantor -
      In more rural areas where a local gamestore is the only alternative to Amazon it is a hairy prospect to keep a game store afloat. Even in smaller cities the market is small and thus a store owner has to compete not against other hobby stores, but the ease of online retailers.

      Table space is the big seller at stores now in my area rather than the actual store but I don't think the market can sustain a place where they charge for the tables. It's a pity in a way because I was introduced to gaming by stumbling into a gaming store thinking it was a toy store when young, but today we have the internet to explore the world and it's a lot more open to geek culture, especially those who may have trouble socially.
    1. jasper's Avatar
      jasper -
      Hobby shops are just another niche business. Like Golf, hunting, gun, radio control, sewing (cross stitch, needlework, crewel, yarn), and coffee (starbucks). Some of the niche business have a huge customer base, some don't. So it all falls back to customer service.
    1. Mallus's Avatar
      Mallus -
      My guess would be the success of a game store is largely dependent on population density. There are a few comic/game stores in the Philadelphia area with active communities. Like nerdy coffee shops. Seem to be doing well as hybrid retail/social spaces. I don't have much use for them. My gaming purchases are either through Amazon or digital download, and we usually play in our homes.

      The exception to this being a few OSR products I bought physical copies of because they double as art objects; A Red and Pleasant Land, Fires on the Velvet Horizon, Maze of the Blue Medusa, Vornheim.

      Honestly, if my group played in public, it'd likely be at a bar. Fortunately, I just found out from an article here that one of my favorite pubs in town -- Sardine -- is running a monthly gaming night.
    1. Warpiglet's Avatar
      Warpiglet -
      Few want to really think this through. It all comes down to harsh realities. I do not think the answer is a binary choice though.

      If I can get the same product more cheaply from an online source what does economics tell us? Its pretty simple. Unless there is added utility from a game store and the distribution channel, consumers will bypass it. I love game stores. However, what I am saying seems to hold true across many retailers.

      Does this mean that there is no place for a game store? I believe they will have to adapt.

      For example, Miniature Market and Cool Stuff are physical stores that grew an online presence. One of them is local to me. They sell and they sell more cheaply and as a result, they move units.

      The problem with a hobby shop charging premium prices is that people can get so much information online for free and as the utility of the hobby shop experience goes down, people are less willing to pay the premium. Not only that, but the online presence means that a person in a rural or unsupported area is even less likely to travel to a hobby shop.

      The answer lies is a joint venture. The prices need to come down. For this to happen, more units have to be sold and the online presence is the only way to make this happen on a reasonable scale.

      If this happens, I do in fact browse at the hobby shop AND make my purchase there. As it is, I browse and buy something, but often make my bigger purchase online. It is fun to browse, but not worth a 33% markup.

      My sense of charity is directed to charities that support ill children and so forth. I do not feel compelled to keep my FLGS open. However, the FLGS that does not charge too much of a premium gets my money.

      I will pay a premium for greater utility. I paid more for example to get my 5th edition Player's Handbook sooner. I could not wait and they got a little extra money from me in exchange for their early release.

      In my perfect world, these brick and mortar stores will survive! But I believe they will have to adapt in order to do so. No amount of sentimentality is going to do the trick. I have seen people complain bitterly about online competition. Complaining will not change a thing. Getting a webpage and a competitive price will make all the difference.
    1. fantasmamore's Avatar
      fantasmamore -
      Quote Originally Posted by Warpiglet View Post
      Complaining will not change a thing. Getting a webpage and a competitive price will make all the difference.
      But how are they going to compete against Amazon?
      And it's not just that.
      I am going to buy The curse of Strahd next month. I will most probably going to use it with FG or Roll20 and since I can't afford to pay for the same content twice I will most probably skip the physical product and buy it directly from the VTT eshop. I believe that in the years to come the way that we consume the content is going to change drastically (if it hasn't already). In this enviroment I fear that the small stores have no hope...
    1. Flexor the Mighty! -
      Quote Originally Posted by Warpiglet View Post
      Few want to really think this through. It all comes down to harsh realities. I do not think the answer is a binary choice though.

      If I can get the same product more cheaply from an online source what does economics tell us? Its pretty simple. Unless there is added utility from a game store and the distribution channel, consumers will bypass it. I love game stores. However, what I am saying seems to hold true across many retailers.

      Does this mean that there is no place for a game store? I believe they will have to adapt.

      For example, Miniature Market and Cool Stuff are physical stores that grew an online presence. One of them is local to me. They sell and they sell more cheaply and as a result, they move units.

      The problem with a hobby shop charging premium prices is that people can get so much information online for free and as the utility of the hobby shop experience goes down, people are less willing to pay the premium. Not only that, but the online presence means that a person in a rural or unsupported area is even less likely to travel to a hobby shop.

      The answer lies is a joint venture. The prices need to come down. For this to happen, more units have to be sold and the online presence is the only way to make this happen on a reasonable scale.

      If this happens, I do in fact browse at the hobby shop AND make my purchase there. As it is, I browse and buy something, but often make my bigger purchase online. It is fun to browse, but not worth a 33% markup.

      My sense of charity is directed to charities that support ill children and so forth. I do not feel compelled to keep my FLGS open. However, the FLGS that does not charge too much of a premium gets my money.

      I will pay a premium for greater utility. I paid more for example to get my 5th edition Player's Handbook sooner. I could not wait and they got a little extra money from me in exchange for their early release.

      In my perfect world, these brick and mortar stores will survive! But I believe they will have to adapt in order to do so. No amount of sentimentality is going to do the trick. I have seen people complain bitterly about online competition. Complaining will not change a thing. Getting a webpage and a competitive price will make all the difference.
      Yep. I want to support my LGS but beyond charity they don't offer me that much. I do go to Miniature Market myself since I can order online and go pick it up, and pay discount prices. There is another shop in the area Game Nite that seems to do really well since they have a lot of public gaming space and private rental rooms and they were packed on Saturday, but shopping there is a MSRP experience and I can't see paying full price for books I can get elsewhere cheaper. I only really do small impulse buys from there.
    1. dave2008's Avatar
      dave2008 -
      Quote Originally Posted by Warpiglet View Post
      If I can get the same product more cheaply from an online source what does economics tell us? Its pretty simple. Unless there is added utility from a game store and the distribution channel, consumers will bypass it. I love game stores. However, what I am saying seems to hold true across many retailers.
      Actually, behavioral economists will tell you that people often do not act rationally and do no base their purchasing on the best economic choice.

      As an example. I routinely buy my D&D products from my local FLGS and pay a premium price for the product over what I would pay for it online. On top of that it cost me gas and 40+ minutes (round trip) of my time.
    1. Warpiglet's Avatar
      Warpiglet -
      Quote Originally Posted by dave2008 View Post
      Actually, behavioral economists will tell you that people often do not act rationally and do no base their purchasing on the best economic choice.

      As an example. I routinely buy my D&D products from my local FLGS and pay a premium price for the product over what I would pay for it online. On top of that it cost me gas and 40+ minutes (round trip) of my time.
      Well, it is true people often act irrationally. It is also true that if you lower prices, you move more units. If you move more units, your competitors typically move fewer units.

      The example I provide is the very fact that many stores are closing up as online retailers are flourishing.

      As a counterpoint to your example, I will not drive further and spend more if I can help it. Occasionally, yes. Typically, no. In aggregate, the higher prices mean fewer sales. In the old days I merely knew game supplies were expensive and I could not afford as much as I would like.

      Now that I know things can be more cheaply acquired I make use of this knowledge. I do not think I am particularly exceptional in this regard.
    1. Zarithar's Avatar
      Zarithar -
      In my experience, if it wasn't for MTG, most game and comic book stores would be shuttered. I think the sales of booster packs and snacks are what keep most of these places afloat.
    1. DragonLancer's Avatar
      DragonLancer -
      We used to have a FLGS up until ten years ago. The store owner decided that hobby gaming wasn't going to pay the bills so turned the store into a bicycle store. He still runs Magic tournaments and orders gaming stuff for us but it's not the same. Unfortunately the internet has destroyed gaming stores due to cost. People want cheap and turn their back on stores when those stores are the hub for gamers. The only way stores are going to make their saving throws is if gamers continue to support their local store rather than buying online.
    1. BrockBallingdark -
      Quote Originally Posted by DragonLancer View Post
      The only way stores are going to make their saving throws is if gamers continue to support their local store rather than buying online.
      Not gonna happen.
    1. Warpiglet's Avatar
      Warpiglet -
      Correct. Unless business models change...

      Look at Miniature Market and Cool Stuff...

      In reality, these stores will remain rare (i.e. brick and mortar with big online presence) and most others will keep dying off. Its not fun to imagine but probably realistic. To charge more you most offer substantially more.

      Again, the hubs were once the place to learn. So much is now duplicated by websites (EnWorld anyone?) among others.

      The sentimental part of me hates seeing old things torn down for the new. The realistic part of me knows it is unavoidable...with a few exceptions.
    1. pickin_grinnin's Avatar
      pickin_grinnin -
      I live in the DFW Metroplex. There are a lot of game stores in the area, including two that are within 10 minutes of me. There are at least a dozen others within a 20 minute drive.

      Only one ever carries the things I am interested in buying, though, and it's 45 minutes away. I go there when I'm on that side of the Metroplex and usually buy something, but that only happens a few times a year. It stays open long hours and has a deep selection, so I like to support it when I can.

      The other stores never have anything that interests me in stock. No matter how many times I visit them throughout the year, I almost always walk out empty-handed. MTG, board games, Pathfinder books, Games Workshop products, and D&D stuff make up 3/4 of their stock, at least, and I'm not interested in any of those things.

      I understand the economic issues facing game stores and sympathize with them. I'm even willing to buy things for higher prices than I could find online, just to help them out. I'm not going to buy things I don't want or need, though.
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