WotC and brick and mortar retail stores - Greg Leeds weighs in

[Windjammer]

Basically, this guy is completely right about the gaming store functioning more as an "order taker" than a retail store.

This is the part I don't get fully. I understand that the experience he relates and which you confirm is very real for some people. I wonder though how far it generalizes. See, the FLGS owners I've come to know in Germany and the UK over the years had more of a second hand car salesmen attitude. They perfectly knew that I was more informed than them about products I already wanted - so they capitalized on hooking me onto product I had literally no idea about before entering their store. Product they easily knew more about than me.

It's true that most RPG'ers are creatures of loyalty to their game of choice. So what you do as a retailer is to expand the number of those loyalties.

 

[ki11erDM]

The last time I went into my local game store was for the PH2 game day event… and they asked me “what is a game day event?” : (

Up to that point I had been splitting all my book purchases between online and in store… I don’t bother with that any more.

I can’t even imagine what they would say if I asked about the Encounters…

 

[Festivus]

I don't see a lot of what they are complaining about with our FLGS. They ordered EXTRA copies of PHB3 after they sold out of their initial order, our gameday events are some of the best business days for the FLGS in terms of 4E book sales, we always fill up the special events, and we have six or seven encounter tables, all full. The premiere program has driven a ton of business his way and he's very happy about it.

4E books have been a boon for them, and very likely will continue to be. The influx of 3.x books for trade for 4E books has been on the uptake too, so much so that they don't offer as much in trade for them as he used to. I for one, see more and more people coming to our events who used to play in the late 70's early 80's, saw the you tube video of the robot chicken guys and decide to come in. I am unsure about the new direction with the red box starter set (there is a starter set already, and you can get most of the rules from the free download now)... but nothing takes the place of sitting down and having someone show you how to play the game.

The complaint about the person making a phb1 rogue and a phb3 shardmind psion struck me as funny, because I couldn't create a week 1 shardmind psion with the character builder because you can't do it yet... so I earned 8 RP, same as the person with the human rogue and earned 5rp for using a CB character, and 3 for finishing the encounter.

I look forward to more and more retail support from WoTC. I also continue to purchase the bulk of my books at the FLGS, as well as games, because I find it a valuable resource. The employees are all very knowledgable about EVERY product they sell, they are courteous, clean, and the store is nicely arranged.

 

[Henry]

When I was at D&D Encounters, the game store ran out of PHB3. They had 12 on a table at the front of the store (along with the new tiles and something else, forget what) when I got there and less than 2 hours later, all 12 had sold.

I bought my PH3 two weeks ago at a Local Game store, just before playing in a Con there. They were holding the PH3 Gameday the next week. I couldn't find it at any Barnes & Noble in town.

 

[ProtoClone]

Gotta wonder about the guy being in Michigan, which has Detroit hanging around the state's neck. That can't help business.

I was in my local game store this weekend (Austin, TX) and it was packed. Can't say how much people were buying, but there was usually someone at the register.

Well those of us who live here in Michigan, specifically West Michigan where Marcus's stores are located as am I, Detroit has some effect on us but not a whole lot. We here in W-Mi are more effected by companies like Pfizer on this side of the state.

But all-in-all, Michigan is just in a bad spot with or without Detroit. Detroit has been having problems for a while even before our economical downturn.

 

[Cadfan]

This is the part I don't get fully. I understand that the experience he relates and which you confirm is very real for some people. I wonder though how far it generalizes. See, the FLGS owners I've come to know in Germany and the UK over the years had more of a second hand car salesmen attitude. They perfectly knew that I was more informed than them about products I already wanted - so they capitalized on hooking me onto product I had literally no idea about before entering their store. Product they easily knew more about than me.

It's true that most RPG'ers are creatures of loyalty to their game of choice. So what you do as a retailer is to expand the number of those loyalties.

Yeah, I can see that. Its just that I don't give them much of an opportunity to try that on me. I don't need multiple RPGs, and in any case I'm likely to spend some time on rpg.net reading up on them before making a purchase- so at best the retailer could direct me to something new and then, if he's lucky, I'll buy it on my next visit.

The only time a gamestore has been able to convince me to buy something new has been the boardgame store up north of here. They have "game days" where lots of people come in and play games, most of which are provided by the store. In that case I purchased a new game after seeing it in the store, but I was able to play the game twice before I had to make that decision, so I knew I liked it. The more typical experience, even there, is to try the game out and then go home and think about it for a while.

They actually have a really good model to keep their customers purchasing items from them instead of online. 1/10th of the purchase cost is given back to you in the form of store credit. But if you use the store credit you don't get any store credit on the particular purchase you just made. So its really easy to tell yourself that you'll just take the store credit on the 50 dollar game you just bought, and eventually you have quite a large amount of it lying around. Plus attendance at the game day events has a $10 cost, but includes pizza and pop, and gives you $5 in store credit at the end of the day- a perfect recipe for convincing you to buy a game you tried and liked as you walk out of the door.

But that's just the boardgame store. For miniatures and rpgs the other store I go to provides little more than a hub at which I can ask them to purchase items for me, and I'm not sure if it would be possible for it to mean more.

 

[amysrevenge]

I don't see a lot of what they are complaining about with our FLGS. They ordered EXTRA copies of PHB3 after they sold out of their initial order, our gameday events are some of the best business days for the FLGS in terms of 4E book sales, we always fill up the special events, and we have six or seven encounter tables, all full. The premiere program has driven a ton of business his way and he's very happy about it.

From the small amount of first- and second-hand access to retailers' internal discussions that I have, I think that the relative success/failure of 4E, and of these event-driven sales, is about 95% attributable to the attitude of the FLGS owner/staff toward 4E and, to a lesser degree, the official Organized Play initiative.

It seems that enthusiastic early adopters of 4E have had their expectations met with huge sales and big successful in-store events. Meanwhile, grudging 4E haters have had their expectations met with lackluster sales and ghost-town events.

 

[Mark]

This is the part I don't get fully.

This seems to have been misread. Distributors are being described as order takers, not game stores (or retailers). The game store owner (who is a retailer, btw) is saying that information comes from elsewhere and he simply places orders with distributors rather than relying on them for information.

Distributors are more often now concentrating on the "order taking operations."

 

[Dannager]

From the small amount of first- and second-hand access to retailers' internal discussions that I have, I think that the relative success/failure of 4E, and of these event-driven sales, is about 95% attributable to the attitude of the FLGS owner/staff toward 4E and, to a lesser degree, the official Organized Play initiative.

It seems that enthusiastic early adopters of 4E have had their expectations met with huge sales and big successful in-store events. Meanwhile, grudging 4E haters have had their expectations met with lackluster sales and ghost-town events.

I think this only reinforces the notion that a proactive, enthusiastic salesperson will produce better sales than a reluctant, disillusioned one.

Enthusiasm > Distaste

 

[Windjammer]

This seems to have been misread. Distributors are being described as order takers, not game stores (or retailers). The game store owner (who is a retailer, btw) is saying that information comes from elsewhere and he simply places orders with distributors rather than relying on them for information.

Thanks for clearing this up! Yes, I'm still very bad at getting my head round the 3-tier model (publisher, distributor, retailer) and reliably miss its subtleties when it's brought up in a debate. Last time was triggered by an interesting post by Ryan Dancey here (July 2009), which I excerpt:

James actually glosses over one of the biggest problems with the economics of the gaming industry, which is the discount structure.
Most pubilshers offer a discount of 60% >OFF< SRP to their wholesalers. That's right; the publshers get $0.40 for every $1 of retail price. This is a pricing structure that is insane. In most retail businesses, an extremely good margin is called a "keystone" margin, and it's 50% off of SRP. When Hasbro or Mattel sells to Wal*Mart, the discount is closer to 30% off of SRP. Why in the world do we have an industry where 60% of the value of the products is captured by the distributors and the retailers?
A long time ago, 10 years or more, the industry had a different margin structure. The discounts to wholesalers were in the 50% range. Over time, the distributors were able to negotiate lower and lower discounts, because the publishers at the time were weak. Now, any discussion of changing the discount structure imperils the entire 3-tier hobby gaming channel. If the margins were "right sized" tomorrow, the remaining holdouts in the hobby retail teir would be destroyed. That catastrophe is judged worse than suffering with an insane discount structure.
Instead what is happening is that pubishers are finding more and more ways to "go direct" and get around the channel. They are all hoping that they can find a viable alternate distribution system before the brick & mortar retail tier dies. Think of it this way - if Wizards could get the full price for a D&D book, they could cut the price IN HALF and make the same amount of money.

It's that thought which recently caused me to speculate whether wizards.com, like paizo.com, will ever offer a direct sales model on their webpage, i.e. an online store.