Tuesday, August 27, 2019

Rugged Consistency Does Not Come Cheap

I encountered an article called The Costs of Reliability by Sarah Constantin.  Constantin poses the question, "Why can people be so much better at doing a thing for fun than doing that same thing as a job?"  Her argument went in the direction of it being easier to "do something valuable," in the abstract, than to meet a specific commitment.  I think she's correct in that assessment but that the answer goes a little further in luxury goods industries like mine.

A professional business has to stand behind the work they do or the product they sell, and that need permeates process and reaches its tendrils into virtually every workflow.  And that consistency, the consistency to provide a "ruggedly consistent" experience, for lack of a better adjective, costs.  It has labor cost, materials cost, FFE (furniture, fixtures, and equipment) cost, logistical/focus cost, and it can inform the choice of merch to be carried or service(s) to be offered, meaning there is also cost of goods involved.

Constantin's defense of her thesis nicely sets up my extension of the argument, which leads me to believe we really are looking at different overlapping facet groups on the same gemstone.  She notes:

The costs of reliability are often invisible, for they can be very important.  The cost (in time and in office supplies and software tools) of tracking and documenting your work so you can deliver it on time.  The cost (in labor and equipment) of quality assurance testing.  The opportunity cost of creating simpler and less ambitious things so that you can deliver them on time and free of defects.  Reliability becomes more important with scale.

Absolute truth right there.  I want to touch one more part of her argument and then illustrate a little of what we see in the hobby game industry and why I apply the filter of rugged consistency to this issue:

In general, you can get greater efficiency for things you don't absolutely need than for things you do; if something is merely nice-to-have, you can handle it if it occasionally fails, and your average cost-benefit ratio can be very good indeed.  But this doesn't mean you can easily copy the efficiency of luxuries in the production of necessities.  This suggests that "toys" are a good place to look for innovation.  Frivolous, optional goods [...] we should expect technology that first succeeds in "toy" domains to expand to "importnat, life-and-death" domains later.

Okay, so the thing is, in my industry we basically sell toys.  So we should be at liberty to have stuff fail and/or suck, right? As long as it's not too often, hey man, that bleeding edge is bloody for a reason, isn't it?  And that's where consumer behavior throws us the curveball: Despite toys and games being indulgent luxury goods, and not life necessities, consumers still gravitate toward dependable and proven-successful options.  And this is true for our "services" as well as our merch.


  • More than any other factor, consumers dislike being made to wait.  Were it not for this factor, far more stores would get by with skeleton crews and single register stations.  I have a minimum staff anytime census of two, and two main register stations with additional backup options in case we have hardware issues, and I'm often on site to ease congestion in case of a sudden spike in visits.
  • Similarly, a single kiosk can be slow, or go down, or simply have a slow shopper occupying it.  We have four kiosks up (one staff-facing) and could use two more.  Multiple factors get addressed in redundancy: Wait reduction, equipment problems, traffic flow.  The other day I had a guy ordering an entire foil cube on the kiosk.  You think I want some kid who needs $3 worth of Pokemon cards leaning on that dude to hurry up and finish because there's only one kiosk?  No sirree.  That gentleman and his cube can take all the time he needs.
  • After a secondary or tertiary game has its moment, players tend to flight-to-quality their way back to Magic: the Gathering, Pokemon, Dungeons & Dragons, and Warhammer.  Any time there's economic turbulence, that flight-to-quality happens faster as consumers prioritize.  Put those two factors together and it doesn't make a lot of sense to spend on other things, even new hotness, if that results in even a temporary skimp on the category leader(s).  (Provided a given store carries that category.)
  • Players tend to return to a place where the events are run the same way every time, even if that method has inefficiencies.  They know what to expect and the event becomes comfort food for them.  They sign the entry sheet the same way every time.  They sit at the same table until the pairings go up.  Comfort food.  We spend extra labor and attention to make sure if we're changing anything about that process, it's subtle and unintrusive.
  • Players tend to come in on the nights when their favorite staff member is working, especially if it is their friend.  This brings with it a cost where the business needs to train that staff member not to spend too much time socializing, though obviously being a friendly host aligns well with the business's objectives.
  • In terms of the shipping service, we overship by probably 10% of cost in the packaging, handling, and sometimes even postage we spend, because we know that when a buyer receives something in the mail and it's in rough shape, the instant reaction is absolute fury toward the seller.  Even if it's the courier's fault!  (They may sometimes realize that later, but still.)  We even "help" the couriers to some extent by trying to pack ruggedly in such a way that the goods won't be as susceptible to damage.  When sending things to FBA, much the same principle applies.  Prep and pack it so that a tortured warehouse slave with zero seconds to spare will be able to process it inbound and outbound without damage.
  • On the product side, when it comes to buying video games that won't fall apart when children get access to them, there's only one name: Nintendo.  This means stores can tend to see fewer defects in Nintendo products, but also needs to test and prep well, because someone will remember if their Game Boy Advance they just bought wakes up dead.  It's such a rare thing, that store must not be taking good care of its merch!
  • Speaking of which, I could write an entire article on general merch care as it overlaps into the world of comics as well, but I'm no longer in the comics business, so I won't.  Suffice it to say that there are a myriad of things we do, from shrink-wrapping D&D books to the simple sleeving of singles, aimed at preserving the condition and thus value of collectibles, and doing all those things incurs costs.
  • For that matter, no merch is ever on the floor at DSG and I have seemingly superfluous shelves at the bottom of the grid gondolas.  Despite the expense to buy and deploy these things, they are there so that we can mop the floor without splashing the merch.  This was a critical thing when we had comics on the rack, not quite as crucial now with many general tabletop products not being collectible, but people still want to buy things that are in nice shape.
  • The rabbit hole would go deep indeed if I got into the realm of products I don't carry, or don't yet carry, because I haven't solved how to deploy them in such a way that they are shoppable and look great but don't get destroyed by daily contact or become shoplifting magnets.


In the video game world, publishers bend over backward to make sure there is rugged consistency in their product, even when it becomes costly to do so.  Microsoft reportedly spent a billion dollars fixing red rings of death in the original Xbox 360 between 2006 and 2010, what division VP Peter Moore said was Xbox's "Tylenol Moment."  Sony's reputation suffers to some extent due to not opting to address either the PS3 Yellow Light of Death or the PSN Security Breach of 2011 with the same degree of comprehensive make-it-right.  Nintendo just recently had to defend their own reputation with the Switch "drift fix," with joy-cons having a defect crop up somewhat more commonly than statistically likely.  Nintendo offered free repair, even outside the warranty period, with free freight pre-paid, and it was fast.  I had one of the "drifting" left joy-cons, and I had it back and in fully working order inside of a week.  Nintendo then released Switch Model HAC-001(01), a full system revision with more battery life, a somewhat newer screen fabrication, and a differently engineered thumbstick to correct that drift issue from the outset.  The Big N ain't screwing around when it comes to reliability.
Ultimately, it falls upon everyone in the vertical to compete based on rugged consistency, because the only way to build trust with the consumer is for that consumer to get what they want, dependably, and at the quality expected, when they do business with you.  If you can't provide that, the consumer has a literal marketplace of options to turn to instead.  And it costs a lot to acquire a customer, but even more to recover one.

Tuesday, August 13, 2019

Seven Years Strong

Saturday, August 10th, 2019 marks the seventh anniversary of the brick-and-mortar storefront of Desert Sky Games.  If you had asked me in 2012 whether we would still be doing this at the end of the decade, even the optimistic version of Bahr would have been forced to answer, "Probably not."
Nonetheless, somehow we persevered and the store today is basically performing the best it ever has.  The last few anniversary posts have adequately reminisced about the events we either enjoyed or endured all these years, so I won't revisit those subjects.

One thing I will observe is that a business can't go seven years without losing some things.  We've been diligent and worked hard, and we've created a business culture and a business history.  We've put in the hours and planted the flowers.  We've sorted more cards than there are grains of sand on the beach, or so it would seem.

After all those years of effort, there are some things that are now gone forever.

And those things are called bank loans.

...

/flex