Tuesday, December 1, 2015

So This Is What Retail Looks Like

It's easy in the comic and hobby game trade to feel like your business is the exception to every rule, the outlier on every metric.  Last weekend was a rare chance for us to experience the opposite.

The misfit feeling was pronounced for us on previous Black Friday weekends.  While our store had reasonable business just by dint of it being a weekend as always, there was never that explosion of dollars and doorbuster mayhem like you see at the big box stores.  We tried to run special events and it never mattered.  Got a bit of attendance but nothing like other holiday tournaments, got a bit of revenue but nothing like December 26th or a typical weekend around tax refund time or goodness, a Magic: the Gathering release weekend.

In 2012, our store was new, and our November sucked rags.  A steep drop from a golden October fueled by Return to Ravnica, Magic's State Championship tournament, and the delightful corona of being the new hotness in town.  Fortunately, we weren't paying any rent yet, so grinding up enough eBay sales to pay the bills was a perfunctory exercise.

In 2013, Theros drove a reasonable November, but the Black Friday weekend did nothing for us.  DSG was still a Magic: the Gathering store first, foremost, and almost entirely.  We had just received our first shipments of graphic novels, and December would be the beginning of comics, which by mid-2015 had become our second-biggest category.  Our special Black Friday booster draft marathon was stillborn.  Friday Night Magic revenue salvaged the day.

In 2014, I had taken over main operations in July, and my store manager turned in his notice the week before Thanksgiving.  My staff didn't have a ton of confidence in me yet.  I had spent four months trying to rebuild the tatters of my inventory resulting from the departure of the previous manager and ex-business-partner.  We didn't have a lot, but we had a decent amount of Funko POPs, we had comics, and board games were only a mild embarrassment.  And we had a ton of Cards Against Humanity.  I botched the execution a bit with an overcomplicated rack of special offers for Black Friday, but it was still a solid sales day, as was Small Business Saturday.  Not holiday-shopping good, though.  Not like late December got to be.

This year, November was pretty slow for about half the month.  You've already read here about my travails at trying to jump-start sales in a board game category for which I have a respectable amount of coverage on the shelves finally.  Magic has been in a lull due to Battle for Zendikar underperforming.  Comics and miniatures have been strong and are a huge part of what is making the month work.  With Black Friday weekend on the horizon, I hoped against hope that a year and a half of building my store up into a "real retail" operation would finally pay off.

Execution this time was easier; I was informed by the previous year's trial and error.  Other in-town stores brought in restaurant menus full of complex sale conditions, and I hit the advertising blitz with the simplest, easiest, most attractive offer I could imagine.  "As easy as 1-2-3 at DSG."  1. Amazon Prime price-matching on board games and miniatures for any purchase totaling $35 or more.  2. All graphic novels 40% off.  And 3. Buy $100 worth of Magic or Pokemon cards and get a free playmat.

Black Friday 2015 was bigger than our the three previous Black Fridays combined.

It was even better than that, actually, because almost no store credit was used.  Only about 4% of payments taken were in Itchy & Scratchy Money.  Store credit redemption varies, on heavy tournament days it can be as much as 25%-30% of all payments taken.  Not the greatest for cash flow, but it means we got the value ahead of time so I'm okay with it.  However, as this year as churned on, we've seen the store credit percentage steadily decay, and our outstanding store credit pool steadily empty, while buys have remained frequent.  Too damned frequent in some cases.  What this tells me is that we've hit a sweet spot for offer amounts.  High enough to attract sellers, but low enough to be advantageous to the store.  If we don't overpay on store credit, it doesn't build up.  Now I'm free to reexplore the tournament payout math to optimize further.

While we did see traffic in normal goods, the sales were spectacular hits by any measurement.  We rejoiced at the amount of deep stock board games and trade paperbacks we saw being bought.  By late Friday afternoon we had run out of empty boxes to give people to help them carry out their giant stacks of board games.  Comics moved.  Toys moved.  Youth products moved.  About a dozen people took the playmat deal, in most cases bumping up a $70-$80 singles buy to reach the century mark and earn multiball, which is exactly what offer #3 was intended to do.

In short, it was like we had hoped to be all along -- our store, once little more than a TCG bowling alley, was performing like a bona-fide genuine authentic fair-and-square retail establishment.  And for once, Patrick and I were able to stand back and survey the commerce with satisfied nods, reveling in the beauty of it all.

Note that I offered no discounts on Magic: the Gathering cards.  Just because it's Black Friday doesn't mean the bank is selling $20 bills for $10, as another store owner wisely observed.  I don't criticize the stores that did some stock thinning and cashing in some chips by offering singles specials and booster box incentives on the less-valuable expansions.  It's a holiday weekend and people want to spend; you have to sell what you've got.  Some of the MTG sales I saw around social media, though, were sheer lunacy.  Boxes of any in-print product at $75?  Clearly distress selling, a Hail Mary to meet rent by Tuesday.  I don't know if the Great Magic Shakeout of 2016 is going to start early, but the canary in our particular coal mine ain't breathing so smoothly right now, I'll put it that way.  There are an awful lot of stores opening lately with three cases full of singles and thirty banquet tables, and little else of consequence on the premises.  They had better hope Oath of the Gatewatch is better than its predecessor.

Small Business Saturday didn't set any records, but was on par with solid Saturdays not coinciding with a new Magic release.  Plenty of American Express cards came out of wallets to do their thing, and that's what the promotion is all about so I accept that with aplomb.  Sunday pulled its weight and kept the stock thinning going, which is all I needed it to do.  Despite stocking moderately heavy compared to recent sales, we almost ran out of Cards Against Humanity.

Later this week DSG will be appearing at the Phoenix Comicon Fan Fest at the Cardinals Stadium in Glendale.  I'm definitely looking forward to having two stores for a weekend, especially with early December being the single deepest trough in annual sales on a consistent basis.  Then around the ninth or tenth of the month, the switch flips "on" and shopping season begins in earnest.  Nothing would delight me more than to take part in that merriment... as a retailer.

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