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Tuesday, April 17, 2018

Convention-al Wisdom

It's about time for convention season again, and I'm seriously unsure whether or how much we want to participate moving forward.  I mostly pulled the plug on this business component after last year's Phoenix Comicon debacle, but opportunity continues to knock at our door.

Three years ago conventions were like free money for us.  The cost to deploy, staff, and depart, plus venue fees, was within the range where there was still plenty of meat on the bone after selling our stuff.  But in 2016 and 2017 we mostly saw that get worse.  Phoenix Comic Con (or Comic Fest, or whatever they have to call it now because of the San Diego Comicon trademark ruling) kept pushing table fees up into unsustainable territory.  PCF's sister show, Fan Fest, wasn't cheaper enough to account for the lower level of attendance we saw, which was reflected in lower sales.  And last year's PCC was a disaster due to the threat incident.  We ended up passing on Fan Fest entirely.

This year we were offered a chance to participate extensively in PCF as they rebuild the show in the wake of 2017's trouble.  Unfortunately, we didn't see it as economically feasible in the short term, and our long game right now is focused on maximizing our one mega-location.

We were given a second option to be present at PCF 2018 and vend our booth in a different part of the convention at a lower cost up front, a chance to cooperate with a longtime competitor for mutual benefit and maybe build some more positive history into that relationship.  We're still working out the details for that, as of this writing.

But mostly, the large comic conventions are getting to a point where we would need to have a specific, tailored, home-produced asset of some sort to feature, in order to cut through the noise and leave a lasting impression, and most of all to make money.  There's so much saturation and so much shovelware merch that even our eclectic curated offering doesn't quite cut the mustard.  So options like Salt Lake Comic Con are just not really on our itinerary at this stage.  Those shows don't really need yet another table full of Funko POPs and Pokemon booster packs.

Smaller festivals are much better on the base economics and staffing time needed, though sales are a greater gamble based on footfall.  Six years ago, Wes Cleveland and a group of arcade enthusiasts started Zapcon as an annual April convention, which I've enjoyed as an attendee multiple times.  In 2017, Wes opened up vendor offerings beyond the arcade collecting category, and I jumped at the chance to take part.  DSG's booth performed reasonably well and most of all we were in front of a more focused audience, so outreach actually had some traction.  At PPC we were just one more tchotchke dealer, but at Zapcon we were the main vendor of pop culture and tabletop goods, in addition to video game licensed merch and actual video games themselves.  We return to Zapcon this coming weekend for the 2018 installment and I am excited.


There's another medium-scale local convention in the video game space, console expert John Lester's Game On Expo in August.  It's fundamentally a good show.  Two years ago it didn't go well for us as their tabletop offering had some logistical problems and we couldn't exactly pivot to video games because 80% of the dealers in the room were highly focused there.  This may be a situation where we can participate again once we figure out the right mix of product, programming, and presentation.

We have a few microvending options, including a great local theater chain that lets us run a pop-up shop in their lobby when a major comic book or video game movie opens.  For them it just adds to the party and is a marketing tool.  For me, low venue fees and bounded hours of operation mean that my main cost exposure is low, and my worst case scenario is akin to handing out flyers at a sidewalk art festival.  I also get plenty of contact from area schools and churches asking if we'd like to vend.  It would be great to scale up offsite operations to the point where it makes sense to have a staff that works on that specifically.

That ties into the X-factor, which is: I will not be running the booth.  As an autistic person I find it tremendously difficult and exhausting to do that kind of work, meeting people in an endless chaos and retailing on the fly.  Some people thrive on that.  Not me.  Yes, in a moment of need I can step in, but it's foolish to put myself in that position in advance when other staff are going to do better at it... once I've developed personnel to that purpose, which means scaling to that level.  I've been fortunate to have one particular manager who is great at this work, but he's about to relocate for his day job and I won't be able to feature him in this role after that.

I'll look back on this article at the end of the year.  I wonder how things will unfold.  DSG can reach an audience in this channel, but I'm not going to do it in a half-assed manner if the same amount of time and resources spent in the main storefront will provide a better ROI.

Tuesday, April 10, 2018

Push Decay

Basic supply and demand tells us that there is a "sweet spot" for price at which it's low enough that the product meets its needed turn rate, but high enough that it's worth it for the seller to stock the item at all.  For a lot of merchandise, this "sweet spot" has an uncanny knack for converging with the market price of the item.  In the case of aftermarket (used) goods, it's typically exactly the market price of the item, to the extent that there's enough information symmetry that both buyer and seller know what that value is.

What many don't know is that the "sweet spot" depends on initiative, so to speak.  It's the market rate at which, offered and open, an acceptable number of people will answer "yes" and make the buy.  The sweet spot for a seller who is at leisure to wait is higher; they are content to get their price from the 5th or 10th or whatever buyer, who perhaps seizes upon convenience or needs the item faster or what have you.  Or else the seller is willing to let the two or three people underneath him on eBay sell their copies first, and then if no more of the item are posted for sale, he will be the lowest available price without having to make less than he wanted for the sale.  So clearly the seller who is operationally at leisure to defer the sale until later has the advantage.  The sweet spot for a seller who needs the item gone faster is lower.  The sweet spot for a seller who is going out of business and needs everything gone is low indeed, it's however low it takes to induce even an unwilling buyer to act.

In the case of durable goods, prices won't move much no matter what else is going on.  That Trane 4-ton HVAC system is going to cost you seven grand pretty much no matter what you do.  They don't need to sell it for less, because anyone who needs one is going to be motivated to shop on factors other than price, such as availability, reliability, and longevity.  If you need a cheaper air conditioner, there are off brands that Trane doesn't bother competing with.  The market for decent air conditioners is incredibly robust, it's an appliance people depend on and use heavily every day.  For these and other reasons, that price is basically firm.

In the case of indulgent luxury goods like, you know, tabletop games and collectibles, especially on the "ornaments" side of the business like artwork, statues, shelf decor, and so on, a seller trying to clear merch quickly often has to reduce the price a lot.  (And don't let yourself be led on that collectibles are robust investments.  They're not.  They're entertainment, and if you get anything out of them other than that, it's frosting on the cake, not a certainty, no matter what the clickbait tells you.)

This high degree of price volatility as a coefficient of turn rate is something that yours truly, an economic layperson, is dubbing "Push Decay."  I'm sure there's some real term for it that explains just how severe it gets the less of a staple good you're pushing.  But when you learn this concept as "push decay," it paints the exact picture of what happens to the goods when you do that thing.

The harder you have to push that merch out the door, the greater its value decays.

Now, the more staple or demanded a good is, the less push decay you'll observe.  This can even happen for indulgence goods.  The reason behind that, of course, is that once your price creeps down sufficiently far below the sweet spot, other dealers will buy you out.  Price memory can be a sticky thing and sellers don't want people thinking of good resilient brands as being low-value, so they'll buy your 15% off iPhone and flip it on a narrow margin at 95%, rather than reducing the price of all their own stock to match the new floor you've de facto proposed, whether you meant to or not.

Conversely, take an item that's almost pure fluff, especially one whose fifteen minutes are over, and especially one that's strictly ornamental... and look out below.  For example, I am overstocked at the moment on BoJack Horseman Funko POP figures.  BoJack is an excellent show, but it has already passed its mainstream popularity peak, and Funko's extremely odd knick-knack figures of the characters from that show appeal to a very narrow (and now diminishing) audience.  At full price, I get an occasional sale of BoJack himself, but no other characters.  At 20% to 25% off, there might be no change in movement.  At buy-one-get-one-free, they'll probably run out in an orderly fashion.  If I knock them down 75% and actually get the word out about it, they'll be gone in an hour.  Another dealer will come buy me out even if no collectors do.  A dealer whose branding is "we have ALL the POPs" will get a different benefit out of having those BoJack figures on the shelves, whereas DSG features POPs purely as a pop-culture garnish and not a central part of our product mix.  That dealer's bread and butter is POP figures and he won't want me getting people used to the idea that POPs ought to be 75% off, ever.

So it stands to reason that I don't really want to hold sales in general, which is consistent with advice I have been giving here in the past.  And in the event that I do put merchandise on sale, I want to figure out the point at which the sale will consummate reasonably quickly, but I won't lose too much value to push decay.

Over the weekend (and continuing until I feel like ending it), we ran a Spring Cleaning sale of a handful of things we just wanted off the shelves and turned back into money:

Apparel, which we're throwing in the towel on for now -- everyone says they'll shop quirky nerd t-shirts, but clothing is available very cheaply from a litany of other sources and unless we make a deep foray into it, we won't be competitive.  (And perhaps not even then.)

Funko POPs, as described above... sometimes it's just time to churn that stuff through.

We had a crate full of surplus playmats from various sources and it was time to convert those.

Finally, we got wind that a full-line restock of X-Wing was coming our way this summer, and that timing worked for some of our internal inventory-building goals, so we took this opportunity to empty the fridge and deep-clean the interior in anticipation of that.

The discount levels I offered in the sale reflected the amount of push decay we were willing to tolerate for each product subset.  For the shirts and playmats, not too worried -- deep discounts, come what may.  The Funko POPs went to half off, which is enough to move them with a bit of speed but won't ruin the punchbowl.  And X-Wing is 20% off, which we wouldn't have changed even if the MAP restriction had allowed it; we don't want to push the stuff into a lake, we just wanted to ensure it would attrit away in time for the reload wave.  Low discount, minimal push decay.

A final note on the concept of push decay is that a hobby game or comic store that is closing involuntarily or unexpectedly is in such a bad position in terms of being able to wait to get its price that the expectation should be well below wholesale prices on all the remaindered merch.  Anything with robust market value will sell for at least that much, but the back catalog is going to be in a deeply devalued state until a dispositive outcome occurs.

I've been approached by closing stores asking if I want mid-list merch for wholesale and it's like, buddy, sorry to have to tell you this, but if I wanted the mid-list stuff at wholesale, I'd just order it from a distributor.  Half the time there's one distributor or another offering that stuff on incentive, too.  And the purchase would help us maintain or increase our distribution volume tier.

When Critical Threat Comics closed and we were unable to acquire it outright last spring, the closing auction was a bloodbath on everything store-centric, but they got pretty decent money on the merch because ordinary members of the public were invited and they didn't have wholesale access otherwise.  Inviting the public seems like a great way to go about a liquidation auction, except that the store is way better off having a closing sale and getting those "better" prices sooner.  At that point the goal is merely to slow the push decay.  There is no stopping it, because the business body is already dead.

Tuesday, April 3, 2018

Why We Do Pre-Orders The Way We Do

The new shiny is even newer and shinier when it's not here yet.  I assure you, I know this anticipation very well.  I cannot think of a product in recent memory that I am as eager to purchase as the forthcoming Ori and the Will of the Wisps for the Xbox One.  My entire family is looking forward to playing.  From nothing but a teaser and our deep enjoyment of the original, Ori and the Blind Forest, we are completely in the tank for this new game and will pay whatever plausible price it may cost, and as soon as we're allowed to do so.

The mechanism for placing mass-media pre-orders like this, especially now in the digital age, is as seamless and frictionless as the deployment channel can make it.  I recently pre-ordered Star Wars: The Last Jedi from the iTunes store, for example.  The movie was nicely locked in for an automatic download at midnight Eastern the day of release, whereupon it magically appeared on my AppleTV and my children watched it.  I was out of town at the time, it was that seamless, we didn't have to do anything, it Just Worked.  Any time I am logged into the iTunes store, I can see my pre-orders on my dashboard, and I can modify or cancel them by pressing buttons.  (I don't typically cancel pre-orders of physical goods on principle, but I'll cancel a digital pre-order if I absolutely don't want the thing anymore, since it's near-zero impact to do so.)  I paid this time with store credit (gift card balance) but if it were a direct purchase they'd just ding my VISA as soon as the title went live.  It's tough to imagine it being any easier.

Here in the world of brick-and-mortar small specialty retail stores, our mechanism isn't quite that polished or quite that frictionless.  But it has come a long, long way since DSG opened in 2012, and an eon further than it was when I had earlier stores in place.

People often ask why I do pre-orders the way I do: why I take payment in full up front or there's no pre-order, why the pre-order opens when it does, why we deliver in the manner we do, and so on.  Fair questions all, since these processes are not common to all stores like mine.  Indeed, a mere five miles north of me is a store that has such a vastly different policy they may as well not be engaging in the same kind of transaction.

This is an instance in which our point-of-sale software, Crystal Commerce, actually shines.  From the customer-facing side, a pre-ordered product is clearly marked as such throughout the ordering process (online or in-store) and they will see the release date we entered for the item.  Once the purchase comes in, it resides in a special Preorders tab where we can reference those invoices at any time.  The day before release, we print up all the invoices in that tab, since they will automatically move to the regular orders ledger on that appropriate day.  The customer arrives, shows ID, signs the invoice, and takes their stuff.  (Their original receipt from when they bought it is their for-keeps receipt.)

That's the mechanical explanation.  Every part of the pre-order process has a policy explanation too.

Due to the rules in place from Square and PayPal, we can't take a credit card payment for an item that's more than 30 days before release.  Sometimes for especially anticipated merch, we'll open pre-orders earlier than that on a cash-or-store-credit-only basis, but usually we don't.  I'm not a fan of telling someone their money's no good here, even if it amounts to parsing payment types.  So for practical purposes we start taking money for high-profile stuff a month before the announced street date.  There are some publishers, Fantasy Flight Games I'm looking at you, who let us get a lot closer to release before finally locking that date in, while their devoted player base is champing at the bit to pre-order right on announcement.  I really don't like making them wait.  But once the floodgates open, those players are happy.

You might ask, but why take payment up front at all?  Isn't "No Money Down" an attractive marketing pitch?  Do you need the money first that badly that you can't buy the product otherwise?

The reality is, we're not yet at scale where it makes sense to take no-money-down pre-orders, even though we're well past the scale where the pre-order is absolutely necessary for us to buy the product.

For a very small store on all but the most obvious of core products, a pre-order might be the only way that a given item even gets ordered at all.  This is more likely to happen on board games or miniatures core games, because a TCG booster box was likely going to get stocked even at the smallest of stores.  If I had a 1200-square-foot microboutique focused on card games and video games, the only way a new release like Pandemic: The Clap gets ordered at all is if I have a pre-order in advance for it.  In practice, at DSG's size and scale, we order basically all TCG releases, most major-publisher board game releases, and most Warhammer model or accessory offerings.  So that stuff was coming in anyway.  Pre-orders only help us decide how much of it to buy.

So why take money at all?  Well, there is still substantial hedging.  If a product gets really hot on hype and we take a pile of "request only" pre-orders that have no payment and are thus not really binding in any way, as soon as the hype cools down, a lot of customers might not ever be back to pick up that pre-order, so we may have gone behind the slingshot for 70, 80, maybe 100 units that now suddenly won't sell.  Or there turns out to be some ridiculous Amazon rebate offer or something and they just buy it that way and forget about the pre-order they "placed" with us.  Given enough scale to where we'd be expecting to sell through that volume anyway, it might not be a problem.  For the time being, the only things we sell through at that scale are Magic releases, and the market expectation on those is pre-paid pre-orders anyway.

A casual pre-order for a copy of a board game that we'd have ordered two or three units anyway, and grows our pre-order to four units?  That would not be a concern for us in terms of taking money up front.  I would not be worried in the slightest about that buyer no-showing and being stuck with a whopping one surplus copy of a $40-$50 retail box on the shelf.  In such a case the main reason we take payment with their pre-order is because we're already using that process for everything else.

How do we price pre-orders?  For white-hot unobtainium, we'll typically be at MSRP when the market price is somewhat higher.  It's not a hard-and-fast rule, but in an expected scarcity situation, we're able to achieve normal margin and make a customer happy that they didn't have to fight all of Craigslist to get theirs at who knows what price.  Typically if we're at a market-based price on a pre-order, the underlying reason is we know in advance that we can only get some tiny number of units from allocation.  From the Vaults sets for Magic were often like this.  The reality is, if we're going to sell out almost instantly, it's irresponsible of us not to build in some sort of premium.  Often we'll come in over MSRP but under market price, so that our local players are better off buying from us than online.  If we stay at MSRP on those types of products, it incentivizes the backpack flippers to stake a bunch of scarecrows to buy us out so they can resell, and then our local players still miss out.

For products that are going to be popular and sold ever after at MSRP, we tend to offer a modest discount purely for the "we appreciate you committing to this purchase with us" factor.  For products we expect to be discounted, it's case-by-case.  Magic's "Masters 25," a product that ended up a little shallower than expected in customer demand, we knew where we wanted to be on everyday price and stock level moving forward, and the pre-order was far enough below that to present an attractive option to local buyers.  We didn't worry about fighting the entire internet to make a nickel over wholesale.  We're better off just missing the sale than trying to line up with the likes of Massdrop.  Those same inventory dollars can be devoted to other things instead.

We sometimes offer pre-orders on eBay.  This usually happens when we want to make some purchasing increment and be sure we're going to get it.  For example, Game X gets $4 cheaper per unit if we order at least 100 count, or we're trying to advance to a higher purchasing tier with distribution (this just happened because the quarter ended on Saturday) so we want to pack an extra couple thousand dollars onto that week's orders.  But mostly I don't like taking pre-orders in general on eBay.  The only operands of competition are price and, to a FAR lesser extent, our high feedback rating making us appear as an attractive low-risk source to buyers.  That's not a lot of basis to compete.

There are also far more cancellations of pre-orders on eBay, which is a huge inconvenience for us and is something we can't stop.  We have not delivered the goods so we must permit the cancel and refund the buyer, and thus we do.  Anyone who cancels an order on eBay gets added to our blocked list.  It's nothing personal, just filtering for the customer tendencies we want to cater to, which is those people who don't, for whatever reason, ever bother to cancel pre-orders.  We are at liberty to do this without missing out on sales volume because eBay is such an enormous overall buyer population, and we prioritize our local clientele first and foremost anyway.  Every time I finish a pre-order fulfillment cycle on eBay, I tell myself I'm not going to bother with the hassle and the fees and so on in the future, but it's such easy money that I can't stop dipping back into that well.

TCGPlayer offers pre-order capability natively in their system, but I cannot take full advantage because it doesn't work the same way for Crystal Commerce "sync" accounts.  If the "sync" system changes in the future or if I end up moving to TCG Pro or another front-end, then I'll probably end up offering pre-orders through that channel, but it's going to end up being 1:1 with the regular price of the item because mechanically it's cumbersome to make it work any other way.  It's probably still worth doing.  If you list your singles early enough, TCG Direct themselves buys them from you in order to fulfill Direct orders.  It's not a high-margin play but the volume is tough to beat.

Well, there it is.  Concepts, mechanics, policies, and connections, all the juicy details on why we do pre-orders the way we do.  I hope this has been informative, and hey, if you're a customer reading this, please feel welcome to pre-order all your Magic the Gathering: Dominaria goodies today, in-store or on our website at www.desertskygames.com!  Have a great week!

Tuesday, March 27, 2018

Category Killer Killed By Category

Last week while I was at the 2018 GAMA Trade Show, Toys R Us announced what we all knew was coming before much longer: the imminent closure of all their stores.  Just like that, another fixture of 1990s category-killer big box retail is gone, and once again Lewis and Dart were right in their Rules of Retail about the way the trend winds are a-blowin'.
Toys R Us, the ubiquitous TRU, is in the midst of a live postmortem even as its corpus expires.  Yes, we all know Bain Capital basically eviscerated them with debt and that's some garbage shenanigans right there.  But that's what happens when you let financiers have enough political pull to exploit holes in the system.  I contend that TRU was a dead store walking even if that had not happened, and indeed, it was flawed in ways that made the leveraged move possible to begin with.

I contend that a non-trivial part of what killed TRU was the internet.  Not e-commerce sales as such, but the hyperacceleration of hobby-grade collecting made possible by the communication magnum leap that the internet made possible.  A formerly well-rounded market for toys got split into white-hot unobtainium and dead-on-arrival bulk.  When this happened, a big-box mass-market process-mastered retail giant was nowhere near in position to pivot.  Too much of their asset base turned toxic overnight, and their processes ensured that it would continue to reload toxic for years.

Picture this.  It's the mid-1990s.  Kenner brings back the Star Wars action figure scene with the "Power of the Force 2" figures, and they quickly explode into a litany of shortpacks, variants, and every such thing.  In the days that were, a few dedicated collectors had the leisure to treasure-hunt stores for the special figures, and nobody else cared.  Meanwhile, mainstream buyers just wanted commons like Luke and Vader.  In the Usenet groups like alt.toys.collecting, it was a different story.  Coordinated groups pored over case assortment data and shipping schedules.  TRU, Target, and Wal-Mart became late-night and early-morning buying spots for nascent flippers chasing after that one-per-case from the latest wave, or the special chain exclusive.  And eBay already existed, so things proceeded as you might think.  Ultimately large batches of stock became deadwood, and TRU lacked sufficient, uh, nimbility to do anything but dump skids via reclamation channels, earning dimes to the dollar.

After POTF2, there were Beanie Babies.  Oh, lord, were there Beanie Babies.  Tickle-Me Elmo.  Furby.  Pokemon cards (hey now).  Skip forward across years of hot figurines and video games and you get to last year's Fingerlings and Hatchimals.  Nintendo Amiibo figures were emblematic of the market shift: ultra-demanded rare figures interspersed with cartons and cartons of bulk commons.  It doesn't scale.  By definition it's an attempt to move product in the market in a way that defies scalability and efficiency.  That's what makes the toy desired.  And it's exactly what TRU was not built to handle.

This led into the modern secondary market where everyone is a flipper and Craigslist is our cesspool. Where pickers scour garage sales for the brands they know they can rip off the host the most on.  Where nobody can just enjoy anything anymore, there's always an angle.  Captain Sternn would be delighted, were he still alive.

I'm not suggesting that a bunch of half-circle glove Boba Fetts brought down a Fortune 500 company.  I'm saying that there was a tectonic shift in the nature of entertainment merchandise and collectible merchandise, and that part of the Venn diagram where they overlap, crushed TRU between its mighty plates.  No grocer could survive if 90% of its milk and produce spoiled before purchase, because people only wanted the variant milk and limited-edition bananas.  At MSRP, natch.

Tuesday, March 20, 2018

The High Sierras and the 2018 GAMA Trade Show

Last March at the GAMA Trade Show's final (for now) Las Vegas installment, I observed:
Reno and the Peppermill [Hotel] will be tested in earnest next March.  If that test amounts to "be better than Bally's," Reno will probably do okay.
I spent last week at the 2018 Edition of the GAMA Trade Show and I can say with confidence that the risky play of moving the show to the Reno-Tahoe locale paid off.  Here, then, in the spirit of last year's article, are my reflections on this year's Show!

Reno
Rather than a four-hour drive from Chandler to Las Vegas, I got to enjoy a two-hour flight from PHX to RNO, which took a total of almost seven hours thanks to security and flight delays on the way out -- which made it all the more impressive that I flew back on time out of a veritable blizzard.  Reno, which is actually located farther west than Los Angeles, sits at altitude, nestled against the Sierra Nevada mountain range.  Reno was cold.  I stepped out of the airport to the shuttle curb in sub-freezing temperatures and wondered what lunacy had befallen me.  After all, March in Las Vegas is spectacular, with the Mojave Desert spring offering sunny skies and poolside temps.  Fortunately, upon arrival at the hotel, I found a comfortable room that heated quickly and efficiently to 76 degrees, the way I like it.

SWOT
Once again I joined John Stephens from Total Escape Games in Colorado to present the director's cut of our seminar from 2017, SWOT Analysis, or as originally conceived, "Competing in Crowded Markets."  (See photo above).  Rather than giving a man a fish, we opted to teach a man to fish, and by man we mean all retailers, and by fish we mean how to use the SWOT analysis tool specifically.  Strategic business decisions, steering the entire barge, tend to incur great costs and cause great disruptions.  They had better be worth the payoff.  How can we know what we're doing, how we're going to do it, and whether it ought to be done at all?  The SWOT analysis can help.

Lightseekers
There's a nigh-insurmountable barrier to entry for new trading card games in the market, and this is the first one I've seen lately that seems primed to clear it.  A retailer group I network with had a chance to meet with the publisher's exhibition team for a closer look at the game, which seems like Hearthstone but without the frustration.  Most importantly, it's fun.  The asymmetric game engine is clearly designed with smartphone play in mind, but the tabletop version of the game offers perks of its own: a low price of entry, great-looking foil premium cards, and scannable codes on every card to allow players to import their physical cards into their digital collection.  Once we've knocked out some higher-profile releases in our existing lines, DSG is going to buy in.

Changing of the Guard
GAMA Retail Division board members Paul Butler (Games & Stuff, Baltimore), Steve Ellis (Rainy Day Games, Aloha, OR), and Travis Severance (Millennium Games, Rochester) all finished their terms and opted not to run for reelection.  They have been on the board for all four years I have been going to GAMA.  My store was open for three GAMAs before that, but I didn't go, I wasn't involved in direct operational management for the first couple of years and was just making the transition in the third.  These gentlemen leave behind them a different landscape, one in which the professional side of the retailer ranks can have productive, beneficial, and healthy personal relationships with the professional side of the publisher pool.  We are all in their debt for this great thing they've built.  Replacing them on the board are Jennifer Ward (Crazy Squirrel Game Store, Fresno), John Coviello (Little Shop of Magic, Las Vegas) and Dave Salisbury (Fan Boy Three, Manchester, UK).  Dawn Studebaker (The Game Annex, Indiana) is now our GRD Chair.  Congratulations all!

The Peppermill Hotel and Casino
It may be in a colder clime and located nowhere near the rest of Reno's tourism establishment, but the Peppermill is absurdly better than Bally's as a host hotel for this event.  Room rates were better.  Amenities were better.  Show space was better.  About the closest thing I had to a complaint on that count was that the seminar rooms required traversing a twisty set of hallways from the main hall and meal area, or else a quick dip to the casino floor to "go underneath" and reach them that way.  But honestly, come on.  Free fast wi-fi.  Glorious bathrooms.  Large, comfortable beds.  Free bottled water.  Great restaurants in every corner of the place.  A sweet arcade (see below).  And plenty of capacity for the Trade Show.  This place is a winner.  I will caveat that I upgraded to the Tuscany Tower and I am informed the two other towers weren't quite as comfortable.

Miniatures
Star Wars Legion, or "May the 40K Be With You," is expected to be the dominant game in the category for at least a few months.  Ultimately players will come back to Warhammer.  They may linger after Legion with this summer's Song of Fire and Ice miniatures game, which looked excellent at the show.  Knowing so clearly what is coming, and being deeply in sync with other retailers' assessments of how it's going to play out, should result in me having a chance to plan our way through this on a called shot and cause little in the way of waste or loss.  We shall see.

Black Tar Heroin
I went a long stretch without any beverages other than water or coffee, and a couple days in I hit the weary point and needed to indulge my one vice, a non-carbonated energy drink that I use as a bariatric-friendly boost.  Naturally, the hotel gift/snack shop didn't carry it.  I braved chill rain to locate a 7-11 just south of the casino and lo and behold, there it was.  On my way back, a homeless couple asked if I would buy their Magic cards.  They had "all kinds of cards, mythics and rares and everything!"  Not even making that up.  I was afraid I was gonna get stabbed, so I apologized that I left my bankroll back home in Phoenix.

Syncing with TCGPlayer
Last year the big news was TCGPlayer Pro, a standalone means of running TCG sales through a web interface, but not ultimately a true point-of-sale system.  TCGPlayer announced they would allow front-end apps, and sure enough, this time around we got to see what that was going to look like.  IMP POS, now ION Retail, is going to have a full sync front-end for TCG.  Fulcrum, a POS that comes from the video game side of the trade and has a timed exclusive on Pricecharting API data, is also going to sync with TCG.  And oh, by the way, Crystal Commerce, the only existing sync POS for TCG, is getting the rest of its sync... hopefully before too long... with every other product in the catalog becoming accessible to that channel.  Whatever particular preference a given store has, the bottom line is that everyone's options got better this year.

Barnyard Follies
Wizards of the Coast continues to shrink their GAMA presence, which is a baffling move from my point of view, but I suppose if they think they don't have to do more, they aren't going to do more.  Their two-hour workshop presentation this year truly astounded me.  The store they chose to showcase as their exemplar?  The Gaming Goat in Bourbonnais, Illinois.  I am not even making that up.  In a world where the Goat is held up as the archetype to emulate, I have to question whether this publisher has bought into the notion that its key product is "worthless cardboard," as Goat founder Jeff Bergren so disingenuously asserted under oath.  Wizards of the Coast is a leader in this market.  They have some initiatives underway that I hope will push things in a better direction.  Meanwhile, I'm afraid my fellow retailers did not behave well in the presentation.  I'm embarrassed at this on behalf of those of us who weren't here to rabble rabble pitchforks.  I guess this was the first GAMA after a pronounced downturn in Magic, and stores who never experienced an existential crisis before were out for blood.

Eevee = Expected Value
I have written recently about Pokemon's veritable collapse in my store, where booster packs (and only booster packs) have any traction anymore.  Pokemon seems to be bigger elsewhere, to the point where we had neophyte retailers scouring the hotel looking for gaming tables and asking who had Poke-cards to trade.  I don't think those folks understand the purpose of the show, but we all do silly things our first time in attendance.  My first year, I brought Commander decks and spent a total of perhaps two hours all week playing them... against the guy who I shared the hotel room with.  Good thing I didn't network or anything.  I'd hate to have spent that time learning anything.

Arcade Lab
The Peppermill has a video arcade on its third floor, and I was surprised at how decent it was!  Most of the floor space was given over to kiddie casino ticket crap, which is to be expected these days, in particular at an arcade inside an adult casino.  But in that final third we found some pleasant surprises!  A half-dozen brand new pinball tables, a dozen or so vintage games in reasonable shape, and a Star Wars Battlepod, which I had been meaning to try!  Paul Simer and I needed a break from the show grind and took the opportunity to indulge.

The Enemy of My Enemy is My Friend
None of the stores in town that are or purport to be "rivals" of mine made the trip to GAMA.  Only four other Arizona retailers I know of were there, and all four were friendlies.  I learned all kinds of things about the "rivals," though.  Dollar for dollar, nothing you can spend to disrupt someone else's operations is going to be as effective as that same amount spent making your own business better.  Nowhere has that been clearer than in the seismic shift of the local landscape resulting from our move to bigger and better-situated digs.  At GAMA, I made a point of simply making as many friends as possible and seeing where I could make another retailer's day better.  (Or publisher's day, or distributor's day, you get the picture.)  My reward was an unexpected bounty of great intelligence regarding those "rivals," as it happened.  More than I'd ever have gotten sending smurfs to their premises to turn over rocks and report back.

Accessories
I have a near-infinite appetite for accessory products, but this week's budget was devoted mainly to Masters 25.  I had to pass up the show special from Norse Foundry; I'll come back to them in a month or two and buy four grand worth of rock and metal dice.  Ultra-Pro showed off new Eclipse configurations and versions and they looked outstanding, those will arrive in the normal course of distribution.  No Adventure Scents this time, I'm sorry to report.  I still think those would have been cool.  Nobody agrees with me.

The Clap
A common meme among the player base is to call bad things or people or undesirable outcomes "cancer" or "AIDS" in slang.  That's a bit of a tough pill to swallow when people we care about fall victim to such ailments.  I've lost a lot of family to cancer and compared to many people I've gotten off easy on that count.  AIDS is as unpleasant as it comes and you'll never use it as slang again once you've met someone wasting away from it.  But we still needed some sort of word or term for when we have to name something as being just repulsively, disease-infestingly bad.  Fortunately, Gonorrhea stepped up and took on the job.  And if we ever get tired of using gonorrhea's completely convenient urban shorthand, there are always Syphilis and Chlamydia waiting in the arsenal.

Board Games
Asmodee North America, the 900-pound gorilla of this category, made a big impact with its own take on the Games Workshop stockist program on Tuesday, as recounted in last week's article here.  IELLO had probably the most impressive preview offering content-wise.  I saw great material from Steve Jackson and Renegade, and I know I'm probably leaving someone out.  In fact, I've mentioned lately that board games are performing for me now that we're in Chandler, and I suspect I may just be rolling with the tide on that, with the quality increasing almost as quickly as the quantity has been.  I am going to keep developing this category for as long as I keep seeing these kinds of results.

Networking
Last year I called out the Retailer Lounge as the high-EV play for networking, but this time the Lounge was tucked away in a place where retailers weren't spending a ton of time, so we kind of just rolled with it and found ways to visit with one another.  I had a couple of meaningful conferences just sitting in chairs in the hallways.  The Peppermill actually had such seating, where at Bally's, any time you needed a quiet corner to confer in, God help you.  GAMA offers something like six ticketed meals and over the course of the week you're going to eat like 15 more.  The eateries at the hotel were all excellent, and though not cheap, they were reasonable.  That's over 20 chances to meet with your professional kine from one tier or another and Become Better.  Don't pass them up.  And if you can manage not to burn out from all the day's exertions, the evenings become a glorious chance to revel with your people.  I was visiting until like three in the morning on a couple of nights.

Video Games In Absentia
I can't speak for Paul Simer, except during the times he was with me, but I was asked frequently and repeatedly for guidance on getting into video games.  Last year Paul and I presented a seminar on that topic, but this year it didn't make the final schedule.  The seminar itinerary was awesome so I can't fault them for anything they had on there instead.  We took a humor photo from an empty retailer lounge one night for Facebook so we could claim nobody showed up for our special video game tutorial.  But the reality was that I was presenting some part of that seminar at least once or twice every day, paying it forward to attendees who found themselves with me with time to kill and questions they were able to articulate.  I don't think video games are a good fit for every tabletop store, but I do think there are many tabletop stores out there that would get better by adding them.

Uber
Believe it or not, I had never taken an Uber ride until the one I shared with Paul to the airport on the last day.  My impression of it?  The taxicab industry is doomed.

We Shall Always Remember the Night
I wore my Ori and the Will of the Wisps shirt, which I was given from a Moon Studios social media drawing, to the second exhibition hall day at the Show, and I actually got spotted by one of the best Ori and the Blind Forest speedrunners in the community!  We swapped experiences and our mutual anticipation of Wisps, which we all hope might be released before 2018 is out.  He even gave me a challenge coin from the ongoing All Skills tournament, and wouldn't let me pay him anything for it.  As if that wasn't enough, I ran into another gentleman from distribution and got to share the fandom with him as well.  It totally made my day, there was no way I expected to share the joy of Ori with others at this particular event, where video games are an afterthought and Ori is a tiny niche within them.  If you haven't experienced Ori for yourself, you're missing out.  I've said before I think it's the best video game in a generation and now that the community has spent another million hours or so exploring its greatest depths and brightest heights, I contend that time will mark it among the best video games ever made, period.

Other Hybrid Theories
Stephen Smith (Big Easy Comics, Louisiana) presented this year's Hybrid Theory seminar, assuming we're retroactively branding last year's video game seminar as the first in the series, the way the Zendikar Expeditions were retconned as the first Masterpieces.  Steve talked comics, and it's a topic he knows very well.  Comics are not for dabblers or those who are resource-starved.  I won't reprise his talk here but suffice it to say anyone interested in entering the category got crucial information if they attended.  Next year's Hybrid Theory, I am told, will focus on another category entirely and I am excited to see what it is, from among the topics being floated in discussions at the show.

#RPMeToo
There has been some controversy with some of the content included in the Free RPG Day product kit both this year and last, where a publisher whose signal I won't be boosting here saw fit to include material that, some argue, crossed the social line between being risqué and abusive.  I run a family-friendly store and I don't want to pitch my flag with harder-edged adult content, though I acknowledge that demand for such content is going to be right for some stores to fulfill.  A countercampaign called #RPMeToo has begun and I do plan to participate in that.  This should not signal an intention for DSG to become political, but rather the reality that our market for RPGs is small and can be socially unapproachable, and this is a problem area where we need to improve at all levels of the industry.  In terms of new RPG offerings, both Overlight and Dungeon Abbey look promising.  The latter is exactly what it sounds like: a D&D/Downton mash-up.  Shut up and take my money.

Snowstorm
I bet that never happened after the show ended in Las Vegas.  Reno's snow fell light, fluffy, and exquisite.  I am at luxury to say that because I don't spend four months out of every year shoveling exquisiteness out of my driveway.  My flight was unaffected by the voluminous winter storm, but I know some others weren't as lucky.  I yearn for the day when I can roll right into a winter vacation from the show, or leading into it.  Just gotta grow the store to that scale, or else finish writing that million-dollar screenplay.  You know, either way.

Net Income
This is the only thing on the setlist repeating exactly from last year's article.  It will appear every single time I recap the GAMA Trade Show because it's the entire reason to go to the show in the first place.  Without net income, you don't even get to be a part of all this.  You can't pay your people, you can't pay your bills, you can't maintain your business as a going concern, and you can't pay yourself.  The past year has been a lean one for me as DSG endured the crushing expense of a store move (two locations' worth!) plus construction.  It was the longest long play I've ever attempted in my life and there were certainly times I questioned whether I had made the right call.  But by the end of 2018 we'll be operating in the black and we can start building reserves toward the future.  Must be present to win.  The stakes are high, it's time to buy, and you can never have enough.

Secrets
I'm holding out on you.  I'm afraid there's nothing for it.  I spent the money and the time and I went to GAMA, and I have two games I think are going to go stratospheric and I want to make sure I'm in on the ground floor before they close the gate.  So I'm not mentioning those here.  I also move amongst certain private social circles that took part in the show, and our activities were entwined with many other aspects of the week and served as some of the standout experiences I had on a personal level.  I also know for a fact at least one private group I am not involved with had a presence at the show.  The whole week was a delightful dance of secret handshakes and iconography.  I was also taken into confidences far more times during this GAMA than all previous Shows combined.  In some cases I have been approached by publishers wishing to include me in special endeavors, in another case it was a distributor wanting to branch into something I am known to be familiar with, and a bunch of times I was trusted by my fellow retailers for one reason or another.  I shall honor those confidences as though my business depended on them.  My reputation surely does.

That's it!  Hope you enjoyed that recap of GAMA 2018!  In all likelihood Griffin will go to Origins 2018, GAMA's major summer game convention and the one that is open to the public for gameplay and all kinds of tournaments, sneak previews, and like such.  My next appearance will almost surely be GAMA 2019 once again at the Peppermill.  I'll bring my best jacket.

Tuesday, March 13, 2018

Asmodee Makes Another Move

You'll have to pardon the spotty updating this week; I am at the GAMA Trade Show in Reno and not spending a lot of time in front of a keyboard.

It's Tuesday and that means a long day of publisher presentations.  The one that had the most business consequence out of what I've seen so far, was the Asmodee North America keynote.  ANA announced some serious changes to their distribution vertical:


  • There will be a "Best Sellers" stockist program a la Games Workshop;
  • Stores that play ball will get incentives such as a spiffy set of racks for free, pricing advantage, and free demo units;
  • ANA is committing to having the Best Sellers titles in stock all the time in distribution; and
  • The new Minimum Advertised Price for ANA products is 90% of MSRP, up from 80%.


This is made possible by the ANA retailer approval system and the exclusive distribution in the U.S. through Alliance.  I know exclusives are not popular among most retailers but the reality is Alliance is extremely well-practiced at this and is positioned to make it work.

ANA kindly provided the list of required stock titles.  It's stuff I already mostly want to have in stock all the time anyway, so this is an easy "yes" for DSG.  Examples:


  • Catan, 
  • Catan Seafarers, 
  • three Ticket to Ride standalones,
  • Mansions of Madness,
  • the three Arkham Horror series core games,
  • Star Wars Destiny R2P2 box,
  • Star Wars Rebellion,
  • Star Wars Imperial Assault (apparently not deprecated in favor of Legion),
  • Pandemic,
  • Pandemic Legacy Blue (which I guess will be available now),
  • 7 Wonders and 7 Wonders Duel,
  • Splendor,
  • Dixit,
  • Concept,
  • Carcassonne,
  • Mysterium,
  • Dead of Winter,
  • Small World,
  • Captain Sonar,
  • Dice Forge,
  • TIME Stories,
  • Unlock set 1,
  • Takenoko,
  • and a few more titles that I expect to fall off the list at the first review.


I mean, wow, that's the DSG catalog in large part.  Okay, maybe it's not ALL I'm stocking.  I sell a remarkable lot of Boss Monster.  But a bunch of these are true evergreens that are proven and for the most part these are games that I tend to order without fear.

I think the tightened MAP, if enforced, which these guys tend to do pretty well, is going to help improve the value perception of the titles in this line.  Nobody complains that iPhones or PING clubs are just about always sold at full list price.  They don't feel like they are missing out on a deal by going ahead and buying, and the product is good enough that there isn't much buyer's remorse afterward.  I make a lot of hay offering preorders and other specials at 20% off for ANA products, and I don't think that will change much at 10% off.  I do think we'll see people spend a little more time with their games once they buy them, and maybe we'll see less of a firehose tempo in terms of market release, a frenzy up front, and dumping afterward.

Anyway still plenty left to do at GAMA but I'm happy to see big moves like this from publishers who are looking to improve the landscape for these products.  At the end of this mechanism is better capability for me to put good games into the hands of players.

Tuesday, March 6, 2018

Thoughts, Part 9

It's about that time of year again.  Next week I'm off to the GAMA Trade Show, where I'll network with my peers and the various publishers, distributors, and other stakeholders in the comic and hobby game industry.  I'm mostly excited because it's the only week all year that I'll get to spend with most of my online friends from the trade.  It's really amazing how much you get to care about people you rarely (or never) see, from the shared adversity and triumph you experience in parallel.
This year it's not in Las Vegas, but in Reno.  We went over all this last time out, and while I've never been to Reno Tahoe Carson Sparks etc, it's apparently arctic tundra there this time of year so it amounts to a trip to what might be a reasonably comfortable hotel, and all focus and attention being on the task at hand.  I've got to hunker down this year and run the show in "lean" mode, being far less extravagant with both my travel and with exhibit hall purchasing than I would be in flusher times.  The year 2018 will see DSG paying off its moving debts and gradually ramping into a far healthier status quo, a process already well underway.  Forgoing indulgence now buys me a much sweeter Christmas for my kids.

If you're in the industry and you're going to GAMA, feel free to check out the seminar I'm presenting with the gregarious extrovert John Stephens, one of the owners at Total Escape Games in the suburbs of Denver.  The seminar was conceived as a study in "competing in crowded markets," and evolved into a lesson on using the Strengths/Weaknesses/Opportunities/Threats analysis tool to guide business decisions.  We appear on Monday and Thursday.  This year there are no video games on the agenda, so the seminar I joined Paul Simer of Nerdvana in Tennessee to deliver last year won't officially happen, but I bet the topic will come up in the retailer lounge, and I'll be happy to talk shop.

Speaking of video games, the Nintendo Gamecube has been resurging in the past year or two, as the nostalgia tug of the Nintendo 64 reached a sustained high level and people who played the "GCN" from 2001 to 2006 or so are now a dozen years older and ready for what amounts to a throwback.  But in the past few weeks, the system has been white hot.  This might be thanks to videos like this one from Metal Jesus, as well as the availability of the EON HDMI adapter (in stock today at DSG!) making it unnecessary to spend over $300 to get a rare official component cable on the secondary market to enjoy the best and clearest video output the GCN can produce.  All at once I sold right out of Gamecube systems, and right now my buy prices are similar to what my sell prices were in January.  Software is blasting through too, with hot titles lasting a day or two on the shelves even when I overpay well beyond market rates for buys.  I don't see the Nintendo Wii heating up for a while yet, but if you've got patience for the spec, there are some rare titles that might be good pickups now before their prices get too crazy, like Metroid Prime Trilogy, Mensa Academy, Tatsunoko vs Capcom, and Fire Emblem: Radiant Dawn.

In unrelated news, what's going on at the helm at Games Workshop?  We're seeing all kinds of spotty stock availability, a number of retailers are experiencing chronic shipment problems, and information on the roadmap ahead is as opaque and inscrutable as it ever has been.  This is a different course than what we saw in 2017, when better information informed our buying decisions so we could spend more with confidence, and orders were so consistent you could set your watch to them.  If you still wore a watch, that is.  I don't know what sort of edict from Nottingham has been imposed, but seriously, throw that roadster in reverse while there's still time to get back to the tour.  My own rep has been accommodating and dependable, but I'm hearing much differently from the grapevine.

Magic... yes Magic.  It's the center of my business, for better or worse.  Singles are off-the-charts good right now.  Increasingly players are electing to buy outright the pieces to play their game, even when the secondary market economy makes that cumbersome and difficult.  I try to ease the pain as best I may, but in some respects I'm battening down the hatches against the same storm winds.  Sealed product?  Studs and duds.  Somehow, Wizards of the Coast just cannot call a shot these days.  Products we kinda sorta thought should be okay were red-hot sellouts, like Unstable.  And products that should have been no-brainers, like Masters 25, met lukewarm enthusiasm despite including a solid roster of in-demand cards.  I've made no secret that I'm not a fan of the market shenanigans driven by the likes of Saffron Olive, but I think he largely got it right with his assessment of how Masters 25 came up shallow, though better than Iconic Masters.  If Masters 25 was going to lean heavily on renewing scarce cards rather than bolstering the market supply of heavy staples, we needed to see more of them so that the flood of new supply didn't undercut the perceived value of the set overall.  Grim Tutor and Ravages of War are examples he gives that I specifically cited throughout spoiler week as appropriate for the set, but they didn't make the cut.  Even having the Scars fastlands or Onslaught fetchlands would have made a big difference.  Masters 25 will still sell through and be popular for years, but it's a Stratocaster, not a Les Paul.

In the opposite corner, I have the Pokemon TCG.  Pokemon singles have collapsed entirely.  Only a few key cards are desired or needed and the rest sell at or near bulk rates.  The overwhelming share of Pokemon Trainers who call DSG home want to buy booster packs, and only booster packs.  It probably helps that we have the ongoing 3-for-$10-after-tax deal going for any boosters I can readily restock, one of the few standing discounts in this industry that actually delivers the volume it needs to be worth doing.  But singles, special box sets, even starter decks or Elite Fat Pack Trainer Boxes... they may as well be ballast, for all anyone wants them, and I'm starting to pattern ordering accordingly.  I wonder if this will chalk up to be another odd disparity between my old Gilbert customer market and my new Chandler one, or whether retailers on a broader scale are seeing these effects.

That's all I have for today's Thoughts article.  I'll sign off once again with the immortal words of the late great Peter Steele: "Please buy our products."

Tuesday, February 27, 2018

Anthropomorphism

ME: (Enters the store.)  Hi there everyone!

CHRIS: Hey there Bahr.

GRIFFIN: Hey.

BRIAN: How's it going.

JAKE: Good morning.

DOOR: Bing bong.

BOARD GAME SHELVES: We are in disarray specifically to frustrate you.

VIDEO GAME RACKS: We'd make more money for you if people could see us.

MINIATURES TOWERS: We block your view of the room because we're too tall.

FUNKO POP SHELVES: Nobody visits us.

COMIC BOOK RACKS: So much room to breathe now.

HVAC: Enjoy the arctic air.

WALLS: Thanks for all the decor you put on us.  Oh wait.

REFRIGERATOR: You can't drink most of the goods I'm slingin'.

A/V SYSTEM: Hope you like Lindsey Stirling for five hours.

COUNTERTOP: I am covered in crap and not efficient and clean-looking.

BOX FULL OF PARTS: Allow me to impede your path to your desk.

ME: (Bumps box full of parts.)  Dammit (under breath)

BOX FULL OF PARTS: Got your shin!

GARBAGE CAN: I'm full of your discarded energy drink cans.

CHAIR: Oh thank you for not discarding me, I know I'm just an ordinary chair but I'm so glad I don't have to live in the game room with all my brothers.

DESK: I've known you since you were 13 years old and you kicked me out of your house.

STACK OF CARDS: Gonna sort me today?  Gonna sort me?  I'm SO out of order!

IMAC: You have like 62 new emails since you left home eleven minutes ago.

IN TRAY: I have a new invoice, two bills, and fifteen scan-and-shreds for you.

PHONE: RIIIIIIIIIIIIIING.

ME: (Doesn't recognize that number.)

BRIAN: I got it!  Good morning, thank you for calling Desert Sky Games, how may I help you, sir or ma'am?  No, the owner isn't here.  No, he doesn't take calls or in-store meetings.  You're welcome to email us.  It's-- huh, they hung up.

ME: (Thumbs up.)

HVAC: And I'm spent for now.

A/V SYSTEM: I lied. Enjoy some Fall Out Boy.

IMAC: A new update is ready that will require you to restart your Mac.

ME: (Looks at 25 open tabs in Safari, plus Word, Excel, and Mail.)  (Selects "Remind me tomorrow.")

SAFE: You'll want to deposit some of my cash, you know.

ME: (Puts jacket back on to walk across the street to the bank.)

DESK: You'll be back.

STACK OF CARDS: Wheeeeeeeee!  I fell over!

CHAIR: Thank goodness he's gone again.

BOX FULL OF PARTS: Still here!

ME: (Bumps box full of parts.  Grimaces.)  SON OF A

BOX FULL OF PARTS: He shoots, he scores!

DOOR: Bing bong.

BIG AL FROM THE SMOKE SHOP NEXT DOOR: Hey there Mike!

ME: Hey Al!

BIG AL'S DOG: Ruff!

ME: Hey Pupper!

CURB: LookoutlookoutLOOKOUT!  Why don't you go to the light!  JAYWALKER!

ME: (Crosses street.)

ATM: BUUUUUUUUUURP.

ME: (Crosses street.)

CIRCLE-K DOOR: Bleet blaaaaaat!

ME: (Picks up protein drink and almond butter snack crackers.)

CASHIER: Three ninety-one.

ME: (Hands over the money.)

CASHIER: Out of four.  Hey, are you guys hiring?

ME: You keep asking that while you're on the clock, are you sure you're safe to do that?

CASHIER: (Shrugs.)  I like Pokemon.

ME: I had my suspicions from your Pokeball tattoo.

CASHIER: Let me know?

ME: Will do.

CIRCLE-K DOOR: Bleet blaaaaaat!

ASPHALT: I give you an inch, you walk all over me.  Heyooooooo

DSG DOOR: Bing bong!

BOARD GAME SHELVES: Still a mess.

VIDEO GAME RACKS: We're ready to move to the front of the room.

COMIC BOOK RACKS: People bought things off me while you were gone.

HVAC: I'm awake!  I'm awake.  Here, have some Canada.

WALLS: We could be serving you so much better, but you don't have time to develop us.

REFRIGERATOR: How about a nice cold Mexican Coke?  That's right, you can't have one!

A/V SYSTEM: Remember MEEEEEEE for centurEEEEEEEs!

COUNTERTOP: Still covered in crap.

ME: (Bumps box full of parts.)

BOX FULL OF PARTS: Damn it feels good to be a gangsta.

CHAIR: I hate existence.

IMAC: Eleven new emails, but they're all purchases from TCGPlayer.

MESS OF CARDS: Are you gonna sort me now?  Soooooort Meeeeeeeeeeee.

ME: (Commences daily finance.)

QUICKBOOKS ONLINE: You need more money.

CHASE: You need more money.

BANK OF AMERICA: You need more money.

AMERICAN EXPRESS: Transaction approved to "WIZARDS OF TH"

PAYPAL: You need more money.

SQUARE: You need more money.

DISTRIBUTORS: Thanks for the money!

AMERICAN EXPRESS: Transaction approved to "GAMES WORKSH"

EBAY: Some guy wants to return a booster pack because it didn't contain a Black Lotus like he expected.  Don't keep him waiting!  Select here to give him all your money, and however much more he wants, and apologize for wasting the King Entitlement's precious time, and we'll sit here and enable this bullsh*t, because screw you, that's why.

FACEBOOK: Some guy messaged the store asking if we buy classic Pokemon cards.  He has several Machamps he will let go for $1000 each.  If we refuse, he says his boy scout troop is doing a project on how many one-star Yelp reviews it takes to drop a business's rating to where Google will no longer show it on Maps.

CRYSTAL COMMERCE: 504 Gateway Timeout Error.

TCGPLAYER: Some guy named Jim Johnson messaged asking us to ship his playset of Flooded Strands to his other address in Kathmandu, Nepal, and to his other name, Bishal Akash.  Want me to email sales support?

MESS OF CARDS: If you're not going to sort me, can you at least get that big silver cube off me?  One of your employees put it here while you were gone.

GAMECUBE: Hi sir!  I'm new here, and this is my controller!  I'm missing my power supply and AV cable, though.

ME: (Raises eyebrow, looks over at box.)

BOX FULL OF PARTS: Hey, hey what are you doing.  Hey, don't look at me like that.  No.  Stop.  What the hell to you think your doAAAAAAAAHHHHH!!  That was mine!  I loved that power supply!  That was MY AV CABLE!  You gave it to me to keep!  This is an outrage!  I'll bump you!  I'll bump you every g*dd*mned hour until you return my property!  DO YOU HEAR ME!

GAMECUBE: Good as new!  Thanks, Bahr!

ME: (Nothing.  Inanimate objects can't talk.)

DOOR: Bing bong!

CUSTOMER: Hey, you guys sell used Gamecubes?

ME: I have awesome news, my friend.


Tuesday, February 20, 2018

Competitive Espionage Highlight Reel

At least twice in the past week and five times since the beginning of the year, we have had visits from people looking for information to benefit our competitors, without them knowing we knew they were doing this.  There are certain lines of "curious questioning" that, in their ham-handedness, they ask in most obvious way possible, such as a bona fide customer never would.  But an urchin of a competitor absolutely would and does ask such questions.  Often they are tied to known discussions from social media, and we can tell whose particular grapevine is the source of some given line of inquiry, often because they're the only jackwagon pushing it.

I was especially amused at the visitor the other day who asked about all kinds of product categories, which right there is a tell because most customers are only interested in one or two things we carry and they don't care about the rest so they don't ask about the rest.  After he asked about a bunch of very particular changes we had made across a few categories, changes working fully as intended from our vantage point, the guy slipped in a question, a rehearsed-sounding line, that it "looks like we're dying or something."  Huh.  What a strange thing to say, and a strange way to say it.  You'll want to wind that reel back in, fisherman.  No bites on that cast.

We do have people wondering about our decision not to put a million-card inventory into binders or bins for people to pick through, damage, and shoplift, or spread out haphazardly in labor-eating showcases.  It's obviously because of volume efficiency and because we've got it all in an electronic system accessible from a kiosk or your computer or phone 24/7.  Not because we're dying or something.  We show them, we explain, and most people get it.  Our biggest in-town competitors do the same thing so they know how it works.  Others... I've explained it to them.  Some of them simply don't believe it.  They've spent so long expecting card singles to be merchandised and sold a certain way that the notion is ridiculous to them that a store would scale past the point where the more tactile methods are still feasible.  They're sure it must be some sign of internal decay.

Elsewhere, too: We've made major adjustments to our comic business lately (future article), the result of inherent upheaval within the category, not quite death throes.  And we went small on Warhammer for now, a move that is sales- and data-driven and is also a spec on the expected success of Star Wars Legion and A Song of Ice and Fire during the next few months.  We know people will come back to Warhammer and we'll be there when that happens.  Not quite a core breach.  Authentic customers get the picture.

It's all high comedy, we do our best to feed Boris and Natasha the exact information they could derive themselves from simple observation, plus a few peppercorns of our choosing for flavor.  They're thinking they are James Bond and have us snowed, and it's all we can do to keep a straight face while confiding to them our super-secret plan to drop Magic: the Gathering in favor of Beanie Babies.
Obviously, information about competitors has some value, or we wouldn't consume it.  However, information provided by competitors has so much less value compared to observation and deduction.  This is for the simple reason that competitors surely want me to have bad information about them, leading to incorrect assumptions and therefore bad decisions.  I may therefore assume that any information about competitors that is directed to my possession has a low confidence level of being accurate.  It's barely better than line noise.

What competitors cannot fake is what they actually do.  I can look up their eBay sold listings, for those who sell on that channel.  I can look up information in other channels as well.  I can examine buylists.  I can look at convention booths and the traffic around them.  I can observe which stores open or close branch locations, who recruits and when, and what kind of sales or specials they run.  I can look at who runs tournaments at a loss.  Many stores post photos of big Friday Night Magic crowds on Facebook; I can count heads and know they got that many that one time, but I also know they are going to self-select when to post such things, and we won't see brag posts when events run small or fail to fire.  If I really want to, I can walk right in the door of another store, though that will only provide me a snapshot of what they have on the shelves immediately to hand, and roughly how much of it.  Such a visit has some value.

I can, of course, talk to customers and friends, and send confederates of my own to run reconnaissance, but that information is necessarily second-hand.  Even from a trusted agent, I now have to filter both for their memory error, which might be minor, and for them being shown a Potemkin Village, which might surely happen if the competitor is able to mark our guy (or girl) the way we mark theirs.

Ex-employees who tour the town working at other stores are a useful source of information.  You didn't think Bill Belichick signed James Harrison off the Steelers' waiver wire purely on play value, did you?  Harrison had an imperfect photocopy of the Pittsburgh playbook in his brain, and he brought it with him to Foxborough.  I have hired from the departures of other store staffs, and they have hired from mine.  They will therefore have operational knowledge.  This is probably the most accurate second-hand information an owner can get about a competitor, and it's still vastly inferior to direct observation and deduction.  Ask anyone in the intelligence business: Expatriates are never fully trusted.

Some competitors are secretive, and this is mostly a good play by them, with an important drawback that I'm sure they are happy to take their chances with.  If they are not broadcasting misinformation as a matter of practice, then most of what I can learn about that competitor will reach me firsthand, by direct observation.  This means I may not have as much information about them to sift through, but what I do have will come with a greater confidence level, and will be much more accurate.  Quality over quantity.  But I was a professional analyst in my former career.  I may be better able to interpret observational information than others.  By contrast, most competitors in markets like mine place too high a value on gossip, while any attorney can tell you that eyewitness testimony comes with such reliability concerns that even courts that have spent centuries focusing on such evidence are finally starting to move in the opposite direction.  Secretiveness is a great counter to gossip, it drops the confidence level of gossip to the level of background noise.  Secretiveness also allows a business to conceal operational corner-cutting.  All told, it's probably the highest EV (expected value) play, assuming the industry remains largely as it is today.

Where all else is not equal, such as in my case where I endeavor to build DSG to the level of a megachain and build the kind of processes that will make it run by itself, allowing me to sell it off or retire to focus on my writing or whatever, there is so much operational transparency that I can usually hide in plain sight anything I don't want known for certain, with the abundance of activity and process making it difficult to assign importance to any particular discovery.  Simple observation of our results tells a clear and concise story: Whatever else a competitor may think of DSG, we have succeeded in moving into a facility that makes us the biggest show in town, and our three closest competitors have already gone out of business in the six months since, despite our directing zero attention their way.  We're just throwing Rose's low strong, over and over again.  Scoreboard.

Every day, customer demand drives what we sell, and we spend our focus on that.  Every day, customer preferences impact how we conduct events, and we pay attention to that.  Every day, customer experience shapes how we market our value proposition, and we practice and emphasize our delivery of that experience.  Customers first.  Competitors?  Whatever.  I guess they're out there.  Competitors are just not that important.  To the customer who walks in the door, competitors may as well not exist.

How will I handle Austin "Danger" Powers when he comes to visit again?  Who cares.  I'm not worried about the urchins, because I know what they can't observe firsthand, and I know what they're going observe and get completely wrong when they do show up.

The urchins are all going to be at their main waterin' hole on Friday nights, or whenever there's stuff happening at the store level like a prerelease, and so they'll never see the huge crowds we draw for Magic, D&D, and minis at the same time on those days.

The urchins are asleep in their beds and never see my fulfillment staff arriving early every morning, hours before the store opens, to pick, pack, and ship the scads of online orders we get from various channels, a business component that earns more than many small stores' entire revenue streams.

The urchins are working at their day jobs and never see me networking from my home office with an incredible assortment of awesome retailers, publishers, and distributors, getting great information early and maximizing DSG's ability to capitalize on 11th-hour hits.

Nope, the best the urchins can do is visit my store during the small hours, browsing racks devoted largely to video games and accessories these days, products no other tabletop stores in town have anywhere near our level of expertise in.  They enter our cavernous space exceeding 6000 square feet, hear upbeat background music playing on the AV system, and see perhaps a pickup game or two going on amongst a stretch of empty tables.  A staff member greets them and goes back to quietly sorting cards or processing a distributor order.  All is tranquil.  Magic singles are out of sight.  The deep video game stock is off the floor.  This time of year is ebb tide for tabletop, so there's not much exciting to see there.  RPGs are flourishing but they don't cut an imposing figure on the fixtures.  I guess as far as Spy Hunter 007 there can tell, our operation must be pretty moribund.  He can go report that to his benefactor.  There will surely be feasting and merriment there as they wait for the imminent notice of our closure.

Perhaps that recon payload is deliberately crafted on my part.  Perhaps I want them thinking about what I am doing, instead of thinking about better ways to run their business, optimize their processes, and delight their customers.

Or perhaps I'm just a jerk, a coarse and unfriendly former Jedi, and everything I just said above is wrong, and is deliberate misinformation intended to mislead those of my competitors who read this weblog.

Tuesday, February 13, 2018

Building For Tomorrow: Shopping Pathways

Paco Underhill, author of the essential Why We Buy: The Science of Shopping, explains using observational data analysis why many of the retail store configurations work to increase sales and shoppability of product.  At the core of any such configuration are the pathways: the means by which visitors to the store will walk from one feature to another.

Typical configurations include a racetrack (a circular pathway surrounding the store's center and inside the periphery aisles) with product rack and fixture set up as an amphitheater (low and see-over-it in the middle of the racetrack, high and explore-into-it at the outside of the racetrack).  Using various other pieces of shopping psychology, such as proper display orientation and appropriate stock choices for endcaps, the result is an extremely shoppable store.  Think about places like Costco or Best Buy and you've already seen these concepts at work.

Of course there are disruptors and shakers pushing into new territory in terms of configuration, and we're all enjoy the experience they create and learning a distinctive imprint of their brands.  But just saying "you should be able to do it differently" and seeing it done differently are two different things. Two of the wider divergents are Apple and IKEA, and it's pretty safe to say they swing heavy hammers in their particular categories.  For some upstart furniture warehouse in Oklahoma City to turn IKEA on its ear, we're going to need to see something mind-blowingly compelling.

For most small specialty retailers, sticking to Underhill's proven methodology is the best approach.

Of course, we have variance in the size, shape, and orientation of our commercial buildings or suites. That makes a difference.  There may or may not be windows, secondary entryways or exits, unusual positioning of restrooms, or what have you.  Little Shop of Magic in Las Vegas occupies a renovated professional office floor.  Meeples Games in Seattle operates a kitchen.  Nerdvana in Tennessee made room in their staff area for a technical workbench to perform cell phone repairs.  Whatever store it is and wherever it is, unless it's the cookie-cutter 1000-square-foot shoebox with a counter running the length of the left side, it probably required some adaptation to make Underhill's setup work.

And then we have Desert Sky Games, six months after the move to Chandler.  Has it been that long already, I ask, knowing it has aged me years.
Right from the start, we set up the rudiments of the model.  The cash wrap and tills are on the left, the merchandise is in the middle, there is a counterclockwise racetrack around it, and the game room is behind all of that.  Like a game of Sim City (pictured), we had to set a lot of things up knowing they would be inefficient now, but would be in the right places for later.  Especially in the first month when the entire store was compressed into the front 30% of the footage, there were some head-scratcher layout decisions that only later bore fruit, like starting the merchandise some fifteen feet in, to provide a decompression zone.

We're running into a few issues that aren't agreeing with the model and are, in my observation, appearing to impede shopper ease.

Because we're using the grid rack fixtures we already owned, there is not a sufficiently low amphitheater.  It's improved significantly from the Gilbert store deployment and from the first-month tarp-limited storelet we had, but it's not good enough.  The Citadel and Army Painter paint racks block sight lines badly, and we have a gondola with apparel that we haven't managed to arrange more approachably.

We don't even really have the exterior ring as such, though there is a small piece of it in the form of some racking that is supposed to hold built white cardboard boxes that we never seem to have time to build.  But even those racks are going to be overrun by additional arcade games.  In fact...

The immediate turn-right is occupied on the wall by the vintage arcade.  While this has surely contributed to the arcade performing better than it ever has in DSG history, it also creates something of a shadow dead-zone for products.  It doesn't help that the stuff that's not security-intensive that we can readily feature there is well outnumbered in the store by stuff we need closer to where staff can watch it.  This is an open puzzle and one I'll look to iterate when I build some more grid gondolas out of the stack of fixture racking in the Fungeon.

Oh, also, the Fungeon (Fun Dungeon, you see, it's a play on words...) NEVER MIND anyway it's not built yet even today.  Once completed, we'll be able to get rid of the giant mound of crap in the back center of the suite once I can put main shipping into the unfinished room.  That space will then turn into something relevant for gameplay.  In turn, gameplay space nearer the front of the store can be optimized, such as with a streaming station, and configured so that it meshes with the south end of the retail space.  There are a bunch of dependencies and it seems like each domino isn't ready to be pushed because I discover another domino precedent to it.

One thing that works are the video game racks, which are low-height and easy to shop, but are also sort of right in the middle of the amphitheater where nobody can see them.  They do need better signage but also it seems like I may need to break up the aisles and make them easier to enter.  This could potentially allow things like dedicated racks for each given system.  I'm not sure exactly how this is going to get reconfigured, but I'm close.  I at least know what the result needs to be.  As it is right now they have a low attract rate and a high conversion rate.  From among customers who actually make it to the video game racks, we get plenty of sales.

The storefront is going to switch to Square Retail POS soon, leaving singles for now on Crystal Commerce.  This is going to help me solve another problem, which is that it's becoming increasingly difficult to keep track manually of what sells through and has to be restocked that sits on the main floor.  Enough of the business is used merch now that this isn't a debilitating problem.  But it's related to pathways in that I've got a bunch of shoppable racks that the natural flow of the floor does not direct people toward in a meaningful way.  They only get there if they explore further on their own initiative, which not all shoppers do.

Our comic deployment is about to change considerably and I don't think it's finished doing so.  We engaged in a massive inventory conveyance to Game On in Prescott, who gave us an offer too generous for us to refuse, and that leaves the comic side of our business focused on boxholders and new releases almost entirely.  That part of our mechanism has been performing well and now we get to configure a focused setup for that and let it run on diesel fuel for a while so we can get some other cost centers and feature centers wrangled properly.

There's more than that and I suppose without photos this makes for something of a dry read.  But this sort of boring iteration is at the core of my work right now.  We have four and a half years left on the lease and no moves or alterations of the footage on the immediate horizon, so it's all kicks and punches until further notice.  Fundamentals, in product first and then in facility.  Facility looks the worse for its second-priority ranking.  And here we are.

Tuesday, February 6, 2018

Live by the Facebook, Die by the Facebook

I've been locked out of Facebook on my home computer due to their Trend Micro glitch/hustle/scam.  They halt my login stating that malware has been found on my PC, and force me to download ransomware from Trend Micro and run it to continue to use the platform, to "keep Facebook safe."

Except every part of that is wrong.

My home computer is an iMac, not a PC.  It has no malware.  Macs don't get viruses.  (Shut up, you know they don't really, at least not the way malware circulates for Windows.  Clickbait articles from anti-malware software publishers will suggest they've found some MacOS virus running rampant, but then they trot out a proof-of-concept demo, if even that.  A Mac user could get defrauded via phishing, of course, but that's not a software exploit, that's a human exploit.)

Sophos Home has provided my iMac with a clean bill of health in any case.  The only filth in this computer is my saucy repartee.  My friend Brent does enough anti-malware work in his day job that I trust his expertise on which protection suite to install.

And because my home computer runs MacOS High Sierra and not Windows, it cannot run the Trend Micro ransomware to unlock Facebook.  I can download it but it won't run.  Turns out .EXE files only run in Windows.  I'm just stuck.  Can't log in to Facebook at all.

It's not keyed to my IP address because Facebook still works on my iPhone on wifi.  Alas, that's not good enough for business use but will suffice for light recreational consumption.  All my other apps, utilities, data, shared drives, etc, are on the desktop computer, not my cell, and those are needed to get  real work done.  But it proves the lockout is more device-specific than just an IP range.

It's not Safari-specific because Facebook still works fine on Steph's Macbook Pro, four feet to the left of me.  Both our accounts log in just fine.  This also eliminates iCloud as a possible culprit as both Macs here and my iMac at work are all mirrored into each other via the various iCloud app suite frameworks and drives.

It must be some manner of MAC address or other exact device identifier for my iMac in particular, because I wasn't even able to get around the lockout by clearing cache and cookies, restarting, or even installing Chrome or Tor Browser.  I guess I could leave Tor on my system and go use some cryptocurrency to buy a rock of black tar heroin.  Maybe some other time.

A friend of mine who has inside access at Facebook reached out to me and is helping see if he can untangle this mess, and I'm very grateful for that and hope he can make some headway.

Anyway, at the same time as wanting to put my head through the wall with frustration, I had a chance to think about how utterly dominant Facebook has become as a small business interface.  The rest of all my business contact is just a footnote by comparison.  And that means my ability to make a living is basically held hostage to Facebook's whims.  Not good.
They can lock small business owners out of their official pages any time they want.  They could demand ransom payments of serious amounts.  What choice would we have but to pay or suffer steep losses of contact and reach?  It's not fully shut-us-down dangerous, but it would change the equation on advertising tremendously.

Part of Facebook's power as a platform for businesses comes from the targeted advertising being so overwhelmingly effective for the price it costs.  We have the ability to tailor hyperspecific advert sets that reach exact customer demographic segments, and for a pittance we can address them for relatively exact periods of time, and in such a way that they see the promotion organically as they are going about their recreational web consumption.

That's huge because advertising outside Facebook is so much worse, in essentially every way.  It's less precise to hit a mark, more expensive to craft a message payload to deliver, and vastly more difficult to measure exactly who you reached, with what, and when.  To say nothing of conventional adverts being, well, tacky and commercial-ish.  Whereas on Facebook they're so much less intrusive when done well, and amount to "Here is this cool thing."

Platforms like Google and Yelp are the next tier down and neither of them is offering anywhere near the pound-for-pound value to a business.  And they are the next-best things!

Then there would be retrenching to old media like television, radio, and tree corpses of various kinds.  Expensive and horrifically wasteful.  You pay out the nose and you're all but shouting into the wind.

And yet, and yet, and yet... now I find myself wondering what it will take to get back to broader and more effective advertising in these other media.  Because obviously I can't count on Facebook.  One little lockout and all of a sudden my marathon runner is hobbling along on a wooden leg.  It's breathtaking how crippling this feels to my ability to do my work for the store.

This is only shallow malice, too!  This is just a money grab, focused in the tech sphere.  Much like how they've been manipulating feeds to push businesses for more and more money in order to get their content seen.  What happens when it's about something more pernicious than money?  We know Facebook has been somewhat onerous lately in pushing a political focus... what happens when you don't write what they like?  Or post the photos or videos they approve of?  What happens when you are trying to make a living but you are lacking in your... comradeship?

(It sounds paranoid and excessive until it happens and then you're like wait this is insane how can this really be taking place in this day and age)

And so far we're only contemplating action by the social media platform owner!  (Users are the product.  Business advertisers are ostensibly the customers.  Facebook has made it pretty clear right now who needs whom more.)  When the hive mind truly sets in and a generation of consumers simply live in social media without thinking... that's when we'll be stuck in an episode of Black Mirror.  Not to keep coming back to that reference, but a show about the dark side of ubiquitous communications technology is pretty damned topical to almost everything any of us are doing every day.

Review culture already has us well on the way to "Nosedive" and the bookend segments of "White Christmas."  I'm heartened to see some degree of backlash happening.  Thoughtful consumers no longer instantly believe the one angry guy who 1-starred the restaurant because of some atypical experience where management perhaps fumbled its attempt to make good.  But not all consumers are thoughtful consumers.  A bad review absolutely hurts a business, it drives some amount of casual bread-and-butter traffic away.  And small businesses can only run that rotisserie for a short while; the customer journeys to each competitor in turn, happy until the one thing that pisses him off that day, moves to the next, same thing happens, and then he ends up shrugging, assuming all commerce is awful and always will be, mise well just go to Wal-Mart.  And... (/gestures around at all of this)

I am told this particular Facebook lockout lasts a few days and then goes away on its own.  That likely won't happen until after this article sees print, but I'll edit this paragraph when it does.  Until I get my account back, then... I guess I'll just go stare at the ceiling and try to plan how I'll continue doing business with the ever-tightening ratchet of big social media companies that are becoming more and more powerful in this arena.