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Tuesday, January 16, 2018

Close But No Cigar

In today's cybertronically connected omnidata existence, we have access to most of the knowledge of humanity's history alongside our funny cat videos.  Big business has leveraged this power to offer service/intrude ever deeper into our individual lives, and effectively so.

The positive side of this infotech Renaissance is something resembling my electric car navigating around a blocked section of freeway for me, while I conduct a voice conversation hands-free over bluetooth with a distributor two time zones away, and then I arrive at Panera to pick up the lunch they already have waiting for me, and pay with a smartphone "bump" and fingerprint unlock.  It's tantalizingly close to living in the world of Star Trek.

The negative side of this social connectivity overload is something best described by telling you to binge-watch Black Mirror on Netflix.  A suggestion that is nice and meta.  There are only 19 episodes and practically all of them are outstanding.  Don't start at the beginning.  Start with "Nosedive" and continue into "The Entire History of You" or "Be Right Back."  It's an anthology show (episodes and characters all stand alone) so you can watch in any order.  "White Bear" is the best one but it has a markedly different tone from the rest of the series so don't start with it.

In a far more mundane sense, the instant access to any index, catalog, or calendar has everyday implications here at your Friendly Local Game Store.  It enables a degree of just-in-time logistics that was impossible as recently as a decade ago, and makes our store a living, breathing organ of the Digital Now the way no tree-corpse emporium rightly should be.  But then there are the times when we can't seem to find the strike zone, and miss opportunities left and right.  It's maddening.

The most obvious is product availability, of course.  We're expected to have the new hotness on release day.  It's a pretty fundamental piece of our job.  And most of the time we get it done.  But a streak of rotten luck with pre-orders, shipping dates, and logistics had DSG missing some crucial board game titles over the holidays: Azul, Kingdomino, and Sagrada, all monster hits, were no-shows for us.  I had pre-orders in on all three.  For various reasons I missed each one.  It was maddening.  Now I'm scrambling for the reprint waves, which always sell far worse than the initial shipments.  Meanwhile we had far too many copies of Clank in Space and Game of Thrones Catan.

It's astounding that in a world where over three thousand new board games are released every year, the market expectation is for us to have all the most relevant ones in stock on time every time, and thanks to our ubiquitous and versatile connectivity, we mostly get there!  But when we whiff, it just makes us look that much more incompetent.

In areas other than product sourcing, this comes up often as well.  When close a comic subscription box due to the buyer failing to pick up after repeated notices, we look back and think how obvious it was on first glance that the guy was a deadbeat.  Like, how could we not know?  Hindsight is 20-20 and this is clear confirmation bias, but it seems like we're wrong practically every time.

Or, egads, employees who have ended up being terminated.  Not every involuntarily-separated staffer has gone on to be "unfriended" by the store -- some are still on good terms and one even got brought back.  But there are a few I've had to cut loose where I looked at it after the fact and can't imagine how I didn't see the problems coming all the way back at the interview stage.

The tiny things.  Having every retro controller in stock except the one the customer needs.  Having six versions of that card in stock but the player wants the seventh or eighth version only.  Having three people call and ask if we have a Standard event on the three days each week when we don't have Standard.  Getting calls one after the other for Legos, used DVD movies, and model rockets, none of which we carry, though all are things I could envision bringing in!  I'll be shaking my head putting down the phone and wondering how I managed to miss carrying everything that anyone wants.  Isn't my job connecting people with things they want?

We're not alone, fortunately.  We aren't the only ones who miss seemingly obvious layups.  Wizards of the Coast released the Grand Prix playmat images for the first quarter of 2018.  They obviously used the Rekindling Phoenix art for Grand Prix Phoenix in March, right?
Miscues like this can happen because ultimately even the most powerful and flexible technology gets its effectiveness from the human beings operating it.  It's true at the big corporate level and it's true at the local small specialty store level.  Every working human is multiplied many times over in capability by good tech or software, and conversely no tech or software solution is as dependably effective as the one that includes among its process elements, that of human judgment.

And where there is human judgment, there is always some amount of error.  And that error is what jumps off the page and sears itself into the forefront of the obsessive mind.

It's just very easy to forget the first part, where the technology makes that judgment more effective and the judgment makes the technology more effective in turn.  The benefit is still there.  Only it's cold comfort when we see the frowny face from the customer who had a very simple need that we could not meet.  However diligent we might have been, all that customer knows is that we dropped the ball somehow.  They don't know, can't know, and shouldn't care that we only drop the ball one time in a thousand.  They were the one.  As far as they can tell, we're 100% useless.

So how do we deal with this interminable parade of Scott Norwood field goals?  Aside from ongoing training and education to sharpen the active judgment of our crew at every opportunity, we build in safety in the system.  Good restocking logistics are crucial, and are something I really need to make a software change to get back.  Stocking deep is nice if you have the luxury; most stores use Open to Buy and cannot simply aggregate forever (and there are serious tax implications that discourage doing so anyway).  Focusing or narrowing categories, the opposite of diversification, can certainly help, but of course that leaves the business at the mercy of its main revenue lines underperforming from time to time.  Mostly process mastery and built-in redundancy serve as a substantial backstops against performance failures.

We've operated with only the most perfunctory of safety nets since the move, with so much of my attention in 2017 directed at things other than main store operations.  I'm enjoying gaining back so much of that lost ground every day completing unfinished deliverables, and I think we'll start to see our batting average improve as I am able to give the staff a more functional infrastructure to work in. Until then, we'll just have to keep winging it as best we may.

Tuesday, January 9, 2018

Hobby Comic and Game Store Closures, Second Half of 2017

It's a bloodbath out there.  And for sure, I have been through the closure of my businesses before and it's not something I would wish on others.

Here are the stores that hung it up between July 1, 2017 and December 31, 2017, that I know about.  My information sources are imperfect but I am confident that this list does not fundamentally mischaracterize the situation.  I required a firsthand-source announcement or the discovery of the store closed in order to add it to the list.

  1. 2 Drop Game Shop (Fort Myers, FL) 
  2. 8-Bit Legends (Clermont, FL) 
  3. A Kid At Heart Games (Round Rock, TX)
  4. Arcana Hobbies and Games (CT)
  5. Area 52 Comics (Gainesville, GA) 
  6. Arkadia Gaming (Phoenix/Ahwatukee, AZ) 
  7. Battle & Brew (Atlanta, GA) 
  8. Board Game Island (Galveston, TX) 
  9. Cerebro Gaming (Lake Charles, LA) 
  10. The Comic Book Collector (London, Ontario, Canada) 
  11. Comic Cafe (Hammond, LA) 
  12. Comic Outlaws (Phoenix, AZ) 
  13. Cosmic Comics (Bellingham, WA) - reported may still be open
  14. Desert Sky Games and Comics (Tempe, AZ) (other location remains open) 
  15. The Dice & Dagger (Mandeville, LA) 
  16. Excelsior Games and Comics (Greenville, MI) 
  17. Fongo Bongo Games (Salt Lake City metro) 
  18. Full Spectrum Wargames (DFW metro) 
  19. The Game Academy (Tampa, FL) 
  20. Game Haven (Norwalk, CT) 
  21. Gamers Guild (Florida) (may have been sold to new ownership)
  22. Gamers Hall (Jackson, TN) 
  23. Games & Gizmos (Redmond, WA) 
  24. Game X Change (Clearwater, FL) 
  25. The Gaming Goat (Las Vegas area, 2 of 2 stores; Chicago area, 2 of many stores) 
  26. Gizmo's Games (central California, 2 stores) 
  27. Heroes Landing (Clearmont, FL) 
  28. Hero's Corner Comics (New Orleans) 
  29. Hobby Land (Montana) 
  30. Karliquin's Game Knight (Boulder, CO) 
  31. Legends Tournament Center (Bedford, TX) 
  32. Light Speed Hobbies (Portage, IN) 
  33. Lost Harbor Games (Westfield, MA) 
  34. Microplay (Reading, PA) 
  35. Oak Cliff Games (DFW metro) 
  36. Quantum Leap Games & Hobbies (Killeen, TX) (sold to new ownership and expected to reopen)
  37. Retro Reboot (Pineville, NC) 
  38. Retro Station (Woodbury, NJ) 
  39. Scarecrow's Games (Millsboro, DE) 
  40. Shep's Games (Aurora, CO) 
  41. Silver Star Comics (Tempe, AZ) 
  42. The Score (Murfreesboro, TN) 
  43. Tables Board Game Spot (Las Vegas metro) 
  44. TD4W Games (Delaware) (may have reopened)
  45. Toyriffic (Maplewood, MN) 
  46. Untamed Worlds (Lynchburg, VA) 
  47. Valhalla Games and Comics (Plano, TX) 
  48. We Got Game (Mankato, MN) 
  49. Wildpig Comics (Kenilworth, NJ) 
  50. Zanadu Comics (Seattle metro)

And no, I'm not being cheeky counting my own Tempe store on that list.  I had two stores, I now have one.  Never mind that the one is bigger than the previous two combined.  I moved locations, but I also closed a comic and game store, and therefore that counts as one down.

So, what do we make of all this?

Both of the stores closest to my new Chandler location closed within 90 days of my arrival.  Arkadia Gaming and Silver Star Comics were their names.  I did not target them in any way, I did not make efforts to poach their customer base.  I do not expect to get any significant migration in the near term from their clientele.  There is a myth that a new store can open and steal all the customers from an existing store, or something like that.  While some audiences are migratory to a fault (X-Wing players, I'm looking at you) the reality is that most are not, and will focus at one store while occasionally-to-infrequently visiting others.  When a player's Friendly Local Game Store closes, a substantial percentage of its customer base simply quits the hobby.

I think an important lesson to take away from DSG's experience with Arkadia and Silver Star is to remind ourselves as business owners that a store that closes is not necessarily bad, nor did it necessarily operate poorly.  It is possible for a store to operate well and still come up short.  Granted, failure to survive is usually indicative of at least some missteps, but nobody is batting a thousand out there.  Retail is in a state of upheaval, just as social media and technology are, and those of us piloting these barges are steering against choppy waves and just doing our best to steer prudently enough to stay off the rocks.

As Captain Picard famously said, "It is possible to commit no mistakes and still lose.  That is not a weakness.  That is life."  A quick look around the list provides plenty of evidence of that.  Hobby Land in Montana closed due to owner retirement; customers from the area speak of it with reverence. It would be a miscue to suggest that they "failed."  Gizmo's Games was a planned closure, with owner Lloyd Loomis deciding he needed a break and taking advantage of both his locations being eligible for ending-of-lease.  Zanadu Comics was an era-defining store in one of the toughest markets in the country for small business, and is as much a victim of the artisanal comic magazine problem as anything else, rather than some speculative lack of execution.

It's true that some of the stores on that list probably did fail, as such.  When a clubhouse store has holes in its floor and has aimed so low in its local market that its players are indifferent to that?  Probably no longer really on the yardstick by which we assess a peer.  It's just a thing, something that exists, something that irritates competitors in the area, but has long since been doomed, and it is only a matter of time before entropy catches up.

There are not a lot of guarantees in business, aside from ever-increasing costs.  My own situation, while favorable in the long term, is still stabilizing in the wake of an expensive, cumbersome, and disruptive move.  When another store transitions into history, every survivor learns something, even if that something is marginal or another data point on the list of known causes-and-effects.  If we're lucky and we keep this barge afloat, we can learn enough to know where the next rocks are going to be.  Staying alive is the only sure way to maximize the range of positive outcomes.

Tuesday, January 2, 2018


So the holidays did us no favors, and the week afterward was suitably lucrative at the expense of a lot of discount dumping.  I didn't enjoy doing that because it was tremendously inefficient.  You've already seen that discounts beyond 10% are basically straight-up loss, so you can imagine what a 40% to 90% clearance does to the asset ledger.  At least it worked as intended.

What, then, for 2018?

The year 2017 was the most difficult in my professional career, and that's a career that has thus far included such non-running-my-own-business events as finishing law school, passing the bar exam, and working for over seven years as a senior rules analyst for the Arizona Department of Health Services.  That job had me presenting legal analyses of the Arizona Administrative Code in front of the Governor's Regulatory Review Council on an ongoing basis.  Meanwhile, I also worked on the team in the Office of Administrative Rules and Counsel that developed and revised code chapters to adapt to ever-changing statutory requirements and political prerogatives.  This ranged from untangling the hellish skein of the 2003 version of 9 A.A.C. 21 -- a rulemaking so exacting that it wasn't finished until two years after I left the Department -- to writing the Medical Marijuana regulations in 9 A.A.C. 17 from the ground up, meaning our office began with a blank screen and a blinking cursor.  We had a mandate from a 2010 voter initiative that a registration system for patients and a certification system for dispensaries each had to exist on the double, where neither existed before, and it was upon us to manifest them.  And I'm saying 2017 at DSG was more difficult, at least for me specifically.

Imagine you have a business model that is functional, but depends on a certain amount of owner expertise.  For whatever reason, it has not scaled up to the point where process mastery takes over, and there are managers and crew who are purely on payroll and are capable of operating the business in its entirety with no other oversight.  Instead, the managers and crew are able to perform all the day-to-day internal work, but an owner is needed for infrastructure, banking, payroll, HR, and so forth.  That's DSG, obviously, as it operates even today.  Now imagine that owner is unavailable for half the year.  And that was 2017.  I was effectively out-of-office for huge swaths of time, working on the move, often physically on site operating construction equipment.  I had to do it.  Nobody else was available, aside from some spot assistance I got from some people who may not realize just how badly I needed it and how grateful I am.  But in any case I could not readily deploy the employed staff to do this work, as most of it involved move-specific deliverables that will not recur.

"Wait a minute, not recur?" you may ask.  "What about when this lease ends?"

Yeah, about that.  If there's one lesson the year 2017 hammered completely into my skull, with blood and bone fragments scattering everywhere as it pounded mercilessly, again and again, it was this: A store needs a staggering cash reserve to move, and if that cash reserve is unavailable, borrowing to make up the remainder is not a viable play.  The viable courses of action are: (1) Stay; (2) Move to a smaller or cheaper location where the cash reserve needed is lower enough that available funds are sufficient; or (3) Wind up operations and shut the business down.  As it happened, we did have some money available.  Operations provided some, our moving sale back in June provided a lot, and we let a few categories lie fallow to free up additional dollars.  But costs quickly spiraled out of control and we had to borrow the rest.  The result is the situation we have today, where the store has awesome long-term advantages but we're stuck tightening our belts as we enter the new year.

One of those three courses of action will occur in September 2022, when our lease ends.  We will either renew in place, we will move to a location we can easily afford, or we will close.  I have a health condition that gives me only about a 50/50 chance of being alive by then, so this might be someone else's problem when the time comes.  But assuming I am involved, by far the preferable scenario is going to be staying open in place.

And that means our way forward is clear.

No more worrying about how I'm going to leverage into the next thing.  No more, at least for now, dithering on whether it's time to put in a coffee bar -- that will be a question for years later, depending how fast our bankroll refills.  I'm not even going to put any attention into reopening branch locations until we've paid for the opening of the main location, which with any luck won't take long.

The order of the day is not expansion, it is regrowth.  The year 2018 will be the one where we take what we've learned, how we discovered to do it optimally and efficiently, and then apply that knowledge to the business we had to take apart last year, and build it better than it was before.  We have the materials.  We have the location.  We have most of our existing customer base, and every day we meet new faces.  We'll skip past all the steps that didn't work since 2012 and build the same amount of muscle mass in half the time or less.
The Magic card "Regrowth" translates into German and Italian as "New Life."  Standing here at the beginning of this vast undertaking, it does sort of feel like that.  New life, with a newer and greater adventure.  Come join us if you like.