Tuesday, June 2, 2009

Competition is all right with me.

I got this comment to yesterday's reveal that my card games sales were down and my board games sales were up.

From Mark:

"I'm glad to see your game sales doing so well, but with the new game store downtown, I wonder if your boardgame sales may soon fall like your card game sales have.

Your new downtown competition does a lot more than you do to support card games (weekly in store Magic tournaments, etc). Maybe he is gaining some market share in card games.

He says he plans to do similar things with boardgames. He hasn't quite figured out which board games to stock yet (he has good graduate level stuff, but not many entry level "hooks"). If/when he does figure this out, and follows through on his plans to sponsor in-store gaming activities, I don't see much advantage you will have in this category either.

And if he ever gets a sign up ... whoa baby!"

My first response was a bit flippant:

"And here I was thinking I'd probably get a lot of the magic sales back...."

I don't want to appear threatened or defensive. (I detected a tone of aggression in his comment, but I really don't think we have to fall into a "either him or me" posture....)

I've found that the most mentally healthy way of dealing with competition, is to wish them all the luck. And to offer the hand of cooperation. I've been freely sending people his way, and I'm hoping he'll return the favor.

He has every right to open a business. I'm sympathetic to the desire. I understand why he'd want to be in downtown Bend. Life is way too short for territorial cat fights.

Because competition always arises. Always. No sense getting all worked up every time it happens. I just tend to my own knitting.

My second answer to was to say, it may turn into a a moot point since I think the Big Boys are on their way:

"By the way, I think the chainstores on are the verge of diving into this category, making it moot.

Had a guy yesterday who "Just can't Understand Why Walmart Doesn't Carry Ticket to Ride!!"

He thought they could sell them all day at 40.00 instead of my 50.00.

I'm pretty sure he's right. So...it's probably only a matter of time."

To extend that even further. If it so happens that the competition sells the hell out of boardgames, more power to them! Nothing could be better for our culture than to have families turning off their T.V.'s and video games and sitting around a table for a little friendly social interaction.

But as far as competition goes, local competition is nothing compared to the big box stores. Anything they decide to fully carry is something that then becomes difficult for me to fully carry. Simple as that.

If it happens....I'll just sell something else.

But I also think the concept of competition deserves more of a serious answer.

So here it is.

1.) It doesn't have to be a antagonistic relationship. No reason we can't co-exist. I don't believe it's a zero sum game.

2.) My experience is that competition doesn't usually take all your business - despite what the public thinks. There is usually a downturn at first, but it picks back up again after a certain time. (Same is true when they leave, by the way, there usually is just a small boost in sales, nothing more.) It's the new kid in town phenomenon, and you can't fight it. But like I said, after a certain time, probably because each store creates its own customers, sales trend back to normal.

3.) In theory, by doing what he's doing, he could create new customers, some of who will spill over to my store.

4.) Downtown business is walk-by business, mostly. I'll get a share just by being on a busy street.

5.) If you've read my blog for long, I've always maintained that specialists gain a short term advantage, but generalists will be more solid in the long run. Even if that isn't true, I'm more comfortable being a generalist.

For instance, if a store owner spends all is time and energy and space and money on Magic he can get a very good result.

But if he adds Warhammer to the mix, that adds to his time, energy, space and money commitment, as well as splitting his focus.

Add role-playing games, and the focus get split further.

Add boardgames, and it splits further.

How about cribbage and chess and such? I'm getting constant requests for them, but I don't have the room.

Like I said, nothing's easy. It all costs one way or another. If he chooses to use his space for game play instead of inventory, there are advantages and disadvantages. If I choose to use my space for inventory instead of game play, there are advantages and disadvantages.

If what he says happens, it's a fairly easy thing for me to put my attention into one of my other 8 product lines; sports cards, toys, comics, graphic novels, dvds, used books, new books, a different line of games.

Or something completely different. The world is full of compatible product. I have limited space, but not limited opportunities.

For instance, let's say that Boardgames are selling on a scale of 1 to 10 at a 9; and lets say that anime and sports cards are selling at a 7. So I chose to support boardgames to a larger extent than those other categories.

If boardgames stopped selling well, first of all I don't have to buy as much. Secondly, I can put my money behind anime and sports cards, and perhaps push them back up to an 8, say.

In other words, I'm diversified so that I always have options. I'm always keeping my eye out for other things to sell, for other opportunities. Some things get put on the back burner, some get put on the front burner.

Or I can even decide to carry another selection altogether. I've been looking even more at the Kid Robot type toys lately, for instance. Or like I said, go ahead and bring in cribbage, and chess and backgammon and such. I can think of half a dozen other things I could either bring in or support.

I was once 85% sports cards, and last month they were 2% of sales.

I'm nothing if not adaptable.

I'm hoping we can stay on friendly terms. I've been sending people his way. It's not a very pleasant experience when everyone starts taking sides.

Shop either place or both places. That retail.

5.) We all live by the same retail laws: overhead, margins, inventory, promotion, store design, etc. etc.

I've been doing it for 30 years. I'm feeling pretty good about things right now. I'm feeling pretty confident in my ability to change to fit the circumstances.

6.) Finally, What's with the sign? It's been six months...


Broofa said...

Interesting post. I like your take on things.

One thing I've found since moving here is just how much more aware I am of the limited market here. In the Bay Area, Manhattan, there are all sorts of insanely niche-y stores because of the shear density and quantity of people. But here...? The "X% of local population" equation can very quickly whittle a store's potential market down to a couple hundred people people, spread across all of Central Oregon.

(And I'm surprised at how many stores I see opening that don't seem to have bothered doing that calculation! What was that one place that just closed? Bikini cruise wear or something ...?)

Thus, reinforcing your point about generalization I suppose.

However, it does seem like there's the possibility of a worst-case scenario where you and your competition split the potential audience, neither of you making enough for a sustainable business, and you both end up going away. Only to be replaced by someone else later on.

But that's a bit gloomy. I prefer to think that there is a synergy of sorts. By virtue of their being more choices available, and the two of you each nurturing cross-over customers, that the total customer base actually grows and allows your respective stores to identify what each of you do best and stock up/sell accordingly. Two stores in the same market, but carrying different product.

Whups, the kid is crying, gotta run! :-)

Duncan McGeary said...

T"he "X% of local population" equation can very quickly whittle a store's potential market down to a couple hundred people people, spread across all of Central Oregon."

I've often said the same thing.

It's interesting to me that so much competition arises when the economy is bad, but I think it's people scrambling.

Just had a kid in wanting to put up a flyer for a 'game room' over by Wilson, or someplace. A Yugi oh tournament, or something.

Duncan McGeary said...

Thing is, if he took say half of my boardgame business, it would amount to maybe 5% of my sales, which I could probably replace fairly easy by doing something else.

I think boardgames are a little different. People see them in the window, and come in.

I do get a few calls asking if I carry games, but usually it's something like Scrabble or Go or some other 'mainstream' game that cost more at my distributer than it costs at Wal Mart.