Monday, October 26, 2009

"Cheap"

I've been saying for awhile, now, that movies don't really know what's about to hit them. Neither do electronic gaming stores. They think they know, but I don't think they do. I think independent bookstores, battered and bloodied by Amazon and the chains, are probably aware, but in denial.

There's an interesting article on Eurogamer, "Digital Survival" which says in part:

For one industry grouping, however, there's a single question which dwarfs all of those concerns. If you're a retailer, your only real question about digital distribution is straightforward - where the hell does this leave me?

The examples from other industries undergoing this transition are not promising, since they tend largely to focus on metaphors involving creeks and a distinct lack of paddles. Bricks-and-mortar retailers of music and movies have largely sat back and grumbled while their businesses were hijacked, first by online retailers of physical product and then by digital distribution services. Music is much further down this path than movies are, but there's no question that they're both headed for broadly the same destination.

Specialist games retailers who follow that model face little more than a decline into insolvency in their medium-term futures. Worse again, they face competing with far bigger companies to retain their slice of an already shrinking pie - as boxed game retail sales fall off in favour of digital distribution (not to mention the downward price pressures I discussed last week putting the thumbscrews on margins), supermarket chains are increasingly seeing high profile games as a worthwhile loss-leaders.


That's kind of what I've been saying, both that it's coming fast and that there doesn't seem to be much a smaller retailer can do about it...

Word is, these new e-readers aren't great with the graphics, so there is an irony in that comics and graphic novels may endure longer than the prose novel as a viable paper product. Heh. Also, word is, and I've noticed it in my own store, comics have held their own during the Great Recession. No one was really sure at first, and it didn't look promising when I lost some old customers....but they've been replaced, and there have been some terrific storylines, like Blackest Night, which have sparked interest.

Anyway, when it comes to Digital Distribution, I'm going to just try to keep on top of it.

Personally, I'm so used to having market share disappear, that my solution has been to keep adding product lines, each of which is smaller than it used to be, but together is as big as it ever was.

This has worked so far. I suppose as long as I can keep juggling a diverse product line, I might be able to see it through. It helps that I have foot-traffic, for whom everything in the store is 'new' and 'unusual' and who are often willing to buy on impulse.

By the way, I saw a talk on Book T.V. from the author of "CHEAP, the High Cost of Discount Culture" which pretty much has been the way I've been thinking. I am NOT a consumer, and "deals" don't have much effect on me. (Well, I buy "deals" for the store, but that with the idea that it doesn't matter if I like it, only that I think someone else might like it.)

But I see it everyday in the store. The book the customer wants -- which I have new because I rarely see it used -- is put back in favor of a book they want less just because it's cheaper.

What a way to live. Always getting second best because it's cheaper....Then not liking the cheaper thing, and never using it or throwing it into the back of the closet, or worse, buying a storage space for all your 'stuff.' Spending more time and energy to get something cheap than the damn thing is worth; and meanwhile depriving themselves of what they really want; and if they had bought it for full price they would've already forgotten and just remembered whether they liked it or not.

I ordered CHEAP this morning. A hardcover. A retail price of 25.95. So the irony being that probably no one will buy it....

7 comments:

tim said...

"Personally, I'm so used to having market share disappear, that my solution has been to keep adding product lines, each of which is smaller than it used to be, but together is as big as it ever was."

Soon you'll be Woolworth's.

blackdog said...

"What a way to live. Always getting second best because it's cheaper....Then not liking the cheaper thing, and never using it or throwing it into the back of the closet, or worse, buying a storage space for all your 'stuff.' Spending more time and energy to get something cheap than the damn thing is worth; and meanwhile depriving themselves of what they really want"

Bravo!

Buying cheap makes sense when you're talking about fungible products (gasoline, bananas, etc.) but where the hell's the sense in buying something you don't really want just because it's cheaper than what you DO want? It's a pure waste of money.

Suppose you want a certain model of HDTV but you decide to get a lesser model because the first one costs $200 more than you think you can spend -- what's the matter with SAVING until you have the extra $200 you need? I guess Americans have forgotten the whole concept of SAVING; they gotta have that HDTV or whatever NOW even if it means settling for what they don't really want.

tim said...

It really depends on the item.

One thing that happened is that it got extremely expensive to have things fixed. That contributed to the idea that everything is disposable.

I used to but $3000 computers because I wanted high specs. Eventually, I realized that I was better off, performance-wise, buying $1000 computers and replacing them three times as often.

When I buy something I really care about, I'm willing to pay extra. But I'll look for the deal on cheap milk & bananas & gasoline, like blackdog says.

RDC said...

I concur with Tim that it depends upon the product. For example someone may want a 50 inch HD TV. They don't suffer much if they decide that they can not afford the fifty and buy a 47 inch instead. If they are fixed on a particular then they should make sure that they are getting that model for as cost effective a price as possible.

In a lot of cases it is not a case of not being able to afford what they want so they buy something cheaper. It is a case they don't need to be buying it at all.

blackdog said...

"In a lot of cases it is not a case of not being able to afford what they want so they buy something cheaper. It is a case they don't need to be buying it at all."

Well, if I bought only what I NEED I know my life would be far more limited and bleaker. I don't NEED books, I don't NEED a stereo system, I don't NEED a guitar, I don't NEED to drink wine -- I really don't NEED the computer I'm typing this comment on or the Internet access that enables me to post it, for that matter.

If I bought only what I strictly NEED I would be able to accumulate far more money, of course. Which is fine if you think the sole purpose of life is to accumulate as much money as possible. I don't. Why force yourself to live poor so you can die rich?

blackdog said...

"I used to but $3000 computers because I wanted high specs. Eventually, I realized that I was better off, performance-wise, buying $1000 computers and replacing them three times as often."

Computers are kind of a special case because the technology advances so rapidly and they keep getting cheaper.

As for me, I keep a computer until it dies. I was running an XP machine for about eight years until it finally gave up the ghost a couple of months ago (hard drive started sounding like it was grinding rocks).

RDC said...

Need can have both a physical and a psychological meaning

Or as defined in webster

1. A condition or situation in which something is required or wanted

2. Something required or wanted; a requisite:

In this case you can consider that need translates into a reasonable level of want and in without going into debt.

Instead of your interpretation of need = necessity.