Gaming: The Future of Brick and Mortar

As a young boy I still remember going into the hobby shop at the mall and buying D&D books and lead citadel minis. I remember saving up my allowance for weeks so that I could go into this little store in the mall and stare at their one rack of books hoping to find something new and wonderful. To be honest, 27 years later, not much has changed. I still go into the gaming store and stare at the racks in wonder. But for how much longer will I be able to do it?



Gaming is a tough business and it seems to me that it's only getting tougher. Recently, an excellent local store closed its doors. Its owner was passionate about the hobby, loved what he did, but couldn't make ends meet. We face a time of oversaturation in the market, pressure from the internet and an unwillingness of the retailers to change how they do business. I see this all the time in my main field (computer retail). Like gaming, that industry has undergone massive changes in the last few years, all brought about by discount internet sellers undercutting brick and mortar stores. So what can gaming stores do to compete? I think the first thing they need to understand is how their customers think and how they have changed. When I speak to the few store owners I know, I always hear the same arguments,"we charge more, but we have a gaming space and we give good customer service". News flash, guys, while your customers over 30 might place value on your customer service, few if any of your younger clientele will. As for gaming space, I encourage you all to read up on generation Y and their feeling of entitlement. As much as you think you are providing a service, they see it as what they are owed. You might think it ridiculous, but it's true all the same. So does that mean all brick and mortar stores are doomed? I still think they still have time to change and adapt and flourish.

So what do I think they need to do to survive in modern times? Well here's my list. It is by no means all-inclusive, but they're ideas I have gotten from 17 years in retail, from talking to store owners, and from reading online and dealing with online resellers.

Magic the Gathering is key.

As the owner of Quarterstaff games put it so succinctly to me last week when I was there "Magic is the thing that lets you make money and do everything else you want to do in your store". It doesn't matter if you like Magic, you need it! You need a strong community of players buying and trading cards with your store to make things work. Look at other retailers in your area, find out their policies on buying cards, selling cards and trading them. Once you know what they are doing, match them. If you can't at the very least match them, why would anyone deal with you? Yes, for the one time you sell a card at an inflated price you will make good money, but you will have lost out on a bunch of transactions that would have not only netted you greater profit overall, but also let you turn over your card inventory. The "sell fewer but sell high" mentality is a one way road to failure in retail. Trust me, I know from experience.

Inventory.

You need to have a good selection of inventory and a fast turn around for orders. Gamers are impulse shoppers so be sure to carry what they want. Keep a finger on the pulse of the industry. If a game is picking up steam online and at other places locally you better start seriously supporting it. You need to fight for your customer's dollar. As they say, "not showing up to the fight is the surest way of losing it".

Offer discounts.

I know, this seems counterproductive. If that's the case, why has The Warstore done so well selling product at 20% off? 20% off still isn't as cheap as Ebay, and yet they sell tons of gaming product. Customers like deals. The simpler the deal the better. Convoluted membership schemes don't work. Offer a discount that people can understand and make it simple to get that discount. No one wants to do the math to find out if they are getting a good deal. If I walk in and see 10% or 20% off on these products I KNOW its a good price. If I see, "buy a membership for X and save Y" then I have to start doing the math... If I spend X on a membership I need to buy Y worth of models to start seeing a benefit... is it worth it? You know what's easier than doing that math, guys? How about this, I will browse in your store and then, once I have decided what I want, I will go home and order it online at 30% off and free shipping to my door. How much money did you just make off that transaction? Make your reward system simple and tangible. It's that easy. Yes, you might make less per transaction but volume increase is good. Overall sales and profits will be better. Perhaps make a sliding scale to try and increase the average invoice total? Something like 10% on any transaction less than 100, 15% at 101-150 and a whopping 20% on any invoice over $150. Make all preorders or orders for out of stock items a 15% rebate to try and ensure people order their new stuff with you as well. What a business should care about is the bottom line, not the profit per line on an invoice. Again, higher sales volume increases inventory turnover and cash flow. Both good things in retail.

Events.

Stores need to run events and they need to be run well. End of story, no excuses. Post a schedule of events 30 days in advance. Have someone responsible for it and if they can't do it, find someone who can. You need people to come into your store if you expect to make any money, and the best way to do it is to run events. Make sure there is adequate prize sponsorship as well. You want to entice people to come back and participate again. Good prizes and a well-run event will guarantee that. Low value or useless prizes and poorly organised events will kill your store community faster than anything else.

Staff

I think most stores do pretty well in this department, but it bears mentioning anyway. Gaming stores need to have knowledgeable and helpful staff. Super geeky neckbeards who are too busy playing with their own models/magic cards or reading something online will not serve your customer properly. Spend the time to build a good team in your store and reward them sufficiently to keep them. Cut the dead wood before they have time to hurt your business. I know that gaming isn't the type of industry that pays much more than minimum for staff, and honestly that's fine for the most part. But you need to give your team an incentive to show up, stay motivated and want to grow the community and the store. Sadly, the minimum wage you are paying them alone will not accomplish this. What that incentive is might be different for every staff and every area. Maybe reward them for running successful events with in store gift certificates or offer them deep discounts on product? Whatever you need to do to keep your good staff is worth it. They are on the front line with the customers. They will be the ones building the interpersonal relationships that keep the customers coming back. In the computer industry we call this becoming the "trusted advisor". Whatever you call it in gaming, its crucial you build that relationship with your customers.

Marketing

Marketing for gaming stores breaks down into two categories as far as I am concerned. Word of Mouth and Social Networking. Word of Mouth advertising pretty much takes care of itself if you are running a good business. That being said, I will look a little more closely at Facebook and other social media. Many local gaming stores have Facebook pages, but they seem almost like a second thought. Facebook is a crucial part of marketing to a younger generation. Young people are connected to Facebook and Twitter 24/7 in today's world. These media are a direct road to their wallets. So, why don't the local stores spend more time developing their Facebook communities? Once you build up your followers it' the easiest way to reach your customers with event information, advertising, and new product info. But, like anything else you need to incentivize your customers to follow you on Facebook. Perhaps give away a $20 gift certificate every week or run other contests. In the case of a weekly gift certificate giveaway the maximum true cost per week is probably around $12 (based on a $20 product costing around $12) which means around $48 a month in marketing costs. This seems low enough to me to make it worth trying. I'm not a marketing specialist, but I do know that social media are underutilized by the retailers in our hobby.

Listen

By far the easiest thing a store owner can do. Listen to your staff, and your customers. Put out a suggestion box and encourage your customers to use it. Yes, you will get crap in there that makes no sense or is just ridiculous, but I guarantee you will get valuable information too. When I go to my local gaming store and hear people complaining I always wonder if the owner knows he has a problem. Owners need a way to know their customers have issues, especially if they are not involved in the day to day running of the store. This is a quick and easy way to get important feedback. Customer retention is key to a retail business. Angry and annoyed customers won't come back... and without customers what's a retail store? It's closed... that's what.

Well, I think I've written a big enough wall of text for today, and I think I've given plenty to think about. There are other considerations as well, but perhaps I will cover those in a follow-up to this article. People who read this need to understand that I have a love of the hobby like few others. I don't want to shop online. I want brick and mortar stores to survive and flourish, but they have to help me help them. If they can do that, they will survive the changing retail world. If not, they will die out.

I hope that someday my children can walk into the gaming store with me and share my wonder as a I stare at the wall of books and minis. :)