A new strategy to replace B&M

[f2k]

Secondly, running a physical retail location can be beneficial for a wider business while losing money as an individual unit. For example, because of improved customer retention, brand awareness and sales it drives through other channels. There is also the considerable benefit that comes from being the 'only game in town'. Generally a town with a GW store isn't likely to have another retailer due to the competition; so GW would be the first exposure to war-gaming many people get. Finally, GW also tends to give a lower discount to trade accounts than other manufacturers. This gives indie stores a big incentive to promote non-GW products. I know of 3 stores in a reasonably close vicinity to me that push other game systems or model ranges and effectively use GW products for some stable income and to bring in new customers.

Actually, I think we understand it all too well...

Improved customer relation is an oxymoron as Games Workshop has no interest whatsoever in retaining customers. Instead, they rely on churn’n’burn and kids with wealthy parents.

Brand awareness is also not something they’re trying to foster. Instead, they rely on word-of-mouth “free advertisement”. That might be a good argument for the brick’n’mortar stores, but do consider this: considering Games Workshop’s global footprint, the areas covered by their stores is minuscule. This tactic might work in the UK where they have the best coverage of stores, but it fails completely in the rest of the world. And the problem is: once it’s failed they have no backup plan...

“Only game in town” might have worked a decade ago. But now that several very large internet retailers have established themselves with good discounts on all products it’s becoming less and less of an advantage. And one that’s likely to disappear completely within another decade or so.

As for the low trade discount, this only serves to make the above problems even worse. Games Workshop seems to be losing ground steadily all over the world – particularly in areas with no stores. Why? Because no sane retailer would build a business mainly on Games Workshop products. Instead, they carry other products, further reducing awareness of Games Workshop games.
Worse, Games Workshop products are not a stabile income as you suggest. Rather, it’s an increasingly dwindling part of a stores income as more and more players deserts Games Workshop in favour of other games.

None of the above means I want to defend GW's current strategy. I don't believe they have innovated enough and I think they rely on limiting competition rather than outshining it; which tends to go badly wrong when it goes wrong. That said the vast majority of people who are suggesting a large reduction in GWs retail presence clearly don't understand the core reasons why GW maintains it at present and the damage reducing that quickly would do.

Here I agree with you.

Thing is, I think that it has already gone horribly wrong and now we’re spectators to the death struggle of a once-upon-a-time great company. A company, I might add, we all used to love back then.

I don’t think any of us have ever argued that it wouldn’t be painful for them to restructure themselves – it most certainly will. But without that restructuring I see very little hope for them. It has to be done – the sooner, the better...

[xxRavenxx]

As for the low trade discount, this only serves to make the above problems even worse. Games Workshop seems to be losing ground steadily all over the world – particularly in areas with no stores. Why? Because no sane retailer would build a business mainly on Games Workshop products.

I need to point out that this just isn't true. GW actually offer me 3% more margin than the average supplyer (and this will increase each year till I'm at 5% I believe, so long as I pay my bills on time - Yay for incentive schemes!).

The only supplier I have who offers more than them is a PP supplyer who offers an extra percentage off so that stores can pass the percentage onto customers and compete with wayland/maelstrom. (you don't have to, but my point is thats why he offers it, to allow you to discount with no personal loss.)

Interesting thing too: 90% of my income is from GW stuff. Its our biggest seller by miles. I'm sure it varies from town to town, but I'm mentioning it to show that its not the case that a GW based store can't function.

[Chaos and Evil]

GW's massive market penetration derives from their (loss making) retail chain.

Delete the store network and GW will do well... For a few years...But its market dominance will quickly erode (not the it isn't doing so now, but it'll be faster), leaving GW much smaller in the medium term.

Long and slow managed decline would be better for the company than instantly getting rid of most of their stores.

[de Selby]

Can I recommend that people post where they are, and what part of the world they are talking about, in their replies. Gw's store situation is dramatically different in different parts of the world and whenever we have this discussion we end up comparing apples to oranges (something I suspect GW management may be doing, actually).

[aenimosity]

Interesting thing too: 90% of my income is from GW stuff. Its our biggest seller by miles. I'm sure it varies from town to town, but I'm mentioning it to show that its not the case that a GW based store can't function.

Out of curiosity, do your GW sales take a hit after the yearly price rise? By that I mean income and volume. If you don't want to share that sort of information that's fine, I was just wondering if in your area the wailing and swearing not to buy ever again actually has any impact.

[Cxt]

GW's massive market penetration derives from their (loss making) retail chain.

Delete the store network and GW will do well... For a few years...But its market dominance will quickly erode (not the it isn't doing so now, but it'll be faster), leaving GW much smaller in the medium term.

Long and slow managed decline would be better for the company than instantly getting rid of most of their stores.

Can I recommend that people post where they are, and what part of the world they are talking about, in their replies. Gw's store situation is dramatically different in different parts of the world and whenever we have this discussion we end up comparing apples to oranges (something I suspect GW management may be doing, actually).

2nd quote is accurate. For the reasons of why the first quote is incorrect.

Location matters in this debate. GW has 1 store a few hundred miles from me. Please tell me how GW's market penetration at all relies on that store that is far, far away. It doesn't. They could close down, and GW sales in my area wouldn't change in the slightest. Not by a single sale.

My location is USA. England will be very different I'm sure, as they actually do have store/market penetration there.

[Omniassiah]

To continue Cxt's thought. Last time numbers where posted income was pretty much split evenly between the UK, US, and rest of the world. Now they lose around 50-60% of their income on their retail arm which last time I checked almost 75% of the stores are in the UK. That means that they made 33% of their income in the UK and spent 45% of their income on their UK store network... Now those are rough estimates since I don't have the numbers with me, but overall GW can't support the market penetration they have in the UK with out external sources. If they start losing the rest of the world then they start going belly up quickly since there expenses are not distributed over there customer base, and at least in the US, GW has some serious competition.

[iamfanboy]

GW's massive market penetration derives from their (loss making) retail chain.

Delete the store network and GW will do well... For a few years...But its market dominance will quickly erode (not the it isn't doing so now, but it'll be faster), leaving GW much smaller in the medium term.

Long and slow managed decline would be better for the company than instantly getting rid of most of their stores.

You are definitely right that a managed decline would be oh so much better than just closing down a ton of stores, but other than that there are several problems with this statement.

GW's store penetration is only strong in the UK, with 45% of their stores and around 30% of their income (roughly each year, it varies up and down a few %). Mainland Europe, with 35% of their stores is still only about 30% of their income. The US, with 15% of their store, is still another 30% of their income - not only that, it's their highest-profit area, currently, and has always had around 30% of their income despite never having anything CLOSE to store penetration. Historically, their most profitable years were when they expanded into the US heavily, not bothering with any stores at all, merely selling to independents.

If you're in England, imagine driving from London to Manchester (on average) to go to the closest official GW store. In four places I've lived with active (30-40+ players in a group) it's more like driving from London to Glasgow.


Not only that, your statement implies (quite strongly!) that GW products cannot compete on an even basis with Privateer Press, Mantic Games, or any of the other games out there and they NEED a locked-in store model simply to ensure their profitability.

You know what? You're almost right, and becoming more right the higher they raise prices. When Mantic (a company that has no chain of store, is less than a few years old, and has to outsource their production to Renedra adding a HUGE expense that GW doesn't have to worry about) can offer plastic minis for less than half GW's prices, there's something wrong with GW's business model.


NOTE: %s are estimations based on counting the stores that show up on GW's store search; yes, I spent a boring few hours weaseling the numbers out of it. To give you an idea, within 100 miles of London there are over 80 official GW stores; within 100 miles of Chicago (GW's highest amount of stores around a US population center) there are TWELVE.

Now the population of the greater Chigago area is only about one-third the population of the greater London area. But still, 1/3 the population being served by 1/8th the stores...

[bobafett_h]

I live in Brisbane, Australia. It is about the 3rd largest city in the country and currently has 3 GW stores (but there were more in the past). The population of Australia is a mere 10 percent of the USA, but about the same land area (several times larger than the UK). It seems as though GW tried to set up stores to cover the population based on travel distances previously which is clearly a poor way of doing it. A few stores have been closed, but a couple of new stores have still been opened recently in some parts of the country. These stores still follow GW's current minimal space, range and staff model which really does not work.

The largest store I know of is the closest one to me which was once in a large shopping mall, but moved to a far less busier location right across the road from the mall. However, in doing so, the store doubled in size and it now has several gaming tables a much bigger range and so on. It is closer to how GW's stores should be I believe, but because of it's cheaper rent location, it does not get anywhere near as many customers passing through and attracts far less potential gamers than it used to when it was a smaller store in the mall.

I personally have not bought anything direct from GW online or in one of their stores for years. The last big purchase of GW models or supplies I've bought in recent times was last year from Wayland and Maelstrom just before the embargo was introduced. Since then I've only bought items from a few Australian online retailers and various sellers on eBay. In the late 90s on the other hand when I was still in my teens and just starting in the hobby, I made the effort of travelling to my closest GW store to buy things on a regular basis. However even back then when online shopping was no where near as common as it is now, there were still times when I made big orders to foreign retailers just to save more money.

Online shopping and price comparing has been on the rise for more than a decade and GW have still not grasped the concept that people are more and more likely to look up prices of things online. Why bother travelling 20 minutes (or more in many cases in large countries) to the nearest store just to get it now, when you can order it from home and get it within a week for sometimes as much as 50% off (especially when compared to GW's prices in Australia)? It's not like miniatures are must have now items like what food is...

[MarcoSkoll]

Can we stop trying to shoehorn toy soldiers into completely unrelated analogies; especially ones which aren't even accurate.

The analogy was meant to be sarcastic, I doubt accuracy was its primary concern.
(Also, not as unrelated as you think. I'm an adherent of Dave Hall's Axiom of Automotive Analogy - in short terms, it's usually best to make an analogy to cars, because people tend to understand them better.)

The point that it was made about, even if the analogy itself was not accurate, was however valid. Fobbing off a large fraction of your end users because they're not the majority is perhaps the reason they're not the majority. Catch-22 and all that.

There are a lot of wargaming companies that "get" this and don't end up skimping on their rules. GW seem to think that parading around claims of being a miniatures company first and a game company second excuses their poor rules design. Explains, maybe. Excuses, no.

If there are much smaller companies who don't have the same budgets, several previous editions to learn from or experienced game developers (although GW have rather fewer of those these days), yet still manage to put out rational fluff and tighter rulesets - it's a sign that GW are doing something horribly wrong.

[eron12]

GW's massive market penetration derives from their (loss making) retail chain.

Delete the store network and GW will do well... For a few years...But its market dominance will quickly erode (not the it isn't doing so now, but it'll be faster), leaving GW much smaller in the medium term.

Long and slow managed decline would be better for the company than instantly getting rid of most of their stores.

I live about 200 miles from a GW store (the Chicago area). In the US that puts me close to a store. Heading the other directions it is well over 1000 miles before I would reach a store. I've never seen a GW store, nor has anyone I know. In fact I didn't even find out GW had stores until years after I discovered Warhamer.

[Orrinocco]

There are a lot of interesting points being made about the stores, but no-one is really going on to the point I was asking. What would be a good strategy to replace B&M stores, while maintaining their goal of a focal point for new people to see the games and get lured in

[ehlijen]

I'm not sure there is a way to do what the stores do for GW that wouldn't just be running their stores differently. By having a store chain GW states that:
-there will be a steady supply of opponents, as you always have somewhere you know the games will be played (not as certain for a gaming store that sells many games)
-that wargames exist (not something everyone actually knows)
-that they make pretty good miniatures (and you get to hold the shiny things)

Yes, the purchases might end being made online after all, but to do all that without stores would mean advertising in mass media (where the association with nerdyness still exists) and sponsoring gaming clubs (and somehow ensuring those clubs stay GW friendly). Not sure that wouldn't be more expensive for the same effect as running stores.

[blongbling]

Interesting thing about retailing of any sort is that there isn't an answer to the best way to do it; there are lots of ways that you can attempt to do it ranging from only online through to only B&M stores. The truth is that no one way of doing it is correct and you have to adapt to find what works for you. The key thing is making sure that you, as the retailer, stay where your customers are; as an example, in the UK there is a chain of greeting card stores that has recently announced that it is bankrupt and is selling off 350 of its 700 (roughly) locations. What they failed to do was adapt to a changing market place, with the likes of moonpig.com advertising heavily and offering a cheaper and better service why would you continue to go to a shop to buy...they missed where their customers were moving to.

Now lets look at the GW model. Fundamentally there are two things that GW needs to do: attract new customers and keep the existing ones happy, so how can they do this?

Historically in order to attract new customers you would have needed to have a store somewhere so that you can then get people to try the game and then get into the Hobby. Is this still true of the customers that GW wants to attract? are the tech savvy internet connected generation going to wander into a retail store in town, or will they do their shopping online? So should GW they switch onto other forms of attracting customers? Now they are already doing some of this through the licensing of computer games but are they going far enough and quick enough to be at the vanguard of the move to a more digital age, honestly I think not. So why aren't the doing it? Well GW has a belief that retailing is how to do it, their mgt teams all come from retailers, their history is retailing and their infrastructure is built around retailing and to move away from that is a big, business changing decision.

What about support for their existing customers? well we all know that generally "vets" don't like going into GW stores due to the way they function as recruitment centres so where do they go and what do they want? There are a couple of places that you can go as a vet, the internet or your local FLGS. On the net GW has an ok presence, with an ok webstore but is widely accepted to not be the best delivery tool that it could be, and functions as a shop rather than a website with all the resources that you would want. So there is room for improvement here as well but this also ties into the fact that GW sees itself as a retailer and not an on-line retailer, even though 10% of GW's T/O is through its webstore, they should take this as a beach head and generate something amazing. FLGS support, well we all know where this sits, restrictions on ranges, ordering and who can stock the product, in a failing attempt to try and drive business to its own website and retail chain.

Now this isn't a GW bash, they are doing a great job but I do feel they aren't moving with the retailing approach that ties into their customers. It is also worth noting that I don't think this change is needed with the other companies who have emerged onto the market in the last 5-10 years as their customer base is a very different shape and their business model very different.

[iamfanboy]

There are a lot of interesting points being made about the stores, but no-one is really going on to the point I was asking. What would be a good strategy to replace B&M stores, while maintaining their goal of a focal point for new people to see the games and get lured in

First of all, rather than trying to put a GW store in every possible location, make them more like the Battle Bunkers: big, central locations that can serve as the focal point of gathering for gamers from a broad area. Try to set them up as more a pilgrimage location, but place them carefully according to population density rather than by seeing what indie stores manage to sell the most product and putting a GW store next to them to drive them out of business. (It worked in the UK 20 years ago, but trying it in the US is part of their problem today!)

Don't put the hypothetical Battle Bunkers in high-rent, expensive locations like malls; instead, look for places that have lots of gaming room, lots of room for product displays, and lots of room to host monthly tournaments - the winners of which could be drawn to invitational tournaments.

Try to phase out the outlying stores not selected to be Battle Bunkers slowly, over six months; GW corporate SHOULD try to work out a system for helping people (possibly former employees) to set up indie stores, but they'd have to accept that such a store would not be locked into their product. It would not be a franchise, but the goodwill GW would earn by helping the new indie store open would help keep GW products as a central core of that store.

Part of that should be, of course, that GW's 'standards' are applied to the new store opening. GW should meet with Wizards of the Coast to see if they would be willing to help out on a program to get new gaming stores started to a reasonable standard. Not necessarily loans, but something that if the store fulfills certain standards (X amount of table space and terrain, proper displays, singleton cards for sale, etcetera) the new store can get discounts on products.

A price cut would have to be done on GW's products, which would probably involve rebating indie stores some amount, but if done slowly (with sales offered online and in Battle Bunkers) you'd draw back more experienced players. Not knowing the exact financials, I'd be hard-pressed to recommend the amount, but 70% of current prices would be my earnest recommendation.

That would put single human-sized miniatures at between 8 and 10 USD, 40k squads of 10 plastics at $25, tanks at $30-35, BIG guys like the dragons or the Araknarok spider at $50; prices would have to be lower than that for WFB otherwise no one will WANT to buy them in the quantities necessary for the WFB 8th Edition rules. Honestly, I'd rather the 10-man boxes stabilized at $20 (their plastics at $2 each seems reasonable considering the quality), but I do remember buying 20-man boxes of Cadians, Catachans, and Zombies when they were $20 just because I "might need them" (and sold them for rent money for more than that last year, yet still came in under their MRSP).

The whole Battleforce/Battalion box NEEDS to be overhauled so that each one has a self-contained and VALID 500-point force, with a list included so that the young kids they so want involved can leap in right after gluing stuff together. The box should include mini-books about the given army as well, but definitely lead to buying the main book as the box itself wouldn't include any rules for any unit outside the box itself.

Ok, I'm stopping here. For one thing, it'll never happen, so I have better activities to do than waste my time speculating about the impossible.

For another, it stopped being fun the moment I stopped imagining MYSELF in charge of GW's business plan, and put myself into Mark Well's personality, and realized that honestly, it seems like he doesn't want the company to be around in 20 years.

Oh, it'll be a slow decline, but it won't be arrested until someone else takes over, and the investors don't care enough to vote no confidence on how he's running the company.... hell, I'm not even sure how much of the company that he and his cronies personally control, so trying to boot him might not even work. *sigh*

Now I'm sad again. Must go watch ponies. Oh Pinkie Pie, u so random!

[lanrak]

@ blongbling.
I dont think any of the posts in this thread are a 'GW bash'.
(Maybe a GW corperate managment bash ,that IS deserved perhaps!)

Most people posting are doing so because they appreciate ALL the efforts the GW staff put in to enhance thier hobby experiance.
And dont like the shorts sighted , and self serving decisions the corperate managment make ,that they feel are are harming GW plc.(And by extension thier hobby.)

I totaly agree with you current GW marketing /retail strategy IS NOT in synergy with thier target demoghraphic.
And that there is not a 'perfect' solution.

But as most people agree that moving to a better internet presence coupled with improving LFGS support.(To allow a scaling back of B&M stores.)

And improving game play (change the focus of rules writing.)To ADD value to thier product and improve customer retension .

Seem to be a common aproved direction the fan base want GW plcto move to.

@Markoskoll.
Thanks for understanding my simple analagy , of how exelence in function generates greater positive word of mouth marketing ,compared to JUST relying heavily on subjective asthetics.(In products where function makes up a large proportion of the over all user experiance.)

[Bloodknight]

On the net GW has an ok presence, with an ok webstore but is widely accepted to not be the best delivery tool that it could be, and functions as a shop rather than a website with all the resources that you would want.

The sad thing is that the website used to be much better.

[bobafett_h]

There are a lot of interesting points being made about the stores, but no-one is really going on to the point I was asking. What would be a good strategy to replace B&M stores, while maintaining their goal of a focal point for new people to see the games and get lured in

I don't think it's possible to replace the B&M stores completely, but the model GW currently uses for those stores has to change. One of my earlier posts made reference to Apple, and their model for stores. I believe that GW could take a few pointers from them. Keep a few B&M stores, but make sure that they are done very well, with plenty of gaming/hobby space, good range of stock and properly trained staff who are more interested in helping than simply upselling your box of Chaos Warriors to a Land Raider Redeemer...

This is not all that GW needs to do. They need more of a professional prescence in other stores that are related to their products. This would include independent wargaming stores as well as places like toy stores and even department stores. A small gaming table with products displayed around the bottom of it, perhaps another standalone shelf with a few more items and at least one GW trained customer service rep can be placed in these stores. Apple does the same thing in various computer and electronics retailers. Many other industries also do this sort of thing such as cosmetics where as rather than renting out an entire store, they get a small space in an already established store to market and sell their products.

Taking that one step further, GW could also borrow some ideas from the likes of Nintendo and Microsoft who travel to various shopping malls with portable setups of their gaming consoles to demo a few games. GW could do the same with their wargames on small portable tables and miniatures. This would cover a lot more area and more customers at a much lower cost than trying to set up stores in as many locations as possible. Also, reviving some of the older and smaller game systems, and distributing them via toy and department stores would also get them more product exposure. Space Hulk games for example would be quite easy to use as starter models that could be expanded on later with more minis to larger 40K games.

The sad thing is that the website used to be much better.

Yes it did. It used to have far more useful content and much more of a community feel to it. Back then it also used to be easier to contact people at GW about things like rules questions and other hobby advice than it is now. It felt more personal when your questions and feedback were actually responded to and that you, as a hobbyist might actually be able to contribute something. GW need to try to get back to that kind of thing and make the game development and gaming sides of things just as accessible as the online store...

I also believe that all of the rules for GW's games need to become available for free online. The printed rulebooks, army books and Codexes can continue to be published and sold, but that would mostly be for the artwork, fluff and convenience of having a hard copy. Doing this would potentially make it easier for rules updates to come out more often and instead of issuing Errata and Amendments like they do now, they would just release an updated version of the PDF online...

[ehlijen]

Yes, if GW could do what Apple, MS and Nintendo do, they'd be better off. But they don't have that kind of money. Wargaming is not as popular as videogaming, let along computers in general. Where Apple can get a nice big prime location store, GW will need to balance size, quality and visibility. They could just build huge battlebunkers in out of the way places, but then they'd rely on enoug people knowing about it to fill it. One man closet stores in the middle of a big spotlight as the other extreme are of course no better (and probably worse). But a certain amount of high street exposure is needed to get new people to notice the store at all. GW isn't just targeting wargamers, they are targeting the general population and are hoping to find those who didn't know they were into wargaming yet.

Apple, MS and Nintendo don't need that, they are omnipresent in the media. GW enjoys no such starting help and probably can't afford to pay for it.

[Carlosophy]

As I mentioned in another thread, getting rid of White Dwarf and replacing it with improved free web content would be a good idea, as well as offering the army list sections of army book free so customers can trial points values before commiting to purchase. Improved web traffic would mean more people likely to click on the mail order banner.

GW don't really need their B&M stores at all, really. The hobby has always been based on word of mouth for attracting new players and I don't see that changing if they took away their stores.

Of course, a Saturday Morning cartoon set in the 41st millenium would also help