Thursday, July 25, 2013

The Ice Berg Cometh (Kickstarter)

Everyone's talking about the cancellation of The Doom That Came to Atlantic City Kickstarter project. It's hardly the first gaming Kickstarter to crater. I should know, with 21 projects under my belt, I've got two failed ones in my queue. That's about a 10% failure rate for me. One study reports that the overall Kickstarter failure rate is 3.6%.

In the scheme of things, that's probably not so bad. About 25% of new businesses fail in the first year, something that Kickstarter is supposed to assist with, since it gathers up the resources before the "company" begins serious production (The Doom attempted to establish a company with their Kickstarter cash, rather than just making a damn game).

Even after a company gets off the ground, a failure rate of 3% is average. One secret about small business is there is no year when you're not at risk, when you get to relax and say "We've made it!"As a Kickstarter supporter, it wouldn't be unreasonable to expect that 3.6% failure rate to be an ongoing threat, regardless of publisher.

So here is where I point out that the many thousands of years old system of production of goods has a reason for existing. There is a reason that if you want a pot, your entire village doesn't pay the potter up front and wait six to twelve months for him to make pots and deliver them late. There is a reason why the entire village doesn't trust the potter with their hard earned money. He's just a potter, not a damn saint. How many potters know how to handle a village worth of money? What percentage of people are likely to steal no matter what (security experts will say 10%)? Or steal if given a really good opportunity (those same experts say 80%)? So if you want a pot, you should really just go buy a pot. Or, you know, get the pleasure center of your brain tickled constantly with pot updates and new features the potter has added to your fancy, pot that you'll certainly get later than you want, if at all.

Kickstarter is not an investment, which is something you expect a return on, as in profit. What it has become is a one sided contract offering a way to pre-order stuff, with a 3.6% failure rate, 75% late delivery rate, and no recourse or consumer protections. It fails the friend test, as in it's not something I would recommend to an uninitiated friend.

When I charted out Kickstarter projects on Boardgamegeek, their ratings were average, no better or worse than what's on the shelf at the store (and some people believe this is inflated). It's possibly a great way to get things you couldn't otherwise, and there have been some notable bargains (that nearly bankrupted their established backers), but overall. lots of risk with average results.

My personal experience is that items from established publishers on Kickstarter tended to get produced and tended to be of sound quality, but they also tended to be on game store shelves at or shortly after the time of release. Games from unknown publishers have been alright or disappointing, or not ever delivered, despite really cool looking Kickstarter initiatives. But really, isn't Kickstarter supposed to be about supporting those people?

Tuesday, July 23, 2013

Changes at the Store

We're upgrading our entire point-of-sale (POS) operation with new store fixtures and a Mac based point of sale machine three weeks from today. The fixtures will replace our 9-year old counter and register stand. The counter is gouged, permanently stained with super glue, and irreparably grungy. The register "stand," stands only because it has no room to fall over. Perhaps it needs a new name, like Register Lean.

The register stand was designed for a cash register, not fifty pounds of point of sale machinery with a rats nest of cables. One shelf is held on with duct tape and the whole thing was made unstable on day one by boring holes through it. The new fixtures are "professional grade" from my favorite fixture company, Newood. They cost about four times more than the last batch of fixtures, but everything from Newood looks new many year later, compared to bargain fixtures that start to wear out after a couple years (along with collapsing on customers and other horrors).

New counter and register stand by Newood

The new point of sale system is Lightspeed, a Mac based system you may have encountered at the Apple store. Lightspeed is one of the few systems as robust as our current Microsoft Retail Dynamics system, but without the irritation of Windows-based computing and with a few improvements. Retail Dynamics has grown stagnant over the years, with little to no improvements or added features, allowing companies like Lightspeed to step up with new innovations.

Lightspeed especially shines in mobile POS, meaning when it's busy, staff can grab an iPad and help people in line, or sell a game or event voucher right from the sales floor. If you've seen the store lately, you know iPads are everywhere, in a variety of roles, so it's hardly new technology for us. 

Lightspeed also excels in the area of "ease of use."  Special orders and back orders are easier, for example. Customers can choose to have their receipts emailed to them, and once in the system, it happens every time they use their credit card. The interface is stunning and just a bit easier to use. Finally, there's a very nice E-commerce module that might finally allow us to have a web presence, if we can come up with a viable model.

What are we losing? Our Paladin Club customer loyalty program is very specific to our old POS system, so that won't be moving forward. I announced we would be moving away from that program three years ago, but we grandfathered in everyone who had a card. Now there's actually a technical reason to let it go. Everyone who has a card will retain their points and will have their points rounded up or down for redemption. There's no need to run out and use your points, but you just won't be accruing new ones as of mid-August.

Will we have another club program? Perhaps something, but I believe these programs are really, really bad for the business. The amount of money given away is tremendous, and even by grandfathering in customers, the costs remain high. Plus, with so many new customers, we have a two-tiered system of sorts, which isn't really fair. You can go back to my three year old post for a fuller discussion of this.

Why the big change? Point of sale companies want a better revenue source, as a company like Microsoft hasn't seen a dime for us in over five years. They now have mandatory maintenance programs and ours was long out of date. When asked to pay up, my response was thanks, but I'm fine. That worked out alright until our POS consultants stopped supporting Retail Dynamics.

The new consultants wouldn't talk to us until we were current on maintenance, which would have cost thousands of dollars. That opened the door to exploration, and with my personal switch to Apple products, it made sense to consider a Mac based POS. This was important to do now because our system is creaky and without a support contact, a POS failure could put us down for days, with a business system that makes money measured by the hour. As a former IT guy (really no such thing, like being a former Marine), having such a critical system without support was not acceptable.

On the whole, with better special ordering, back ordering, crowd management, and the future potential of an online store, I think this is better for not only the business, but for customers.

Friday, July 12, 2013

Wheaton's Law

When I first got into the game trade, I recall going on a tirade on the GIN, the game trade's message board, about some company that had annoyed me. As it turned out that guy was right there, rather than some faceless corporation, and I learned first hand that the game trade is a very small world. You might be used to being angry at big companies, and spouting off as your hobby, but the game trade is a bit more nuanced.

When dealing with the game trade, remember we're real people, we're right there. The gal manning the Twitter account or Facebook page is more than likely the gal in charge or not far removed from her. Not only might you wish to be a bit more civil, but you also have the power to change and direct that company. Good companies are always open to suggestions and listening to their customers. There are certainly companies I rail against, but my disdain is loudest when my access is limited.

Pokemon USA, for example, pisses me off to no end, partly because they're a faceless corporation with stupid policies, but mostly because I don't know anyone there. I can scream about them all day and nobody will email me or call me. If I send them an email, I'll often get an auto reply. Nobody there cares about anything I say. But other companies with similarly inane processes and policies can at least produce a human who will talk me off the ledge, or at least provide a point of contact for my disdain. So work with them, us, me. We're listening and we're often willing to discuss reasons behind what we do.

This is also true with "competing" stores. They do not need you, the customer, to be their heavy hitter. Lately store owners have been discussing harassment from competing store customers on their Facebook pages or those erroneous Yelp reviews (like gamers care about Yelp). This seems to be happening more often, sometimes without the competing owners knowledge, but occasionally a sleazy owner will encourage it. Follow Wheaton's Law.

Most store owners actually get along with each other quite well, even when they compete directly. Who the heck else can understand the crap we go through? Bad blood like this puts up barriers to cooperation, and cooperation, or at least willful neglect, actually helps customers. Do you want events on the same day at every store so you have to chose or do you want them spread out so you can play all week? Do you want me to sell the same thing as the other guy, but deeper and cheaper? Because that's what nasty competition looks like, and it's not necessary or helpful. You don't need to build bridges (I've seen customers try that), but you certainly shouldn't be burning them.