Retail Store Move FAQ

There have been a few questions recently about our move to a retail store, so in an effort to reduce repetition on Elise’s part, I thought we’d just write this post.

What’s your address?

187 East 11th Ave., Vancouver.  Yes, it’s changed slightly as Vancouver City Hall decided to change it.

When is this move happening?

In late-February with our goal of having a soft-opening early March. We are planning on much of the move happening in the week of Feb 20th, though we are hoping to do it in parts to reduce disruption.

Do you need help with the move?

Yes! If you would like to help us move and are free that week, e-mail us at support@starlitcitadel.com.

Are you going to raise prices at the retail store / have 2 tiers of pricing?

No. There is no plans to raise our prices or charge more at the online store / B&M store.  Our prices will stay the same.

Why are you turning off the reward points program?

The short answer is that we are facing issues with integration of the reward points system with the POS software that we intend to use.   In addition, it creates a 2 tier system where customer’s who order online gain the benefit of the reward points while customers who order in-store don’t.   As such, we’ve decided it makes more sense to just remove the entire system and eventually turn it off entirely.

Can I still order online and do Local Pickup?

Yes! We are not turning off this option.  Of course, if you are swinging by, you might as well just order in-store, customers are more than welcome to decide how they’d like to purchase products.

What is another customer picks up the game I ordered? Who has precedence?

In-store customers will generally have precedence over online orders (i.e. if a customer is holding a game in his hand, we aren’t going to tear it out of their hands just because another customer ordered the copy online).  However, we intend to do periodic processing in-store to ensure that products ordered in-store is removed from inventory, reducing issues like this.

Will Gift Cards continue to work?

Yes. We’ll even be looking at creating physical gift cards that customers can purchase and give to others, though that might take a little longer.

What are your hours?

Currently the plan is to be open 10am to 9/10pm Mondays to Sundays.  We’ll adjust as we see how traffic develops and cut / reduce hours for days when things are particularly quiet.

Will you be running events?

Uncertain at this time but unlikely.  We will only know when we have completed the move, but currently, it looks like we will not be able to fit sufficient tables to host events.

Space Confirmed – 185 East 11th Ave – Unit B!

After months of quiet work, we’ve finally confirmed and received our business license from the City of Vancouver.  We can now inform everyone that we’ll still be in the general vicinity of our current location but we will be operating as a full retail store. Here’s a map to our new location as of (tentatively) March 1st, 2017.

This new location is a basement location right under the existing Rollergirl.ca store.

The Plan

The current plan is to shut down operations late February and move and complete set-up before March 1st. At that point, we’ll host a soft opening while we iron out the details of running both a physical store and an online store.  The current expected hours of operation will be 10am to 9pm 7 days a week, with adjustments made as we work out traffic at the location.

We currently believe that there will be space for demo and gaming tables to be included in the store.   If that holds true, we have every intention of hosting regular game nights at the store.  However, we can’t promise this will happen until we finally move in and check how much space we will have used.

Photos of the location will show up once we actually move-in and potentially a longer post with pictures of the before & after.  Let me know if you have any questions!

Warehouse or Retail Store?

Game LibraryWe are coming up on our end of the lease fast and while we’ve made the decision that we will be moving to a new location as our rents have now increased to a point that we no longer think it’s worthwhile to stay, the question we are still working our way through is whether to go full retail or stay as an online store.

Warehouse

Continuing to run a warehouse makes a lot of sense in many ways.  There are some major pros including:

  • well optimised polices and procedures
  • ability to take on more and larger Kickstarter projects
  • potentially branching into other non-related product lines in ways that don’t create confusion among our customers (e.g. selling sporting equipment on a new website)
  • lower cost (we can get warehouse spaces for cheaper than what we are paying right now, so we’d actually drop our cost!)

The Cons though are somewhat more nebulous

  • new location likely to be less central significantly
  • growth has to come from new categories as our gaming category has slowed
  • potentially being locked out further by publishers
  • it’s boring…

Retail Store

Going with the retail store, things get a bit more interesting for the future, with some of the pro’s including:

  • new revenue streams from snacks & drinks & events
  • ability to access and run events / games likes Magic the Gathering and miniature games
  • increase in sales to casual drop-in’s and potential increase in sales from impulse buying of our geek products
  • significantly more options for PR and social media outreach

However, there are some major cons:

  • significantly higher lease cost (we’re looking at least another $4,000 a month at a minimum, more likely $5-7k).
  • new staff and staffing hours would be required.  Approximately $3k more in terms of staffing cost per month
  • loss of revenue from Kickstarter projects.  We probably could handle the smaller projects still, but the larger projects would be difficult (i.e. we couldn’t quote on projects over a few hundred games just due to lack of storage areas for them)
  • new capital requirements for shelving, gondolas, POS systems, etc.  At least another 5 – 10k depending on how nice we want to go.
  • potentially sub-par location.  We need a minimum of 2,500 sq ft and are probably looking at 3,000 up to 5,000 sq ft.  There just aren’t that many locations of that size in Vancouver, especially in retail and for the prices we can afford which would raise the total rent even higher
  • too close locations are another major issue as there are so many game stores right now, finding a location that isn’t too close to an existing store is another problem.

There’s also a rather concerning trend in real estate pricing.  In general, commercial pricing seems to run 2 – 3 years behind retail pricing, so if there is a drop in sales in retail pricing, we might expect a price drop in a few years which means that any lease we sign right now might be on the high price.

The Lower Mainland Game Store Density

I just learnt on Thursday that another game store is opening in the Lower Mainland of BC. By my count, that puts us at about 30 different game & comic stores in the Lower Mainland; not including big box stores that carry games as well. If you look at just the GVRD; it drops down to 28 stores for a population of 2,463,700. That works out to 1 game store per 88,000 people. More interestingly, if you look at just the Greater Vancouver area, you get this distribution:

 

Authority Population No. of Game Stores Population / Game Store
Burnaby 223,218 6              37,203
New Westminster 65,976 1              65,976
North Vancouver 84,412 0 NA
Richmond 190,473 2              95,237
Surrey 468,251 1            468,251
Vancouver 603,502 7              86,215

 

Common ‘knowledge’ in the industry (from what I recall) puts the number for a viable game store at about 50,000 at a minimum. Numbers jump up and down depending on the type of population (lots of college kids, tourist town, commuter town, etc.) and of course, other minor things like rent, salaries, etc.

So, if you assume that is correct, if I were going to open a store in the Lower Mainland I’d consider either Richmond or Surrey or North Vancouver just from the above data with Burnaby a far last.  Of course, there’s a lot more to take into account – demographics and salaries, transportation and the like but it’s certainly an interesting statistic.   Maybe we should move the offices to Surrey the next time 🙂

Community & Co-Operation

It’s interesting watching B&M stores and online stores in this space. There’s definitely a difference in the way community & co-operation happens between / among each other and competition.

Brick & Mortar Stores

Brick and mortar stores, for the most part, are quite friendly to one another – especially if said competitor is in another city / state.  It does little harm to them if another competitor opens up in a city an hour away – most stores draw their clientelle from within 20 – 30 minutes drive.  So, you have things like GAMA happening, where talks on how best to run your store occurs.

Best practices in one store shared among others makes the entire industry stronger.  It’s kind of fun to watch and heartening to see – and it’s a lot less lonely than working out here on the fringes.

Online Stores

That’s what we are, online stores – fringe players in the market.  Not only based off size – most of us aren’t that big, being tiny little stores; but also because there’s no camaraderie among online stores for the most part.  The same way you rarely see competing stores in the same town sitting down sharing trade secrets, you don’t have online store owners talking to one another.  Unfortunately, the web makes all of us part of the same village – and that means we’re all competing against each other.

It’s definitely true for us Canadian stores, a little less true for Canadians to US stores (they ‘steal’ ‘our’ customers) and a lot less true for those based in other countries.  It’s not to say I don’t talk / discuss matters with other competitors (see this entire blog!) but there’s always things I’m going to hold back on.  There are areas that I just don’t discuss because I see it as being part of our ‘edge’.  While I don’t think there’s anything we do that a smart competitor could not figure out themselves, it’s not as if I want / need to be laying it out for them to read either 🙂

It does mean that it is kinda lonely though.  Sure, I could talk shop with other business people (and I do); but our trade is such a strange one that they sometimes don’t get it.

Across the Lines

What about B&M and Online stores? How do those interactions go? For the most part – they don’t.  Online stores are considered ‘the bad guys’ by a large number of B&M stores in our view.  We are quietly shoved to the side and generally excluded from a large number of conversations.  Other conversations, we just don’t care about – running Magic Tournaments aren’t a factor for us, nor will it ever be.  For most B&M stores, the difficulties of dealing with Canada Post, online customer service and shipping is just foreign to them.

The point of this post? I doubt I have one, beyond perhaps – if you’re going to launch an online store; be prepared for it to be much more lonely.

Adding Value: Online Stores

I’ve recently noted a few comments and questions directed at online stores, most of which boil down to – what’s the value of an online game store? What do we contribute that another entity, whether it’s a physical Bricks & Mortar store or a publisher could do themselves.  Here’s some areas of value that we, as an online game retailer add:

Reach

Online stores add additional reach over and above what a B&M store or a publisher website is able to.  Whether it’s the reach across national lines (Canadians that US publishers can’t reach easily) or to small towns (it’s generally accepted that towns with a population of less than 50,000 are difficult for game stores to thrive in), online stores expand the market.

In addition, market saturation is never 100%.  I lived for years in Vancouver without knowing of Drexoll, yet they are a firmly established B&M store.  Online stores, in many ways, are really ‘easy’ to find.  Or should be at least…

Specialisation

Publishers are good at publishing games. B&M stores are good at running B&M stores.  They aren’t necessarily good (or should be!) at running an online store, shipping games to customers, online customer service, etc. For a publisher, there’s an order of difference between managing 20 to 30 distributors to managing 2000 – 3000 customers.   For B&M stores, the added complexity of managing 2 inventories and online customer service can be extremely difficult.

Sometimes, when you try to be / do everything; you end up being good at very little.  Slow shipping, missing inventory, bad customer service, annoyed retailers & distributors, etcetera.  Sometimes, it’s better to focus on what you are good at.

Convenience

Online stores provide a level of convenience for those who either do not want to, or are unable to purchase at a B&M or publisher.  We ship games direct to your doorstep (or office) and allow customers to shop at their leisure.  Want to purchase something at 2am in the morning? Sure – no problem.  It’s the kind of convenience that some customers want.

In addition, compared to publishers we provide the convenience of consolidation.  Rather than purchasing from a dozen publishers to buy a dozen games, it’s easier (and better!) for the customer to find / buy from 1 location. That doesn’t even include things like accessories (dice, dice bags, storage solutions, etc) that we carry that a publisher would not.

Lower Prices

Of course, there’s the part where online stores are willing to sell games at or below MSRP.  However, online stores also stock and sell games from multiple publishers, thus being able to sell and ship more than 1 game from 1 publisher.  It brings the overall cost per game shipped down, often quite significantly – leading to lower prices for the customer again.

As an example, the base cost of shipping a game from BC to Ont is $13. Add 6 games, it still only goes up to say $18. So, cost per game shipped is like $3. It’s rare you’d get a publisher with 6 games that a single customer would like to buy.

And more

Of course, all the other ways of how we compete play in too – all the things that we do to be competitive with other online stores are also things that differentiate us from a B&M store or a publisher run webstore.

Mixing & Matching – adding a new channel

One of the common suggestions I come across is for a retailer to expand either Online or into B&M if they are online only.   It’s an interesting idea and has some merit in that you expand your sources of income by expanding your services and reach.  However, there are some issues that most individuals who make the suggestions have not considered:

Focus

When you launch both an online store and a brick and mortar section, you actually double your workload.  Sure, certain things are shared (purchasing, accounting – maybe); but many of the tasks are very different.  With running any single side a full-time job (and more), you end up having to take shortcuts with either side leading to a lack of focus and efficiency.  It often is much more lucrative to focus on what you do best already rather than doubling your workload for marginal gain.

Additional Cost

There are additional cost to launching either side.  As an online store going to bricks & mortar, you have additional space requirements for  the B&M location, you can’t space your shelves as tightly or pack your games as firmly, you pay more per sq ft generally and of course, you have to pay for additional staff.  As a B&M store going online, you now have hosting costs for the website, additional box & packing material for shipping, additional time cost for shipping and box pick-up and an increase in customer service e-mails.  All of these add on to your work load, and often with minimal increase in revenue immediately.

Inventory Management

One of my constant nightmares is inventory management when you are effectively running 2 stores.  The question then becomes whether you seperate the B&M and online inventory (thus never allowing over-ordering) or you host a single inventory.  Now, hosting a single inventory sounds great – till you realise that it’s possible for a customer to walk up to your counter holding a game that was just sold online.  Now what? In either case, you are annoying someone.

Starting Over

Launching a website or a B&M store might garner you some additional sales from existing customers, but mostly you’ll just shift around how they order.  That might be fine for convenience sake on the customer’s part; but that obviously doesn’t provide you with new revenue.  As such, you end up starting over again having to build up new customers, new sales.  Sure, you might have some of the same infrastructure already but you’ve just added a bunch of cost without the revenue stream.

Competition

Competition is strange.  Sure, as an online store we compete indirectly with every B&M store in the world.  However, the customers who buy from us are often not the customers of a B&M store -they have different needs, different desires and vice versa.  Now, adding a new channel puts you in direct competition and you might find that you just aren’t up to it.  A B&M store might not be able to price well enough, ship fast enough to meet the desires of an online market.  An online store might not be able to provide sufficient events and game space for walk-in clients.  Having to compete on the same playing field generally means adding additional cost & procedures.  And if you refuse to play that game, you might not be successful at all – which then leads to the question of why bother?

Online vs Brick & Mortar

When starting out a game store, one of the first questions you run into is whether to create an online or Brick & Mortar store. There are, in my view, numerous reasons to choose one or the other.

Skill Set

Let’s start with perhaps the most important aspect – skill set.  The skills and knowledge required to run a B&M store compared to an online store are quite different.  In B&M, you worry about shrinkage, inventory, merchandising and upkeep of the physical store.  Online, you deal with website infrastructure, online marketing, inventory and logistics and shipping.  There is some overlap – customer service, purchasing, accounting but at times the information you receive and the processes are vastly different.

Depending on your previous experience and occupations, you might arrive with differing levels of knowledge in each area that would push you in one direction or the next.

Capital

Capital wise, it’s much more viable to start an online store with much lower capital amounts.  Mind you, I am not saying you’ll succeed with an extremely low capital amount but it’s possible to launch an online store that way.  In fact, if you use eBay or Amazon only where the focus is individual sales, you could probably make a small profit selling only a few games.

With a B&M store, that’s just not viable.  At the least, even a small hole-in-the-wall requires a commitment of a lease and inventory to stock the location sufficiently to make it viable.   As such, capital requirements are much lower.  In addition, with an online store it’s possible to create a decent store if you have the skills to do it yourself.

Time Commitment

Here’s another thing about going online.  For the first few ‘months’ of launch, you could potentially work part-time for the company since you are unlikely to have that many orders to ship out.  This is much more difficult with a B&M store as you still need to staff the store even if it is empty.

In addition, you can outsource a large chunk of work with an online store.  Everything from shipping and logistics to marketing & customer service can be outsourced when things are done on the Internet.  Obviously there’s a degradation in quality and a cost, but if you are willing to eat the margin hit, it is viable.

Personality

Here’s one I don’t hear as much but plays an important part.  Not everyone is suited to running a B&M store or an online store.  B&M store’s require a more extroverted personality, individuals who are happy (or least able) to interact with individuals on a daily basis for 8 – 10 hours a day while staying pleasant.  Online stores require disciplined individuals.  There is very little external stimulus to force you to work, so the discipline required is very similar (in fact, can actually be) the discipline required for telecommuting.  If you can’t do one, it’s really going to be hard to the other.

Competition

Local competition in the city you are in can dictate whether or not a B&M store is viable.  If your town / city has no game stores, your local competition is extremely low, making a B&M store much more attractive than starting such a store where there are already 2 or 3 existing (and strong!) competitors.

In addition, the landscape of online automatically places you in competition with the big boys.  You do not get a chance to ramp up slowly, your store is automatically compared to much larger, more established stores.  With competition only a click away, you have to put your best foot forward from the start, leaving little time to work out kinks in the system.  On the other hand, with little to no marketing your online store will never have customers due to the sheer number of competitors.