We hear a lot about the demise of the hobby and certainly the demise of the brick and mortar hobby shop. Of course the internet, China, Japan, video games, expensive kits, lack of youth interest, the economy, oil prices, and the way the winds are blowing that day are a few the many reasons for this demise. Maybe some of this is true because I think I can name off at least ten hobby shops that I visited at one time and no longer exist.
But take a look around your regular retail areas: plazas, malls, downtowns… all you see are franchise or corporate stores. This is more than the local hobby shop; In a way we are seeing the demise of small/independent retail.
It is far beyond the scope of a simple blog entry to go into the reasons why this is. There are some great explanations here, here and here. However, there are small local retailers who survive and some thrive in this internet era. How do they do it? Again, if you are interested there are some great discussions here, here and here. I can summarize these articles with the following points:
|Successful retail stores:
What About Hobby Stores?
We are definitely living in the platinum age of the scale model hobby. Of course the hobby has changed from one regularly found in every toystore, drugstore and department store to one that is exploding with releases of every description from all over the planet. But despite this explosion of the hobby, we are seeing many hobby stores close.
But some of them continue to provide a great customer experience.
The Hobby Centre is Bucking the Trend
In this first article about bucking the trend I am happy to talk about my local hobby shop, the Hobby Centre in Ottawa, Ontario. It has not only bucked the trend, it has actually expanded to meet the needs of its customers.
The Hobby Centre’s physical store located at 33 Roydon Place in Ottawa, Ontario. This is not the Hobby Centre’s first location. He started the store over 30 years ago and I fondly remember visiting that new store (one of the few fond memories from my junior high years) and being excited there was a hobby store located within biking distance from my home!
A bit of background
The Hobby Centre opened in May 1986. The owner, Bill Chappell was a former employee of the iconic Hobbyland store in downtown Ottawa. Back then there were about 14 dedicated hobby stores, plus hobby departments in many chain stores. That is how strong the hobby market was back in those days. Over 3 decades later, there are less than a handful of hobby stores and little to no presence of hobby kits and supplies in chain stores.
Through the years they have kept the ‘general hobby store’ model. It’s strength is plastic kits but they also have a healthy amount of rockets, HO & N trains and diecasts while expanding slowly in Radio Control, Metal Earth and 3D puzzles. According to Bill: “Where there’s demand, a viable market and it fits our product mix, we’re open to it!”
Just as important as the retail space, the Hobby Centre also exists online at:
Bill agreed to answer some questions I had about his store and the hobby business in general. Below he offers some interesting insights into running the store and figuring out what customers want:
1) Thinking back to when you first started in the hobby business, what are the biggest differences in the industry and your customers?
Bill: Back in the 80’s it was pre-internet and video games were not close to what they are today. Every kid got a model or models for birthdays, Christmas and other occasions and it is safe to that up to a certain age, young boys (for the most part) built models until they got cars, jobs families and all that life has to take up one’s time and money.
(By the way, we’re seeing a renaissance of those 1980s people coming back to the hobby)
Radio control cars (led by Tamiya) were something every teenager had or “needed” in the 80s. Fantasy miniature painting was HUGE. However, most or all of these things took a hit from “electronic immediate satisfaction” as a pastime.
The lack of Canadian distributors is something we have to deal with. When a Canadian firm imports into Canada, we can sell for less than the US retail (when you factor in the exchange rate). When we can’t you can add the exchange rate on top of that price. The former giants of the hobby industry in Canada are now gone: Hobbycraft, Academy, Kroeger, Udisco (before they went retail), Sealand/Modelcraft. A number of smaller specialty importers are gone as well. There have been a few new ones popping up and we are trying to support them as it makes our position in the market much better.
We have opened more supply lines than ever into the US to insure we get products our customers want and get them in a timely fashion. Believe it or not, timing is often more important than price in this hobby.
2) At what point did you realize that the old “LHS” model was not going to work for you? Was there a specific event? Or was this more of a combination of things?
Bill: We started at Bank & Heron Road and had 2 (very affordable) locations there for 10 years. I then opted to move to “greener pastures” in an upscale, brand new plaza in a younger neighbourhood.
I relocated the store from a relatively inexpensive retail location to an expensive one in the subburbs in order to “follow the youth.” However, I quickly came to realize that the “youth market” was centered around collector cards, fads and comic books in the 1990s and 2000s. It was at this time I noticed our regular hobby clientele was shrinking and maturing.
Social media helps guide us: the ‘buzz’ on there can make or break a new release. Talking and listening to customers will tell you most of what you need. Most of my clients know what’s going on before I do and I appreciate them keeping me in the loop. Knowledge itself is a big part of the hobby for enthusiasts.
3) What did you do change? I know that you have significantly increased the size of the store in order to better house all of the models the store purchases from collections and estates. Tell me about the changes you have made to your physical store and your general business.
Bill: I made a lot of changes!
- eBay has been a game changer. I have had an ebay store since 1999. This allowed me to expand my market worldwide. It also allowed me to carry more inventory, turn that inventory over faster and sell things at higher prices than I normally could get in my local market.
- Direct Email marketing. I created email lists that allow me to email customers and inform them of new items that we have or that we can get into the store. This has had a huge impact for the store.
- Community. If you love hobbies you are part of a “thing”. Our store could be viewed as a big “clubhouse” where we nurture that community. And that community supports us as we do its members. The store hosts regular model build sessions for various groups such as Gundam, Cars and military modelers. We also host a series of skills demonstration sessions – typically during the winter months.
- Web sites were a real pain in the early going. Developers wanted big bucks and the whole thing was expensive only to find out that just having a web site is just like having a store: Without promotion it’s just another site. Now retailers can afford a really good site that works. Even if we do not sell a ton on ours, it brings people into the store. Win-win.
4) I see your store as a combination of different “stores” (physical store, online store, ebay store, travelling show store) what are the rough percentages of your physical store sales vs other streams?
Bill: It is 80-85% store, shows are maybe 5%, the rest is online sales.
5) What different ways are you promoting your store compared to when you first got started
Bill: Attending hobby related events has always been a big part of promoting the store. Over the years other hobby stores have closed and this has opened an opportunity to move into shows in the bigger markets like in the Greater Toronto Area. In addition to that we are actively using eBay, the hobcen.com web site and social media platforms. We are on Facebook and it has had a big impact for the store. Making Hobby Centre videos on Youtube is my current project. I really respect what Andy’s Hobby Headquarters is doing.
6) How are you generating foot traffic into your store? How are you getting return customers? Do you buy into “the customer experience” and how are you providing one?
Bill: We generate traffic with the web site, hobby shows, social media and eBay. We no longer bother to have a Yellow Pages ad anymore (that was HUGE back in the day & expensive!)
We try and do our best for everyone that comes in or contacts the store. I have learned that no matter what, it is difficult to meet some customers’ expectations but that does not stop us from trying our best.
Through social media we have been able to put people on notice when we have a large influx of models coming in (MAM: usually from collections/estate purchases by the store). The gnarly stuff goes up in the eBay store and the rest goes out on the floor. If but our operation were a wee bigger we could put the time and effort into actually cataloging and tracking this stuff….oh to dream. Our youtube video announcing the last big collection got a lot of buzz and that was encouraging.
Otherwise, our customer email lists have historically been a huge factor in communications between us and our customers.
7) Where do you see the hobby business going?
Bill: I see the return of a lot of people who have time and money to play in things they put aside through their careers. I see a lot of young people (millennials?) wanting to do ‘hands on’ creative things. The trick is to tune with what THEY want. For example: Gundam is real. Kids and younger builders don’t want to build 55 Chevs and 69 Camaros. But they like tuners….. The key is figuring out how to attract them.
As far as the hobby business in general, promotion is pretty much only done by the retailers now. When’s the last time you saw a model ad anywhere other than a hobby specific publication (Back in the day models and other hobby products used to be advertised in comic books and more mainstream magazines!)
There are ways for the LHS to stay open, to stay relevant and to be profitable. Like other small retail successes, the Hobby Centre has adapted to a changing market and continues to find ways to keep model builders coming back to the store. Area modelers that I have spoken with are very happy to have a store like Bill’s Hobby Centre within a 10 minute drive and Bill gives us plenty of reasons to keep coming back. I believe he has only scratched the surface in using social media as a way to promote the store and to build a connection with his customers.
One thing I did not think of: The importance of timing in the hobby business. That definitely something to explore in a future article.
So what do you think? Do you think there is still a future for an agile LHS in this internet age? What is it that you like about your LHS or the LHS experience that keeps you coming back? And lastly – Do you know any other successful LHS stores and what they do to buck the trend? I’d love to hear from you!