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Hornby Stores?


Moccasin

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Interesting social media post from Hornby today.
They're asking those near to Margate, or willing to travel, and with specific model railway skills which they would be willing to publicly showcase to get in touch.
It could be something or nothing but I do wonder whether they’re seeking people to give demonstrations of model techniques at the re-vamped Visitor Centre. Part of that experiential retail they are planning maybe?

 

 

My local model shop has speciality days all the time, scenic demos, digital workshops, kit building, specific group running days like 009, narrow gauge, garden railway, O Gauge, etc. All very well supported. I used to demo Hornby kit at their digital days which were usually supported by the local rep and occasional big wig from Hornby, as well as Bachmann, Specialist retailers like Train-Tech, Coastal DCC, etc. I would write Train-Tech Smart Screen messages for anyone who bought one on the day, in exchange for a small donation to the shop chosen charity - usually McMillan.

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I know nothing about manufacturing or retailing but I am interested to see the wheel apparently coming full circle. Back in the days of rose tinted spectacles, manufacturers made stuff and sold it to retailers. The retailers sold it to Joe Public, and dealt with any hassle arising from those sales. Retailer and manufacturer made a profit. Then the manufacturers got the idea of cutting out the retailer middleman and selling direct to Joe Public. Suddenly they had to learn a whole lot of new skills about how to sell stuff, how to deal with Joe and how to compete with the new breed of on-line retailers. Some appear still not to have learned those skills. Many smaller retailers went pop and the manufacturers find that the profits they foresaw are eaten into by retail staffing and system costs. Some are now coming up with "new" ideas like opening shops - Oh Wow, what an innovation! It reminds me of the conference of transport experts where one delegate came up with the idea of a dedicated freight only road. Another promulgated the idea of a number of large freight trailers pulled by a single tractor unit - much more efficient. Generally agreed to be well worth further study until it was pointed out that such already existed, called a railway. I can't wait for the next instalment of this real life soap.

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Selling to the public is hassle but on paper to a boss trying to save money it looks good. You miss out the middle man and make more profit. Even the "on line" clothing shops are beginning to realise it is not that easy, their big issue is "returns". I know my old firm avoided it although they bought a share in a Main Dealer, even that didn't do too well. I hear differing reports. Whenever I try to send anything back to Hornby it is get a return number and then write a letter to include in the return then take it to a Post Office, someone else said that they got a prepaid sticker when they did a return. Either way "returns" are one of the big issues for any supplier. Then I get the opinion that they are not really geared up for retail. I buy a lot of spare parts to rebuild locos, buy them from Hornby and is takes about a week for them to come. Buy from the likes of Peters Spares etc. it is about a day, even Lendons who states that he only posts a couple of times a week normally beats it.

As a good guide even Amazon stated recently that it doesn't make that much money on retail, most of its profits coming from computer services.

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I know nothing about manufacturing or retailing but I am interested to see the wheel apparently coming full circle. Back in the days of rose tinted spectacles, manufacturers made stuff and sold it to retailers. The retailers sold it to Joe Public, and dealt with any hassle arising from those sales. Retailer and manufacturer made a profit. Then the manufacturers got the idea of cutting out the retailer middleman and selling direct to Joe Public. Suddenly they had to learn a whole lot of new skills about how to sell stuff, how to deal with Joe and how to compete with the new breed of on-line retailers. Some appear still not to have learned those skills. Many smaller retailers went pop and the manufacturers find that the profits they foresaw are eaten into by retail staffing and system costs. Some are now coming up with "new" ideas like opening shops - Oh Wow, what an innovation! It reminds me of the conference of transport experts where one delegate came up with the idea of a dedicated freight only road. Another promulgated the idea of a number of large freight trailers pulled by a single tractor unit - much more efficient. Generally agreed to be well worth further study until it was pointed out that such already existed, called a railway. I can't wait for the next instalment of this real life soap.

 

 

I don't think Hornby will be creating standard shops but instead are seeing if there's a viable opportunity for them to create a few locations that might combine a limited range of retail goods alongside classes, demonstrations etc. Some city centre retail is moving towards to a fusion of retail and leisure (beauty/pampering demos etc in department stores etc to distinguish themselves from online stores). Apple have done well with their stores which have a similar blend of retailing, classes and demos, while traditional retailers continue to offer the standard approach.

The Margate visitor centre revamp is apparently the first, trial manifestation of this. They've been in the retail market for a while, both in Margate and at the major model rail exhibitions, and they must feel sufficiently confident of this new approach to be mentioning the venture in their annual report, which risks creating a hostage to fortune if it all goes wrong.

To my mind, this is all part of Hornby's drive to expand their brands (incl. Scalextric, Airfix, Corgi, Pocher etc) out of traditional model shops. I imagine few in the street even know about Pocher but can imagine it appealing to a certain segment of shoppers in city centres with a disposable income. Lego have certainly appealed to a broader market in this way and it's not just children and parents who buy from their stores. Some of their sets retail at well over £500.

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Huge retail chains only work when you have huge turnover with huge margins (Tesco etc) Model railways, like all hobbies, are so tiny in market share, self owned retail outlets would be marginal as a profit centre but could be great for ‘Brand Experience’ but where? Even corporations such as Apple are cutting their physical presence. Once temples to retail like the Metro Centre are dying on their feet. A concession within a hobby superstore, possibly even rotating around the country would be interesting, ultimately driving customers to the direct sales offering.

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