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Hornby model shop Tiers system


Phil Parker
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27 minutes ago, 37114 said:

The interesting thing for me in the announcement is the explicit calling out about retailers doing their own competing products as putting you in tier 3; you don't hear of Coke or Heinz not prioritising volume to sell to Tesco / Sainsbury's because they sell their own brand products.  

 

You do(or did) find the opposite with major retailers refusing to deal with manufactures because they supply the competition. Tesco and Sainsbury's used to be amazing for doing this and would drop a supplier if they found out they were supplying the other with own branded / unbranded items. 

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30 minutes ago, 37114 said:

The interesting thing for me in the announcement is the explicit calling out about retailers doing their own competing products as putting you in tier 3; you don't hear of Coke or Heinz not prioritising volume to sell to Tesco / Sainsbury's because they sell their own brand products.

 

I find this sensitivity, if not anger. from Hornby towards retailers 'competing' with their products very strange; Given the range Hornby produce is another model of a small southern tank loco really a major threat to their business ?  (to be fair, the same could be said regarding Bachmann and Class 66 models.....). And do Hornby realise that retailers selling their products, in whatever Tier, are highly likely to stock items from other manufacturers directly competing with Hornby, eg Class 08, Mark 1 coaches, Standard Class 4 4-6-0 ? Not to mention track, buildings, scenic materials, etc. 

 

At least I now know not to bother visiting John Lewis in Edinburgh and to just continue down the hill to Harburn Hobbies (I wonder which Tier they are in.....)

 

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22 minutes ago, The Stationmaster said:

The name appears to have vanished when Lines Brothers went into receivership in 1971.  Various of their ranges were sold off at that time - as already noted in respect of model railway items.  The name Triang-Hornby which had been introduced in 1964/65 was changed to Hornby in 1971, mainly it appears for marketing reasons, following the model railway business and brand being taken over on the demise of Lines Brothers.  Interestingly the 'Dublo' part of Lines Bros original acquisition following the collapse of Meccano Ltd went to the buyer of the model railway range and brand.  

 

So as far as model railways are concerned the Triang brand, or a brand name incorporating it, went out of use 50 years ago.  It was perhaps was seen as a commercially tainted name following the collapse of the company which had developed the name from their triangular logo?  Contemporaneously Triang trains had generally been regarded as the most down-market of the three r-t-r model railway ranges available up until then on the British market although they had seen some improvement in the 1960s.

 

Alas the liquidator's report for the disposal of Lines Brothers assets is not available online.

The Tri-ang brand was sold to Barclay Securities who took over the Tri-ang toy factories in South Wimbledon and Merthyr Tydfil. (Barclay Securities was owned by the Barclay Brothers who became famous for their ownership of The Ritz, The Telegraph and online shopping brands including Very and Littlewoods.)

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20 minutes ago, Kris said:

 

You do(or did) find the opposite with major retailers refusing to deal with manufactures because they supply the competition. Tesco and Sainsbury's used to be amazing for doing this and would drop a supplier if they found out they were supplying the other with own branded / unbranded items. 

 

That is usually related to the size of the supplier!

 

Tesco are not going to cease stocking Heinz or Unilever products because Heinz and Unilever are also supplying Sainsburys!

 

Equally Heinz or Unilever are not going to cut Tesco off as the quantities they can shift are important to the bottom line.

 

On the other hand a small supplier of say Pies might find that Tesco are only prepared to stock their products if an exclusive deal is done with them.

 

For very small producers the stability that you have a guaranteed order might be helpful in getting them up and running - but becomes restrictive as the business grows.

 

Ultimately it all depends on who needs who the most and where there is a large imbalance between the two parties involved the smaller usually has to play by the rules of the larger..... right up to shareholder / banker level

Edited by phil-b259
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What occurs to me is whether some of this relates to the fact that not only are Hornby facing competition in relation to trains, but Bachmann has recently significantly expanded its range of other types of model brands, many of which compete directly with Hornby's non-train brands like Corgi, Airfix etc.

 

So this may in part be a reaction to that.

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48 minutes ago, spikey said:

 

Didn't they just.  And unless my recollection of the 1980s is completely wonky, the prime exponent of the practice was ... Hattons.

On the other hand you could say that Hattons introduced modern selling methods into the model train retail sector.

Set a fairly high number of stock turnovers in a period and vary the price to achieve it. Whoops, just remembered that Amazon do that.

Bernard 

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I noted with interest what Hornby have said regarding certain criterion they expect be met by retailers of their brand viz: 'that amongst other things maintain a clean and well laid out store and who promote several if not all of the Hornby Hobbies ranges, which includes as well as Hornby railways, Scalextric, Airfix, Humbrol and Corgi'.

 

One retailer I know used to stock Scalextric but because of the voluminous size of it, it couldn't be sold on the same premises. Eventually, he stopped selling Scalextric and sold off the second premises. He has diversified into AFV kits but I don't think he sells any Airfix (not sure). Insofar as I am aware the only car models sold are the Oxford ones.

 

The premises are clean, well-stocked and a warm welcome awaits customers, though he does mail-order he doesn't have much of a web presence as he has already a loyal set of customers.

 

Is he likely to be relegated to Tier 2 too?

 

Interesting times.

 

Cheers,

 

Philip

Edited by Philou
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16 minutes ago, phil-b259 said:

On the other hand a small supplier of say Pies might find that Tesco are only prepared to stock their products if an exclusive deal is done with them.

 

The example that I was thinking of was for pies however they could not be called small given that they produced several million pies a year in just one of their factories. 

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In the 90s, manufacturers manufactured and shops sold to end customers. When I was at the Signal Box, my boss told Hornby that if they started direct selling (they had plans to do mail orders direct) he and other shops would start manufacturing.

 

Sorry, we can go over who started what and when but ultimately the world moved on. 

 

I have seen published several times this odd perception of the modeler doing a once yearly purchase for a loco and how much better it is to do that once a year purchase in your local model shop. It might be true that we brought a new loco on a yearly basis as a kid but  I suspect most people buy products that are most suitable to them.

If someone makes something I want, I'll buy it else no. So to suggest that Hornby is loosing my purchase to someone else is way off the mark since I don't start the year intending to buy a loco, and its a sale for someone to gain.

Even if Hornby were to be the only manufacturer left, but this does not guarantee sales since if they were and they produced nothing to interest me then the sale is zero.

 

The real issue is, the market place has evolved into a very diverse place. And it is not something Hornby can control regardless of what pressures they will try to apply. 

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16 hours ago, SteamingWales said:

Only just seen this news and picking up on this thread so don't know if this has been mentioned before.

 

Where does this leave smaller commissioners/manufacturimg model shops, thinking Kernow and TMC for example? Will they be tier 3 as well?

 

It's evident Hattons and Rails fall into T3 as they are in direct competition with the likes of eg. Terrier and Class 66 respectively 

 

However I have alway viewed Kernow and TMC as producing left field models or regional specific, Kernow doing lots of LSWR models for example, so they fall outside of Tier 3 because they aren't on direct competition? And at what point is the line crossed?

 

 

 

 


Not for the first time I have posted this.  BUT...for the record Rails unilaterally terminated their links with Hornby last August. They are not in any case in H’s Terminal Club. For further information,as Mike Stationmaster has posted elsewhere ,when Rails  held an official opening do to celebrate their splendid new emporium some three years ago.,Hornby were conspicuous by their absence. 

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1 hour ago, Dunsignalling said:

Not Invented Here Syndrome?

Or more accurately 'uninvented here' as Hornby were doing livery commssions prior to the change of regime (and a handful subsequently).    My memeory might be adrift but didn't they do a Black 5 livery commission for Hattons?

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4 hours ago, GeoS said:

If a shop is devoting significant space to Corgi and Scalextric, is it really what you want a model railway shop to be doing?

I might be a bit unusual here, but I have a significantly larger collection of Scalextric and slot cars than of trains and rolling stock...

 

For many years, I went to John Dutfield in Chelmsford to go and pick up Scalextric related items. It was repeatedly seeing all the railway stuff in there that finally inspired me to get back into model railways about 10 years ago - they helped me get my old childhood trains working again, and facilitated me getting a whole host of new models, rolling stock and accessories. I expect this crossover can also work the other way too?

 

Some aspects of stocking both brands can be a win-win!

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I must ad that I dealt with 3 dealers in Devon and their customer approach was absolutely horrendous. One was great at first and on holiday we visited the shop and bought quite a bit. Then he became sarcastic as his bit of wit was as funny as S**T. The other was visited 2 times. In between visits a new owner took over who was related to Basil Fawlty and told me to "shift" my car as he may have loads of other customrs arriving. There was enough room for a Jumbo Jet to park. The third, I spent over £100 with on wagons on the Monday. On the Friday before we were to leave I wanted to get several coaches off him. We went back in the store and he almost accused me of stealing. It later transpired he had a mate who was filtching his stock and it made a TV show. Needless to say that lot would come under Hornby scrutiny for friendliness and knowledge. I think 2 have gone bust now.

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23 minutes ago, Philou said:

Is he likely to be relegated to Tier 2 too?

 

Although I can't get numbers for obvious reasons, apparently the majority of trade are in Tier 2, so to suggest that there is something wrong with this is a mistake.

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6 minutes ago, The Stationmaster said:

Or more accurately 'uninvented here' as Hornby were doing livery commssions prior to the change of regime (and a handful subsequently).    My memeory might be adrift but didn't they do a Black 5 livery commission for Hattons?


Oddly enough Mike I believe it was Rails in the time when...not that long ago....relations were somewhat better.

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12 minutes ago, Kris said:

The example that I was thinking of was for pies however they could not be called small given that they produced several million pies a year in just one of their factories. 

 

All things are relative - how many millions of tins of Heinz bean are made each your, or boxes of surf washing powder, etc.

 

Making a million or so pies each doesn't come close to the power of big brand owners - just look at how much Unilever owns! https://www.unilever.co.uk/brands/

 

 

 

 

 

 

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I find Hornby’s objection and sanction aimed at retailers turned manufacturers almost a classic case of shooting themselves in the foot,or at least an example of decisions made by people who don’t go shopping. Do they not understand that most people go into a shop, be it a model shop, Tesco, whoever, for x but end up buying not only x,y and z but a,b and c as well.


The whole point is to get people into the shop so surely that is best accomplished by having as wide a range as possible in that shop…if it’s not there you won’t get a sale.

 

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Let's also chuck this into the mix, it's little off topic, but has some relevance to the way the Hornby Group operates. This is the toy catalogue launched on Monday.

 

1621884954745.jpg

 

 

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I forgot to add that their is a new series of TV shows about Hornby due around Sept/Oct. I cannot remember which channel has comissioned it though.  Maybe something will come to light on there regarding this new sales tier system.

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Question for anyone, in fear of tier 2 and 3 being implemented on your store, wouldn't this imply Hornby trying to make a monopoly on the model train market, by not letting retailers sell other products and stocking all of Hornby's products? (Basically filling the whole store.)

 

There's no incentive for anyone to make something new in fear of screwing over said retailers because it might be "in conflict" with Hornby products? (Since as mentioned before by others, that Hornby rushes products out first to get that market and floods the market to lower sales from the competitor, example Terriers). 

 

If you don't sell all of our products and/or make any yourself, you'll be demoted. If you sell other companies products, we are watching you very carefully.

 

What about commissions, like TMC's G5, and Kernow's Warships, LSWR brake van, and Railmotor? Wouldn't this be against Hornby's new policies?

 

Seems like there is no rhyme or reasons who is in what tier, despite their policies being stated. 

 

1 minute ago, Phil Parker said:

 

Although I can't get numbers for obvious reasons, apparently the majority of trade are in Tier 2, so to suggest that there is something wrong with this is a mistake.

Um, doesn't this defeat the whole purpose of having three tiers, when majority are in tier 2?

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1 minute ago, Ribird said:

Um, doesn't this defeat the whole purpose of having three tiers, when majority are in tier 2?

 

Not really, there wouldn't be any point in having 3 tiers if everyone was in Tier 1 or Tier 3.

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1 hour ago, spikey said:

 

Didn't they just.  And unless my recollection of the 1980s is completely wonky, the prime exponent of the practice was ... Hattons.

 

Yeah. But Zodiac were vastly cheaper than Hattons.....

 

Now that was really a "pile 'em high and sell 'em cheap" retailer. Not just toys either, as well as brands like Hornby, Mainline, Lima and Airfix they used to sell Peco, Ratio and even Coopercraft kits.

 

https://zodiactoys.wordpress.com/

 

Highlighted due to the fact that people seem to be missing is that Hattons competition wasn't other model shops, it was the High Street. It had to compete with Woolies, WHSmith, Zodiac, etc. who were also selling model railways at the time.

 

 

Jason

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13 minutes ago, Ribird said:

Question for anyone, in fear of tier 2 and 3 being implemented on your store, wouldn't this imply Hornby trying to make a monopoly on the model train market, by not letting retailers sell other products and stocking all of Hornby's products? (Basically filling the whole store.)

 

 

Hornby have NOT said that stores must sell exclusively Hornby to be in the top tier or continue to be supplied.

 

As such a retailer in ANY tier is at perfect liberty to also stock Bachmann, Dapol, Heljan, Acurascale, EFE, etc. alongside Hornby.

 

What Hornby have basically said is that if a retailer commissions their own products they are perceived to be in competition with Hornbys own products / plans then Hornby won't supply them.

 

This is no different to what Bachmann do and led to Hattons not being able to order stock from Bachmann a few years back.

 

The NEW element with respect to Hornby seems to be an additional bunch of requirements, many of them highly subjective and ultimately designed twist the bias of who Hornby supply in favour retailers who shift lots of Hornby group products but who are not in any way a 'threat' to Hornbys finances.

 

That is what has caused the concern with smaller retailers.

Edited by phil-b259
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19 minutes ago, Phil Parker said:

Let's also chuck this into the mix, it's little off topic, but has some relevance to the way the Hornby Group operates. This is the toy catalogue launched on Monday.

 

1621884954745.jpg

 

 

 

Exactly.

All on this forum are railway modellers, or else we would not be here.

 

Many appear to buy things online because they know exactly what they want.

Hornby have other customers too, many of whom buy their products when they see them on display in shops.

Only Hornby know how they believe their customer base is split. Their announcement implies that they believe retailers with physical shops which people actually visit is important to their business model.

I do not have access to their sales figures, nor am I ever likely to, so this means I am in no position to judge whether or not this is a good strategy.

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