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Hornby's 2013 Announcements


Andy Y

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Hi

 

Having read through the post that have been placed here, and what a lot there are too.

 

I have been thinking about this design cleaver bit , What I see is this ,that Hornby Loco without all the extra bits will end up being made in India ,as their airfix range is done their .

 

If the factory in India can produce models using injection molding I do not see why they will not do the same with the lower end locos and rolling stock, thus keeping the high end models done in China and doing smaller batches.

 

Thus Hornby can make the lower end models a lot cheaper and keeping the price of the high end model higher and telling use that is how much you will have to pay for your new models if you want all the detail parts.

 

Also making smaller runs of the model will mean they will not sit on shop shelves, mind you with everyone who want the latest model from Hornby will have pre-ordered and the shops will end up with no models on their shelves anyway.

 

Mind you it is a good strategy, for if you don’t get it now you never will and this way the will sell like hot cakes.

 

The other thing is if Hornby want to there is nothing stopping them from selling their entire  model range just through MZ and their own web shop, thus keeping the price at full RRP, This way Hornby could make a lot more money on their range.

 

Of course this is all conjecture on my part and none of this could happen ?.

Darren

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The other thing is if Hornby want to there is nothing stopping them from selling their entire model range just through MZ and their own web shop, thus keeping the price at full RRP, This way Hornby could make a lot more money on their range.

That would be a very risky strategy. If they tried it, every other model shop in the country would effectively become enemy territory and they would lose their dealer service network overnight.

 

The effect of most of the model trade pushing anything-but-Hornby at lower prices can only be imagined but I suspect their competitors would be delighted.

 

John

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When models are reliesed but sell out so quickly as to deny many modellers an opportunity to buy, then Hornby is either going through serious problems or its marketting strategy is flawed.  How many people would dearly love some Thompson Suburbans and haven't been able to make purchases? . There are of course other manufacturers and if Bachmann and others tackled the carriage famine (and other issues) then Hornby could very quickly become irrelavent as far as modelling enthusiasts are concerned IMO.  

 

Of course there is also the flip side of the coin in that Hornby deliberately produces small runs, watch the market as the prices soar on Ebay, then release a second batch at a much higher price.

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Apparently the real 'looming problem' in China is going to be shortage of labour ...

 Further to this China has the world's worst 'ageing population' profile, thanks to the abundantly wonderful, flawless, magisterial, yadda, yadda, yadda, kitty cat leader's one child policy. There's two curves about to intersect: the rising demand for labour in China and the reducing new labour force supply thanks to 'one child'. That''s already into a second generation: the first product of reduced kiddy output is now parenting fewer one kiddy outputs of their own. Those with a grasp of geometric progression will have some idea of how hard and fast this bites. The only way to keep the Chinese economy moving is going to be by immigration. I predict that very shortly there will be incentive schemes on offer to any of 'old hundred names' currently living outside China's borders to return to the motherland: provided they bring in tow multiple children...

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How many people would dearly love some Thompson Suburbans and haven't been able to make purchases?

 

Me for one! I've managed to get one of the lavatory composite coaches in carmine/maroon but was unable to get any brake thirds at reasonable prices. I am waiting on the Thompson teak versions and have in fact pre-ordered a number of each in order to hedge my bets somewhat on whether they'll be fully available. The same thing happened with the Gresley brake third last time around. There really should have been larger runs of this, and the aforementioned Thompson brake to accommodate the high demand. As it stands I have one of each livery of the Gresley brake, and no Thompson brake at all, with quite a number of teak and carmine vehicles in the other coach types.

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Me for one! I've managed to get one of the lavatory composite coaches in carmine/maroon but was unable to get any brake thirds at reasonable prices. I am waiting on the Thompson teak versions and have in fact pre-ordered a number of each in order to hedge my bets somewhat on whether they'll be fully available. The same thing happened with the Gresley brake third last time around. There really should have been larger runs of this, and the aforementioned Thompson brake to accommodate the high demand. As it stands I have one of each livery of the Gresley brake, and no Thompson brake at all, with quite a number of teak and carmine vehicles in the other coach types.

I have an ER-orientated friend who is waiting for a further run of the Gresleys. He was on holiday when the first lot came out and by the time he got home, the brakes were all gone. This time he has pre-ordered!

 

This followed the pattern set with the BR Green Maunsell brake seconds; a lot of people wanted 3-coach and 4-coach sets with one at each end but Hornby appeared to produce the same quantity of each coach type. This not only ensured the brakes sold out quickly but also left a lot of Corridor Firsts (which mainly appeared only in longer trains) on the shelves.

 

To Hornby's credit, they re-ran the BSKs pretty rapidly but I doubt they can respond as quickly under current conditions. 

 

I presume something similar has happened with the recent non-corridor models. I hope that Hornby has learned from these examples and will produce an 'A' version of brake vehicles alongside the first run in future.

 

John

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I suspect that Darren might be quite near what Hornby have in mind in some respects.  Clearly they have taken note of what happens in the commissioned market - limited runs selling at what is effectively a price fixed by the retailer at a single point of sale - and (as yet) contrary to SK's original predictions none of the commissioners has gone out of business.  Clearly that must be a good market sector to get into - you produce a quality model, can charge accordingly, sell direct, and don't worry about retailers offering discounts.

 

So perhaps this year we are seeing some hints of that - firstly with the 'concessions only' models, and secondly (but in the event more immediately) what has happened with the 2BIL.  Although as yet  - judging by comments on RMweb - the 2BIL 'experiment' hasn't paid off but that is partly because many folk have pre-ordered and partly because folk are expecting lower prices from their regular retailer or via a box-shifter.  However if the retail price situation changes (Hornby's revised trade terms might well have that effect if what I heard in December is correct) and retailers can no longer make deep discounts that could influence the way the market works and direct/concession sales could grow.  And in any case if Hornby's reports are to be believed sales via those routes are already growing.

 

Which takes us back to is it good for Hornby (to do this) or bad for retailers or good, bad or indifferent for the hobby?  Jury is out on that one but I have a suspicion that, certainly in the 'highly detailed' area of Hornby products, we might be seeing some change with limited numbers produced in each run and far less discounting - especially steep discounting.  My only plea against that possible change is that we can get to a realistic and reliable specification and pre-ordering situation as I have already advocated elsewhere (Post No.30)  -

http://www.rmweb.co.uk/community/index.php?/topic/67652-Hornby-makes-interim-management-statement-30113/page-2

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If pre-ordering becomes the order of the day with Hornby, they might as well not produce a catalogue if it is just a colour album of things unnobtainable! (shades of design clever). I understand Hornby's logic however....It's how some very small businesses have always operated - me included, but how much it will work long term for big company that has relied on retail outlets is something else. The retailer wins in some ways if pre-ordering means he gets to sell his allocation very quickly, but what if he is arbiterily allocated a small amount of none at all by Hornby? He then might refuse to stock Hornby products right across the board.....something I saw happen in the photography business.

 

Internet reviews, blind pre-ordering based on trust, and the end of viewing & handling the real goods in a high street shop before purchase? Not good.

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Internet reviews, blind pre-ordering based on trust, and the end of viewing & handling the real goods in a high street shop before purchase? Not good.

Agreed. That's exactly why there's been so much focus on this. To some extent this has happened already in the US - though I would say that the US market has treated the hobby shops better, a large number of orders continue to be placed though them.

 

Preordering has reached a point where we see the following in the BLI catalogue:

post-1819-0-69735600-1360776205_thumb.jpg

 

 

 

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If pre-ordering becomes the order of the day with Hornby, they might as well not produce a catalogue if it is just a colour album of things unnobtainable! (shades of design clever).

 

Bauxite liveried 20T brakevans !!!!

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Agreed. That's exactly why there's been so much focus on this. To some extent this has happened already in the US - though I would say that the US market has treated the hobby shops better, a large number of orders continue to be placed though them.

 

Preordering has reached a point where we see the following in the BLI catalogue:

attachicon.gifprerordering.JPG

 

 

 

A further advantage of this approach is that if the retailer wishes to take models into stock for continued sale after the initial rush he can do so; at his risk of course, but that's business.  Equally I'm sure many retailers are fully aware of what the 'fall-out' rate is on pre-orders and they might se that as a way of building stock if such rates are consistent. 

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I suspect that Darren might be quite near what Hornby have in mind in some respects. Clearly they have taken note of what happens in the commissioned market - limited runs selling at what is effectively a price fixed by the retailer at a single point of sale - and (as yet) contrary to SK's original predictions none of the commissioners has gone out of business. Clearly that must be a good market sector to get into - you produce a quality model, can charge accordingly, sell direct, and don't worry about retailers offering discounts.

Yes... But.....

 

That's just one step removed from what Dapol already do and Wrenn used to, making similar models but with only (say) 250 examples carrying any particular number/name.

 

Commissioning works precisely because it creates products deemed to be outside the scope of the larger players (Kernow's Beattie tanks) or as a form of sponsorship to get products already likely to be under consideration made sooner (TMC's BR Horse boxes).

 

Hornby probably could do 'niche' if they really wanted to but the company regards itself as THE mainstream player and fitting such activities into their existing culture would be difficult.

 

Differentiation between two product strands has been done before (Bachmann USA introduced the Spectrum range above their baseline products and Hornby themselves inserted Railroad below their main range). Toyota / Lexus provide a parallel in another field.

 

However, Design Clever may already represent a perceived middle tier within Hornby and adding commissioned models (in the sense that we currently understand them) could be too great a distraction for a company that has often seemed to lack focus.

 

John

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Hornby probably could do 'niche' if they really wanted to but the company regards itself as THE mainstream player and fitting such activities into their existing culture would be difficult.

 

John

But they are already doing exactly that - albeit often only livery or detail differences but still 'something different' coming off their production line.  OK so there are c.1,000 of those 'something differents' but that is no different in numbers from some of the commissioned models (in fact it includes some of the commissioned models of course).  And  - while they will probably be repeated in the future with a different running number or livery detail I wouldn't mind betting that some of their 'normal' production runs nowadays aren't very much greater in number than that anyway.

 

However time will tell and once Hornby finally manage to get a grip on what markets they are trying to serve and how (which they do seem to be getting some idea of at last) it will be interesting to see how things develop.  They clearly don't intend to desert the mass market but I don't think we should be surprised if they start to tackle some market areas in a different way

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.

 

The question not really asked (or answered) is what has/will happen to the retailer order numbers ?

 

Ordinary shops and the box shifters will have ordered a set number of any particular model.   The question really is "how many (or what proportion) of those have been put aside before Hornby sent out items to MZ or put them into their own on-line stock" ?

 

As long as Hornby have set aside 100% or retailer pre-orders then there is no problem, merely a commercial discussion to be had between Hornby and their retailers.

 

IF Hornby are NOT reserving the full pre-order quotas before supplying their concessions and their on-line stock then I would suggest that a much more serious commercial row might ensue and the serious modelling fraternity might also react badly.

 

As someone said, Simon K is going to have a fun time at his next personal appearance at a show.

 

By the way, as he "advertised" his personal business e-mail address recently and invited comments, has anyone raised the issue with him ?

 

.

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But they are already doing exactly that - albeit often only livery or detail differences but still 'something different' coming off their production line. OK so there are c.1,000 of those 'something differents' but that is no different in numbers from some of the commissioned models (in fact it includes some of the commissioned models of course). And - while they will probably be repeated in the future with a different running number or livery detail I wouldn't mind betting that some of their 'normal' production runs nowadays aren't very much greater in number than that anyway.

 

However time will tell and once Hornby finally manage to get a grip on what markets they are trying to serve and how (which they do seem to be getting some idea of at last) it will be interesting to see how things develop. They clearly don't intend to desert the mass market but I don't think we should be surprised if they start to tackle some market areas in a different way

A few years ago, 'standard' Hornby production runs were reckoned to be 3000 with 'Collector's Centre' editions at 1200 (e.g the previous LSWR M7) and some certificated Collector's Club items as few as 500 (e.g. 'Manston').

 

Both examples fitted the 'something different' offer without incurring significant additional tooling costs as have the 'Pete Waterman Collection' models more recently.

 

This is the area where Commissioners and Hornby will find common ground. However, I don't think that Hornby, as it currently operates, would embrace the greater complexity involved in making around half-a-dozen batches of 500 all-new models with livery and detail variations as Dapol did with the Beattie Well tanks for Kernow Models.

 

That's not to say they couldn't do so if they put their minds to it, rather that I doubt they could pull it off successfully (or even want to) in the immediate future.

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.

 

The question not really asked (or answered) is what has/will happen to the retailer order numbers ?

 

Ordinary shops and the box shifters will have ordered a set number of any particular model.   The question really is "how many (or what proportion) of those have been put aside before Hornby sent out items to MZ or put them into their own on-line stock" ?

 

As long as Hornby have set aside 100% or retailer pre-orders then there is no problem, merely a commercial discussion to be had between Hornby and their retailers.

 

IF Hornby are NOT reserving the full pre-order quotas before supplying their concessions and their on-line stock then I would suggest that a much more serious commercial row might ensue and the serious modelling fraternity might also react badly.

 

As someone said, Simon K is going to have a fun time at his next personal appearance at a show.

 

By the way, as he "advertised" his personal business e-mail address recently and invited comments, has anyone raised the issue with him ?

 

.

Apparently Hornby have cut the numbers being made available to independant retailers. One such retailer informed me that he is expecting a cut of up to 25% on what he would normally get and that he has stopped taking pre-orders for beyond 75% of what he was orinially expecting. Other retailers may not be making such adjustments so some customers could be in for a disappointment. Having said that it seems Hornby have announced a second batch of the BR green 2-BIL which is expected in June, presumably with a different running number?

 

I have had a reply from Hornby customer services saying that currently Hornby do not have plans to extend this limited pre-release practice to other models. That does not mean it won't happen again, I suspect they are waiting for the results of this experiment before deciding.

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Apparently Hornby have cut the numbers being made available to independant retailers. One such retailer informed me that he is expecting a cut of up to 25% on what he would normally get and that he has stopped taking pre-orders for beyond 75% of what he was orinially expecting. Other retailers may not be making such adjustments so some customers could be in for a disappointment. Having said that it seems Hornby have announced a second batch of the BR green 2-BIL which is expected in June, presumably with a different running number?

 

I have had a reply from Hornby customer services saying that currently Hornby do not have plans to extend this limited pre-release practice to other models. That does not mean it won't happen again, I suspect they are waiting for the results of this experiment before deciding.

That'll really generate customer goodwill and loyalty, probably followed by the purchase of something in a blue box.

 

You can be sure the dealers will make sure 'disappointed' customers know whose responsibility it is.

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Pre-ordering has repercussions for retailers. I have known people order an item then when they have been told it has arrived at the shop, they start bartering because they've heard it can be obtained cheaper elsewhere. Who'd run a model shop these days??!!!

I once heard just that conversation taking place over the phone. The dealer in question fulfilled pre-orders in exactly the sequence they were placed (deliveries of fewer items than ordered are nothing new).

 

Having warned the 'customer' (who I know) that it was the last one in the shop he sold it to the next person on the list (me).

 

The pre-orderer subsequently discovered the big discounters had sold out and went back to buy it.

 

Having heard the story from both sides, I thought it was hilarious but couldn't tell him why.......

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Apparently Hornby have cut the numbers being made available to independant retailers. One such retailer informed me that he is expecting a cut of up to 25% on what he would normally get and that he has stopped taking pre-orders for beyond 75% of what he was orinially expecting.

If this continues, I can see these retailers increasing their orders by 33% to ensure they get all they want.
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HI

 

If Hornby go down this road on the number of loco’s they make and the retailers can not fulfill the preorders ,they are going to be in for a hard time and I feel sorry for them.

 

Half or more of preorders will not be meet, and if this is the way forward for Hornby EBay traders are going to snap them up and sell them for stupid money, knowing full well that they can charge what ever they like for them.

 

I can see a lot of people are going to get very annoyed about this and Hornby will lose a lot of good will and customers.

 

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