Hornby 2014 - A fatal sting for retailers?

[PhilH]

I see Hornby have resurrected Pocher - this is the first kit, definitely not aimed at the mass market, $799 in the States. As I said earlier in this thread I wonder if eventually they want to move upmarket.

 

[robmcg]

...

 

With the restricted supplies of Hornby, and their new structures in pricing,  then  good quality S/H and trade ins may  be the keystone of model shops in the future 

 

Hattons and Rails already do this, but it would be quite hard to make a lot of money compared to bulk sales of an item, when using the web site and photos system.    Buying s/h items is a bit risky too.  If you had to hire a shop assistant and have them take a s/h model out of  what remains of factory packaging, photograph it, test it and replace it undamaged, well, the chances of a model remaining unmarked are fairly low, and that's assuming it was in perfect condition to begin with!

[APOLLO]

It seems the value of good condition models has bounced upwards by quite a margin very quickly. Look at Hattons website, they are listing old Hornby class 25's (complete with list to port !!) and Tri-ang dock shunters, not really cheap either - what is the world coming to !!

 

Be careful to re-assess your collections, especially for insurance purposes. Your (and my) perceived "junk" is probably worth more than we think.

 

Brit15

[andyman7]

I see Hornby have resurrected Pocher - this is the first kit, definitely not aimed at the mass market, $799 in the States. As I said earlier in this thread I wonder if eventually they want to move upmarket.

 

[Previous message:They are the UK and Ireland distributors, Pocher isn't a Hornby company]

 

Edit: Er.... it seems they are, my mistake as corrected below by others. I was misled by the fact that they only sell to UK and ROI through their website, but presumably it''s because other territories have their own exclusive distribution deals

[valeofyork]

Hattons and Rails already do this, but it would be quite hard to make a lot of money compared to bulk sales of an item, when using the web site and photos system.    Buying s/h items is a bit risky too.  If you had to hire a shop assistant and have them take a s/h model out of  what remains of factory packaging, photograph it, test it and replace it undamaged, well, the chances of a model remaining unmarked are fairly low, and that's assuming it was in perfect condition to begin with!

 

Hattons and Rails are both very expensive for second-hand models though (despite both being among the cheapest out there for new models). Rails sell a lot on ebay, and I've had some reasonable buys on auctions in the past, but they now seem to list everything as buy it now, with high prices.

 

A quick look at Hattons website finds Lima Virgin-livery HST sets for £100. This is about twice what they would go for on ebay!

 

If I have anything to sell, I flog it myself on ebay. Even after the ebay / paypal charges, it'll still bring in significantly more than a model shop is likely to offer.

[Jol Wilkinson]

It seems the value of good condition models has bounced upwards by quite a margin very quickly. Look at Hattons website, they are listing old Hornby class 25's (complete with list to port !!) and Tri-ang dock shunters, not really cheap either - what is the world coming to !!

 

Be careful to re-assess your collections, especially for insurance purposes. Your (and my) perceived "junk" is probably worth more than we think.

 

Brit15

While it's replacement cost may be high, it's sales value might be a lot lower. Hattons and other retailers will look to make good margin on s/h as they carry all the risk and also have to pay VAT on their profit margin AFAIK .

[The White Rabbit]

Not sure how this relates to the UK., but I am told, and read, that most High Street shops in the UK are in deep trouble, as they are here.

 

Again I feel sorry for retailers who depend, or recently depended on Hornby for turnover. The feeling in the first messages was that Hornby have in a sense betrayed retailers with broken promises, which is bad.  I hope the re-definition of relationships in retailing early next year works out ok.

 

(All) retail is very difficult at the moment. There are some people that are doing well, but most are struggling, for all sorts of reasons. 

 

Our trade account with Hornby is very quiet. Partly that's because of limited availability, partly prices (and yes, I appreciate that's not a problem exclusive to Hornby). My personal experience of Hornby over the last ten or so years is it's like the curate's egg - some is very good, other bits aren't - and you never know which bit you're going to get next. Thankfully, we are not dependent on Hornby sales but they do provide a useful secondary income. If we lose that, it's not critical in itself, but it is another blow, following several others recently. 

 

Normally I would not post on trader - supplier relationships, as others have suggested, I would normally regard that as privileged information and not for public consumption, however, I have made an exception with this thread as I do feel let down, firstly by the planned changes on pricing and secondly by the silence from Margate. I am keeping my fingers crossed for the New Year and especially for those shops whose owners' living depends on it. 

[PhilH]

They are the UK and Ireland distributors, Pocher isn't a Hornby company

 

From Wikipedia - one can only assume they're right.

 

'After the Lima group went into bankruptcy the Pocher brand was bought by Hornby in 2004. In December 2012 Hornby announced the "resurgence of a myth" on the official website of Pocher. An official presentation was held on the Nuremberg International Toy Fair on 30 January 2013. Pocher presented the new 1:8 model kit of the Lamborghini Aventador.^[4]'

[The Stationmaster]

From Wikipedia - one can only assume they're right.

 

'After the Lima group went into bankruptcy the Pocher brand was bought by Hornby in 2004. In December 2012 Hornby announced the "resurgence of a myth" on the official website of Pocher. An official presentation was held on the Nuremberg International Toy Fair on 30 January 2013. Pocher presented the new 1:8 model kit of the Lamborghini Aventador.^[4]'

 

As also mentioned in a recent Hornby report to its shareholders - quite clear that Hornby own Pocher.

[gismorail]

(All) retail is very difficult at the moment. There are some people that are doing well, but most are struggling, for all sorts of reasons. 

 

Our trade account with Hornby is very quiet. Partly that's because of limited availability, partly prices (and yes, I appreciate that's not a problem exclusive to Hornby). My personal experience of Hornby over the last ten or so years is it's like the curate's egg - some is very good, other bits aren't - and you never know which bit you're going to get next. Thankfully, we are not dependent on Hornby sales but they do provide a useful secondary income. If we lose that, it's not critical in itself, but it is another blow, following several others recently. 

 

Normally I would not post on trader - supplier relationships, as others have suggested, I would normally regard that as privileged information and not for public consumption, however, I have made an exception with this thread as I do feel let down, firstly by the planned changes on pricing and secondly by the silence from Margate. I am keeping my fingers crossed for the New Year and especially for those shops whose owners' living depends on it. 

I think that's its good that you are prepared to make an exception to your rule on ' supplier relationships' due to the current situation within the model railway trade that we 'all' are faced with. . I am in a situation where I have to make a journey of almost an hour to get to my local model shop to enjoy the banter and advise that is a core of our wonderful hobby and I have always be a supporter of the local model retailer. Over the last year my local retailer just has not been able to supply the goods that I have wished to purchase and this has been totally out of his control due to the supply shortage within the industry in general. I have however tried to keep supporting him by purchasing all the bits and pieces that are required to build a layout with detail and atmosphere like most of us on this website strive to produce but this will not keep him in business in the future.  

I suppose in many ways RMweb has started to replace the 'banter and advise' that has been enjoyed in model railway shops throughout the country over the years and we must all be thankful for this new type of communication to feed our ' addiction' , but it is another 'nail in the coffin' for the local model shop.

I wonder what the break down is of Hornby's sales to the serious modeller compared to the 'train-set' purchaser and collector of box's . Without proof or evidence it is difficult to gauge such a break down but I would guess that the later two are a much higher percentage compared to users of RMweb / serious model railway community.

 

'

[Budgie]

Times are tough, and production costs are high. For people who want to buy rtr models, what is more important? That these models continue to be produced, or that there is a local model shop to call into? You might not need to make a choice right now, but a couple more years of dire results from Hornby, and you might just have a difficult decision to make.

In a few years' time you may find all the problems with 3D printing have been sorted out, and anything you could wish for being made on the spot for you by this method.

[Ron Ron Ron]

I'm not sure if this is relevant to the discussion, but I noticed this exert from Andy Y's interview with SK, published a year ago (6th December 2012).

As stated by others earlier in this thread, it's a message that has been coming through from company reports for a few years now; but here it is, straight from one of Hornby's marketing people.

 

 

Andy:

“It has been said ‘online and direct marketing sales continue to show encouraging growth’; does this mean that direct selling is likely to increase in the future and is this at the expense of the traditional toy shop or model shop?”

 

Simon:

“You’ve asked questions about technology and the changing economic environment so you know that as a business we have to be prepared for all eventualities. It wouldn’t be good business for us not to be.

All the retailers we deal with, big or small, are businesses in their own right. They have to adapt to the same economic challenges. Good businesses survive bad ones don’t. Our consumers have unlimited choice today on where they choose to buy the product. Some buy on price only, some prefer a personal experience, and some simply like to buy direct from the brand owner. It’s no different for lots of consumer brands. Every statement in our reports is not solely linked to Hornby brand but we are encouraged by our consumer interaction levels on our online/direct business.”

 

 

 

.

[gismorail]

Well that last reply says it all in my book, change or go under would seem to be the way to go. Market forces always shape the way things are sold at whatever price that people are prepared to pay. If Hornby get it wrong then I can see a lot of cheap unsold models coming to the box movers if they can survive, and that will not be good for the hobby as a whole

[Ron Ron Ron]

.....I wonder what the break down is of Hornby's sales to the serious modeller compared to the 'train-set' purchaser and collector of box's . Without proof or evidence it is difficult to gauge such a break down but I would guess that the later two are a much higher percentage compared to users of RMweb / serious model railway community.

 

'

 

The nearest we've ever got to that sort of breakdown, has been what the previous CEO and SK have said in interviews with the press.

The following is taken directly from an interview with Frank Martin in the business section of the Guardian, back in December 2007.

A similar percentage figure was given in an interview with one of the model railway mags, about a year later IIRC?

 

 

 

....A large part of Hornby's business is in peddling nostalgia. Martin reckons that 70% of sales of model railways are to adult collectors and hobbyists and 30% to children, what he calls the Harley- Davidson effect.....

 

 

.

[DriverBob]

Isn't 3D printing an opportunity for model shops to offer something a level of service beyond "simple" retailing? 

 

Or will it mean that we'll see fewer shops, but the ones that survive will provide a range of products, from commissioned RTR to sourcing and printing (and painting?) 3D bodyshell designs to order. 

 

On the topic of kits, if Hornby can produce amazing 1:8 Pocher cars and the 1:24 Airfix Mosquito, why not a Completely Knocked Down "RTR" loco for self-assembly?

[The White Rabbit]

I think that's its good that you are prepared to make an exception to your rule on ' supplier relationships' due to the current situation within the model railway trade that we 'all' are faced with. . I am in a situation where I have to make a journey of almost an hour to get to my local model shop to enjoy the banter and advise that is a core of our wonderful hobby and I have always be a supporter of the local model retailer. Over the last year my local retailer just has not been able to supply the goods that I have wished to purchase and this has been totally out of his control due to the supply shortage within the industry in general. I have however tried to keep supporting him by purchasing all the bits and pieces that are required to build a layout with detail and atmosphere like most of us on this website strive to produce but this will not keep him in business in the future.  

I suppose in many ways RMweb has started to replace the 'banter and advise' that has been enjoyed in model railway shops throughout the country over the years and we must all be thankful for this new type of communication to feed our ' addiction' , but it is another 'nail in the coffin' for the local model shop.

I wonder what the break down is of Hornby's sales to the serious modeller compared to the 'train-set' purchaser and collector of box's . Without proof or evidence it is difficult to gauge such a break down but I would guess that the later two are a much higher percentage compared to users of RMweb / serious model railway community.

 

Thanks for your 'buying local policy', we (and I'm sure many others) value customers that do. It's an interesting point you make about the 'atmosphere' in your local shop, I think sites like RMWeb help enormously with advice and information, but you can't beat a face-to-face meeting. Many readers will now be thinking 'clubs' and I would not disagree, but that option is not available to everyone, for various reasons. Some shops, you go in and they have a few seats and a table for customers & partners, you get offered a drink (even before you buy something...) and you are made welcome. Others, the person behind the counter doesn't even look up from his paper... The best example of the former I've seen (and I've no connection with them) is Buffers, near Axminster, Devon. Lynn & Maria run a very friendly shop, host training courses and offer a comprehensive range. I've picked up all sorts of ideas and [product leads] from them. 

 

A second point on atmosphere at your local shop - I opened up today (pre-christmas extended opening) and one customer asked about a wiring issue - another customer, with a good knowledge of electrics, came into the conversation and helped answer the query, drawing diagrams and talking through what to do. That sort of thing isn't uncommon and I like it, it's good for customers and us. 

 

As you say, locos and stock of course are the big-ticket items whose sales make or break a trading day, but most shops will stock many of the 1001 other pieces that make up a railway. The problem (commercially) is that these items tend to be small and cheap and the profit from their sale is a relatively poor reward for your time. Part of my business is the sale of scenery and accessories (our specialism) and I'm painfully aware the web-site for those is rather untidy and needs time spending on it. The trouble is, if you have spend 10 minutes listing an item, would you prioritise listing a £100 loco, £25 book or £2.75 Modelscene pack? 

 

Re break-down of sales, gut feeling from my own personal observation is most modellers buy Bachmann but a sizeable minority of purchases are Hornby super-detailed/'adult' models. First-time train-set purchasers, they think of Hornby but about half will buy Bachmann sets (possibly after a general chat about modelling and manufacturers). Railroad is very popular with children and people looking for 'value' products or for a detailing project. And most purchasers buy to run, of the collectors, most I've talked to are making one-off or very occasional purchases because (for instance) Grandad drove one. 

[The White Rabbit]

Isn't 3D printing an opportunity for model shops to offer something a level of service beyond "simple" retailing? 

 

Very definitely. It's something I'm keeping a close eye on, with the main downside at the moment being the time needed to invest in 'operator training'. But I think that and laser-cutting (same comment) have great potential for this hobby (and others). 

 

 

Or will it mean that we'll see fewer shops, but the ones that survive will provide a range of products, from commissioned RTR to sourcing and printing (and painting?) 3D bodyshell designs to order. 

 

Regional supershops, perhaps? If they had some layouts on display all the time and space for lectures/presentations, modelling services available, maybe people would visit less often but for a longer time and spend more money per visit. Maybe even have small units within the main shop that small, niche suppliers could rent for the day/week, possibly tied in with demonstrations/lectures? I don't know if it would work commercially, but it's an interesting thought. 

[JSpencer]

Isn't 3D printing an opportunity for model shops to offer something a level of service beyond "simple" retailing? 

 

Or will it mean that we'll see fewer shops, but the ones that survive will provide a range of products, from commissioned RTR to sourcing and printing (and painting?) 3D bodyshell designs to order. 

 

On the topic of kits, if Hornby can produce amazing 1:8 Pocher cars and the 1:24 Airfix Mosquito, why not a Completed Knocked Down "RTR" loco for self-assembly?

The ESA are currently working on a huge project to eventually to be able to print off an entire satellite! The is not printing in one material but several. The best material to print in would be carbon. You can tweak it to work like a micro chip or form very solid and robust structures with it or even both. The possibilities with carbon alone are endless.

 

Imagine, you print off your own diesel loco with individual tractions motors, working brakes and integrated anti wheel slip control. You could probably print off moving drivers etc etc. Not only will your models be more detailed than ever, the would be stronger than ever. You could hit one with a hammer and it won,t break of even be scratched.

 

The end loco would be extremely light although you could have print heavy elements into the structure as well. We won,t see for about 50 years but it will happen some day...

[jjb1970]

One thing I noticed when I was in a model railway club was that there was a certain element whose verbal support for local model shops was inversely proportional to the amount they actually spent in the local shop. I used to buy probably 90%+ of my models from the local shop until about 2003 when for a variety of reasons my buying habits changed but there were guys in the club who'd occasionally spend a few pence on tract pins, ballast, adhesive or something but never buy any of their locomotives, rolling stock or big ticket scenic items there whilst extolling the virtues of the local model shop. I also noticed that there were plenty of people who spent hours in the shop talking away and socialising yet never bought anything of note, I think the shop keeper was happy enough as these guys tended to visit in hours that were pretty quiet so it passed the time for him too.

O

[DriverBob]

Very definitely. It's something I'm keeping a close eye on, with the main downside at the moment being the time needed to invest in 'operator training'. But I think that and laser-cutting (same comment) have great potential for this hobby (and others). 

 

 

 

 

Regional supershops, perhaps? If they had some layouts on display all the time and space for lectures/presentations, modelling services available, maybe people would visit less often but for a longer time and spend more money per visit. Maybe even have small units within the main shop that small, niche suppliers could rent for the day/week, possibly tied in with demonstrations/lectures? I don't know if it would work commercially, but it's an interesting thought. 

 

I think the point about a working layout is significant - the "wow" factor of a world in miniature draws the attention of the casual browser. To use another Lego reference - they have displays of assembled sets in their own stores and in our local Smyths, even though buyers already know what to expect from the toy.

 

But in a toy market, where model rail has dropped off the scene compared to the 1970's (although there are reasons for that beyond their control, such as competition in leisure time activities from multichannel TV, computer games etc), Hornby could turn their experiment with company stores (Swindon Designer outlet, and Stratford in 2012) into something more - a chance to re-engage the wider public in all the variants of miniature modelling they offer, literally creating a shop window on their brands by devoting a higher than usual amount of floorspace to truly arresting displays rather than stock (or even ditch most of the stock and back up the retail space with click and collect). 

 

I am amazed that we still get a range of new products to buy each year from Hornby and Bachmann - but I wonder how long it will continue unless the UK model rail customer base is stabilised or rejuvenated.

[Dunsignalling]

Isn't 3D printing an opportunity for model shops to offer something a level of service beyond "simple" retailing? 

 

Or will it mean that we'll see fewer shops, but the ones that survive will provide a range of products, from commissioned RTR to sourcing and printing (and painting?) 3D bodyshell designs to order. 

 

On the topic of kits, if Hornby can produce amazing 1:8 Pocher cars and the 1:24 Airfix Mosquito, why not a Completely Knocked Down "RTR" loco for self-assembly?

No doubt they could but how many of their customers could successfully put one together?

 

Their modern products are a lot more complex and include delicate parts that the old Tri-ang Princess or EM2 of yore didn't. By comparison with (say) a current A3 or Class 50, they were robust with not many individual parts. Assembly was pretty much idiot proof and, even if done badly it was easy to take them apart and try again.

 

Also, of course, the cars and aircraft don't have to work once you have put them together!

 

John

[edcayton]

 

 

 

 

Regional supershops, perhaps? If they had some layouts on display all the time and space for lectures/presentations, modelling services available, maybe people would visit less often but for a longer time and spend more money per visit. Maybe even have small units within the main shop that small, niche suppliers could rent for the day/week, possibly tied in with demonstrations/lectures? I don't know if it would work commercially, but it's an interesting thought. 

 

The Engine Shed at Ford is like that, with their Gaugemaster tie-in. They have some display layouts and are a place to spend some time in. Next to the station too. No connection etc

 

Ed

[Dunsignalling]

In a few years' time you may find all the problems with 3D printing have been sorted out, and anything you could wish for being made on the spot for you by this method.

It's going to be a very long time before a 3D printer can also add the painting and lining to the standard achieved by Hornby.

 

3D printing is great if you want parts and (maybe fairly soon) bespoke wagon kits but producing complete locomotives will continue to require significant assembly and finishing skills for the forseeable future.

 

John

[Fenman]

... Re break-down of sales, gut feeling from my own personal observation is most modellers buy Bachmann but a sizeable minority of purchases are Hornby super-detailed/'adult' models. ...

 

Thanks for your post - really interesting. But I found the statement I've quoted odd; in very much more than 90% of cases there is no direct competition, in the sense that if I am modelling pre-Nationalisation East Anglia, I have to buy Hornby coaching stock because Bachmann produces damn-all that can be used. And, doubtless, there are cases where that situation is vice versa.

 

For modellers, I'm amazed that there is very much debate about what to buy as between manufacturers, or favouritism of one manufacturer over any other (other than on the obvious grounds that Manufacturer X is actually producing what I need!). If I want a 00 Schools class there's only one place to go, and no matter how fine a model the Blue Pullman is, it won't replace my "need" for a Schools. It feels to me like it's a "must have" in addition to my core needs, not in replacement of it.

 

Paul

[The White Rabbit]

Yes, for predictable reasons, manufacturers prefer to avoid direct competition. 

 

What you describe is technically known as an inflexible elasticity of demand - if you want a J15, then a J11 is not good enough... and I'm guilty of that attitude too. Assuming a manufacturer's product is to an acceptable standard (a very subjective issue I know, particularly with 'design clever') and not a rip-off or excessively expensive re price (ditto!), then I will buy from any firm because I want a RTR class X in livery Y and as to which firm gets my money, that depends on who decides to do a model of it [first]. Logical? I think so... Personally, I would agree with you 100%.

 

However - you cannot stock a shop on your own preferences and prejudices, it's got to be what sells (or pedantically, what you think/expect/hope will sell). Some customers are fervently pro (or anti) [insert name of manufacturer - any of them] and will not touch any others, no matter what the magazines print in reviews or their mates down the club say. Some customers are very pragmatic and will buy more or less according to their wants for particular classes/models (as I do). Others (possibly a majority?) prefer one manufacturer's products but if the other does a model they really want, they will buy it. I suspect this might be more the case with DCC operators and a perceived view that X's models are easier to fit with Y's chips? There's also the issue of availability, if the purchaser wants 'an LNER 060 goods engine' then maybe the J11 and J15 will compete for his money and sales will depend on what you have on the shelf on a particular day and/or their respective prices.

 

Whatever the explanation, it has been my experience that overall more Bachmann is sold than Hornby. Other retailers may well have a different experience. I speak from the perspective of having run a model shop or a steam railway's giftshop which also sells models, for around 12 years. I've never worked in a Toymaster or other High Street shop, who will only stock Hornby. I've never worked in a 'box-shifter' shop. Sales from both of these outlets will have an effect on national sales, probably more so than the ones I have seen from the 'local model shop' type of outlet. So I can offer a trade perspective on what I've seen but it is only from one perspective (hence the italics in my OP). At the end of the day, it could come down to something as mundane as our customers liked our prices on Bachmann but bought their Hornby elsewhere...  in which case my observations will be biased and not a 'representative sample' of purchases in our part of the world. 

 

I hope that makes my earlier comment a bit clearer?