Hornby Tier System- An Update.

[Harlequin]

1 hour ago, DCB said:

With so much of the retail market moving on line it makes no sense for Hornby for there to be wholesale  retail hierarchy if they can sell direct.

Correct. That is the way the world is going.

 

1 hour ago, DCB said:

Trouble is they are selling to retired pot bellied collectors and that market is dying, quite literally.  Their stuff is being loaded onto eBay by their executors as we speak. 

Rubbish. There are new buyers coming into the market all the time. They are 40-50-something comfortably-financed returnees, not yet pot-bellied, who are ignored by marketing and survey people because they are neither young nor old. The hobby is not dying - it's renewing itself as fast as ever - just in a wide demographic that flies under the radar.

 

[boxbrownie]

3 hours ago, Steamport Southport said:

. Proof is in the now closed "Titfield" thread. Most of the people in that thread were just using it as an excuse to kick Hornby, most weren't interested in buying a Rapido one either.

 

Jason

I wish I had your crystal ball, my view of “that” thread was a lot of people were interested in buying a Titfield set but not the Hornby version after the underhanded way they went about announcing and launching the line.

 

I for one have pre-ordered every Rapido Titfield set…..sound as well., I am sure there were lots of people not buying posting as well but that is the nature of something so controversial.

Edited April 10, 2022 by boxbrownie

[Mike Buckner]

3 hours ago, Steamport Southport said:

 

Not my experience of Hornby. Far from it.

 

Over the last year or so I've bought at least twenty Hornby locomotives* and not one of them have had a problem. I don't think I've had a problem with a Hornby model in over 45 years of buying them. Maybe I'm lucky. But I reckon I'm typical of most purchasers.

 

Is it a case of those that have a problem with a model shout loudest whilst those that don't have problems don't say anything, and if they do they are ignored as it doesn't fit in to peoples agenda?

 

And yes, some do seem to have an agenda, usually those that constantly complain they don't make "modern" trains then say they wouldn't buy them even if they did. Proof is in the now closed "Titfield" thread. Most of the people in that thread were just using it as an excuse to kick Hornby, most weren't interested in buying a Rapido one either.

 

 

*Not including a full set of Coronation Scot and about a dozen GWR Collett coaches.

 

 

 

Jason

 

 

I haven't had one that's been problem-free.

 

So much so, that I don't look at Hornby Locomotives now.

 

Mike

 

 

[jonhall]

8 hours ago, Drifter said:

To end this update on a lighter note, post April 1st. Speaking to a retailer this week and he told me about a new rep they had some years ago.The shop queried the high price. Retailer was told the train came with a wagon. Shop pointed out that was the tender not a wagon.

 

Then I've a fair idea which retailer, because I actually  overheard the conversation whilst browsing as a customer! 

 

Jon

[Phil Mc]

2 hours ago, eldomtom2 said:

I thought the point of the tier system is that Tier 2-3 can't order what they want, because they have to make do with whatever scraps the Tier 1 retailers leave them.

I thought the point of the tier system is that tier 2-3 can order what they want, but are only actually supplied with whatever H don’t sell online themselves and what tier 1 shops don’t want….

 

Which means tier 2-3 shops can’t take pre-orders for anything without running the risk of not being supplied, and therefore letting their customers down, which will no doubt damage their reputation and future sales.

Therefore driving consumers to buy direct from H to guarantee they get what want, which is, in my entirely personal, opinion, H’s endgame.

 

cheers,

Phil.

[andyman7]

3 hours ago, eldomtom2 said:

I thought the point of the tier system is that Tier 2-3 can't order what they want, because they have to make do with whatever scraps the Tier 1 retailers leave them.

It's Tier 3 that can only order what is available from stock. Tier 2 have a lower priority than Tier 1.

[andyman7]

2 minutes ago, Phil Mc said:

I thought the point of the tier system is that tier 2-3 can order what they want, but are only actually supplied with whatever H don’t sell online themselves and what tier 1 shops don’t want….

 

Which means tier 2-3 shops can’t take pre-orders for anything without running the risk of not being supplied, and therefore letting their customers down, which will no doubt damage their reputation and future sales.

Therefore driving consumers to buy direct from H to guarantee they get what want, which is, in my entirely personal, opinion, H’s endgame.

 

cheers,

Phil.

But not all trade depends on preorders; there are plenty of Azumas and APTs available now at better prices from shops than ordering direct. Outside the rarefied world of the 'serious' railway modeller that 'must' have item x which is exaclty what they need for their shelf/layout/project, a lot of people still buy on the basis of what they like that is available now.

[RichardT]

…and I’ve just received my “members offers” email from English Heritage, and contained in it is this:

 

“Spend some time together as a family this Easter with products from Hornby Hobbies. Get 5% off Hornby, Scalextric, Corgi and Airfix and enjoy a range of activities with the kids, from building intricate models to racing slot cars.”

 

with a discount code and a click-through link to the Hornby direct sales page.  I’ve never seen Hornby in any of these kind of “members offers” emails before (they’re usually for cases of wine, or ferry cruises to Holland etc) so yet another sign of the new approach? Clever move linking it to families with an interest in heritage! But utterly irrelevant to me as I model in N, so Hornby could disappear tomorrow with no effect on my modelling purchases.

 

Richard

[rezot]

I do wonder which idiot   member of management thought the scheme up in the first place.  

[Legend]

The tier system is farcical in the first place . This is a company that is still in economic trouble , just managing to make a small profit  last year  it should be maxing sales yet the tier system is introduced to ration sales. Shops that want models can’t get them . Me thinks something fundamentally wrong there .

 

As to salesmen made redundant , well obviously first and foremost we have to sympathise with them . Being made redundant is never a pleasurable experience . However there is no doubt that the pandemic has changed things . The days of salesmen roaming the motorways in company cars calling in at potential customers has ended . Many companies are stopping or at least scaling back this activity . The replacement is a portal where customers (retailers) can effectively see products , ask questions and place orders . They may have a business contact manager helping them either in the office , or more likely working from home . So I can perhaps see the way Hornby are heading . And for most companies this is a sizeable saving in vehicle  leasing , accommodation , petrol (we all know how that’s increased) and maybe salaries, although you do need business support somewhere.   My problem is that we know Hornby really don’t have a great retailer portal/relationship with even Kernow no longer accepting pre orders because they just don’t know if they can get them . It sounds to me like Hornby have a long way to go in having a good ordering system , but that’s where they should be devoting activity, as well as securing manufacturing slots and standardising their QC 

[Andy Hayter]

I do wonder if Hornby are genuinely looking forwards to a short term future that is going to be pretty unpleasant for the disposable income markets.

 

We are all aware of increasing taxes  (by one name or another), increasing fuel costs for heating and for transport.  These will directly and indirectly impact heavily on available disposable income and that means the money for models will reduce.  In turn that means that some retailers will struggle and some will not survive. 

 

Judging which that will be is no easy matter.  Anyone remember Beatties from the 80s?  Market leaders.  They could not possibly fail - but did.   The big and the small will be vulnerable.  

 

Reducing your exposure to a potentially unstable trade market might be seen to be a prudent move if sales can be maintained through other means - and that is the golden question - can it?

[E100]

Hornby are IMO acting like a premium brand whereby stock is artificially limited and in turn pushing towards a low volume, high profit margin model by selling almost exclusively at RRP. Whilst this is understandable in the short term it will not help building their current market penetration or longer term prospects, since it will only work if the quality is above par, which it frankly isn’t right now. They appear to be much more exposed to the market conditions compared to other manufactures suggesting crippling overheads. What these are caused by I don’t know.

 

The other issue is it relies on people actually buying all their products across the range or the high profit margin (on a small overall number) are wiped out. The W1 has been very popular but will the revised A3’s all sell out anywhere near as quickly at £250? I sincerely doubt this but happy to be proved wrong.

[SamThomas]

14 hours ago, Andy Hayter said:

  Anyone remember Beatties from the 80s?  Market leaders.  They could not possibly fail - but did. 

Not surprising really - big stores in prime locations with a product with realativly low margins***(even factoring in the fact that they were part of an importer).

 

*** compared to the fashion industry as one example.

Edited April 11, 2022 by SamThomas
speeling miss take

[The Stationmaster]

19 hours ago, DCB said:

With so much of the retail market moving on line it makes no sense for Hornby for there to be wholesale  retail hierarchy if they can sell direct.  Trouble is they are selling to retired pot bellied collectors and that market is dying, quite literally.  Their stuff is being loaded onto eBay by their executors as we speak. 

Now the thing that you miss is that the number of 'pot bellied old folk' is actually increasing and many of them tend to go back to hobbies they had when they were young.  Oddly somebody has said something similar about two other hobby areas which I know something about and in both cases newbies keep coming along to replace those who fall off the perch with the interesting effect that prices not only tend not to drop but in some cases significantly increase.   So never overlook the effect of the population pyramid which tends to ensure a continuing supply of older folk - pot-bellied or not. 

[The Stationmaster]

13 hours ago, Andy Hayter said:

I do wonder if Hornby are genuinely looking forwards to a short term future that is going to be pretty unpleasant for the disposable income markets.

 

We are all aware of increasing taxes  (by one name or another), increasing fuel costs for heating and for transport.  These will directly and indirectly impact heavily on available disposable income and that means the money for models will reduce.  In turn that means that some retailers will struggle and some will not survive. 

 

Judging which that will be is no easy matter.  Anyone remember Beatties from the 80s?  Market leaders.  They could not possibly fail - but did.   The big and the small will be vulnerable.  

 

Reducing your exposure to a potentially unstable trade market might be seen to be a prudent move if sales can be maintained through other means - and that is the golden question - can it?

Yes - but interestingly talking to people in the trade (both retail and manufacturing) over many years one notable factor is that in time sof economic pron blems and reduced disposable income sales in the model railway area tend to increase.  Now obviously there. is the potential impact of everything going up in price at once - as is happening now - havinga duifferent effect, especially as some r-t-r prices (including Hornby in particular) are going steeply upwards.  But equally the way in which people react to having to tighten their spending has in the past worked to the advantage of the model railway area because what tends to go first is expenditure on expensive meals, or days, out replacing taht with more time at home and a need to c find or create something to do in that time.

 

The pandemic might well havea different impact although thus far it seems to have been to the benefit of hobby retail including model railways but a change will come this year as people resume going on holiday (although that also happened to an extent last year).  But overall the pandemic will/has introduced some new areas of impact on disposable income spending.  And don't forget we're still some way from 40% of average household income having to be spent on food (as was the case not too many decades back) and we're a very long way from morthgage rates standing at 15% which many of us suffered not all that long ago.

[DY444]

23 hours ago, andyman7 said:

It has been said before many times, but the markets and customers that Hornby serve go well beyond anything Rapido, Accurascale, Cavalex etc offer. It is very clear that these specialist manufacturers can pick off certain areas that Hornby are unable or unwilling to serve, but that leaves a considerable marketplace that benefits from Hornby's presence when it is working well.  

 

That may have been true at one time but there are clear signs it is changing.  We've recently had a class 31 and a class 56 announced by these "specialist" manufacturers and before that MGR wagons, which have hitherto been things you could only get from Hornby.  It remains to be seen whether the 31 and the 56 prove to be profitable but the very fact they are in the pipeline suggests the view is that the premium, non-railroad Hornby versions are not all they might be and the market is there for an alternative high end take on those prototypes.  Would it surprise anybody if these newer manufacturers continued to pick off Hornby's higher end diesels?  A class 50 for example would seem to be a clear candidate for the modern treatment given its popularity, livery options etc etc.

Edited April 11, 2022 by DY444

[JSpencer]

On 10/04/2022 at 11:26, Oldddudders said:

The bean-counters would love to do so. Direct sales, no middle-man, no distribution costs etc. All good for pure profit and keeping the share-price buoyant. 

 

I think that is their problem. There is an infrastructure and distribution cost to direct selling. And - possibly - this is more than expected, OR at best requires selling items to the value of X amount in order to be viable.

I guess it is no secret that Hornby are caught between a rock and hard place and are having to contend with waves of newcomers at the same time...

 

To get out of that, they are certainly trying ideas (like the Tier system etc..), but I do feel these ideas are rather too radical/costly in themselves to stand much chance of success. Bachmann is testing by opening their own model shop (so to speak) to try and fill gaps - a much smaller more traditional approach whose success or failure can be easily measured.

 

What Hornby should do is try to look at which parts are successful, understand why they are successful and push deeper into that area. I am still dumb struck that all-new tooling comes out still in far too few liveries (in general) and they still push items from Triang-Hornby days. They still hang on to the idea that they will do blandish liveries in year one, then something tasty in year two... at a time when year 2 gets delayed almost forever and new entrants are running circles around Hornby with a wide range of choice! 

 

[Michael Hodgson]

1 hour ago, The Stationmaster said:

And don't forget we're still some way from 40% of average household income having to be spent on food (as was the case not too many decades back) and we're a very long way from morthgage rates standing at 15% which many of us suffered not all that long ago.

Watch this space !

 

However I think the real question on the future of model railways isn't the fate of the economy, it's whether it will be meaningful to future generations who don't remember trains figuring in the neighbourhood where they grew up, and who went everywhere by car.

[RichardT]

1 hour ago, DY444 said:

That may have been true at one time but there are clear signs it is changing.  We've recently had a class 31 and a class 56 announced by these "specialist" manufacturers

I’d interpreted andyman7’s quote, to which you were replying, as meaning that Hornby, unlike the smaller specialist suppliers, still try to offer a complete toy railway ecosystem to the public (locos, stock, track, buildings, control systems, scenery) under one brand - hence their wider profile.  The smaller specialist suppliers may now be widening their reach *amongst enthusiasts* by picking off “bog standard” items of stock previously associated with main range Hornby, but if you’re a family looking for a home hobby you can’t buy a complete model railway from Accurascale.

 

Richard

Edited April 11, 2022 by RichardT
Missed out half the post…

[andyman7]

5 hours ago, E100 said:

Hornby are IMO acting like a premium brand whereby stock is artificially limited and in turn pushing towards a low volume, high profit margin model by selling almost exclusively at RRP. Whilst this is understandable in the short term it will not help building their current market penetration or longer term prospects, since it will only work if the quality is above par, which it frankly isn’t right now. They appear to be much more exposed to the market conditions compared to other manufactures suggesting crippling overheads. What these are caused by I don’t know.

 

The other issue is it relies on people actually buying all their products across the range or the high profit margin (on a small overall number) are wiped out. The W1 has been very popular but will the revised A3’s all sell out anywhere near as quickly at £250? I sincerely doubt this but happy to be proved wrong.

Every manufacturer now seeks to maintain stable reselling prices; not just Hornby. The discounting that so many modellers got addicted to was and is unsustainable and we can see that (for example) Hattons and Rails have evolved their business models to adapt to this. 

As for sellouts and products that stick around, there is a sweet spot which involves at least some models being on the shelves to sell to more casual buyers.

The quality issue does of course need to be addressed. Hornby maintain supply by using a diversified range of factories and I can't help thinking that this is the root cause of the challenge they have in trying to ensure a consistent quality. 

[Harlequin]

57 minutes ago, Michael Hodgson said:

Watch this space !

 

However I think the real question on the future of model railways isn't the fate of the economy, it's whether it will be meaningful to future generations who don't remember trains figuring in the neighbourhood where they grew up, and who went everywhere by car.

 

I think there's some special magic about railways that transcends personal experience and personal memory that will always make them attractive to modellers. (The same magic probably explains the huge explosion of railway-related TV programs there has been in recent years.)

 

It's difficult to put your finger on where the magic comes from but in the real world it's something to do with trains being imposing but biddable monsters and in the model world it's about being able to bid those monsters to do your will in your own little universe.

 

[Phil Parker]

2 hours ago, JSpencer said:

They still hang on to the idea that they will do blandish liveries in year one, then something tasty in year two... at a time when year 2 gets delayed almost forever and new entrants are running circles around Hornby with a wide range of choice! 

 

I had a discussion about this years ago on the Oxford stand at the London Toy Fair. My question was why a new diecast aircraft wasn't offered in GWR livery - the answer was that a new tooling will largely sell in any colour. You keep the more interesting livery for a later run as it will maintain sales. This was based on their sales data, not guesswork, and seems logical to me.

[eldomtom2]

59 minutes ago, RichardT said:

I’d interpreted andyman7’s quote, to which you were replying, as meaning that Hornby, unlike the smaller specialist suppliers, still try to offer a complete toy railway ecosystem to the public (locos, stock, track, buildings, control systems, scenery) under one brand - hence their wider profile.  The smaller specialist suppliers may now be widening their reach *amongst enthusiasts* by picking off “bog standard” items of stock previously associated with main range Hornby, but if you’re a family looking for a home hobby you can’t buy a complete model railway from Accurascale.

 

Richard

It's a shame then that Hornby puts so little effort into the family market.

[Phil Parker]

2 minutes ago, eldomtom2 said:

It's a shame then that Hornby puts so little effort into the family market.

 

Apart from public-facing TV shows, Playtrains, selling in garden centres, department stores etc...

[G-BOAF]

15 minutes ago, Phil Parker said:

 

I had a discussion about this years ago on the Oxford stand at the London Toy Fair. My question was why a new diecast aircraft wasn't offered in GWR livery - the answer was that a new tooling will largely sell in any colour. You keep the more interesting livery for a later run as it will maintain sales. This was based on their sales data, not guesswork, and seems logical to me.

 

I've heard this before.

And we've certainly seen it with recent Hornby releases (Lord Nelson in particular, no Sunshine livery in first batch). However at the same time the counterfactual has been true - For the Fallen as an initial Class 91 release. And now BBMF in Batch 2. Aside from Skyfall that leaves all the 'interesting' one-off Class 91s done. In Steam, 92220 was announced in the first run of 9Fs from both Bachmann and more recently Hornby.

 

But it seems other manufacturers are not working on the same assumptions. Accurascale with their purple Deltic and a whole plethora of Class 37 liveries, including 'interesting' ones like Network Rail all being done in the first batch. Ditto Hattons and the 66s (although in fairness there are probably about as many liveries as there are individual locos in that case, so they won't run out for a long while)