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In lugnet.market.shopping, Frank Filz writes:
>
> Of course ultimately, if AFOLs could manage to restrain themselves and
> only buy on deep clearance, we would most certainly see our impact on
> TLC vanish.
Why is that. When I go into a WM and buy something at 60-70% off retail, I
doubt that TLC even knows it happens. The store manager might know it happens
(esp if he sees me wheeling a buggy full of clearanced sets towards the
register). The funny part is: most employees and managers think I'm heading to
the flea market with the stuff. I try to explain it like this: think about
automobile recyclers... thats what I do with Lego. Then the light clicks on and
they get it (sorta).
> While it is true that if we buy sets on deep discount TLC
> still gets their share, the retailers should be paying attention to
> their clearance quantities and refining their ordering (of course they
> will never get it perfect), which would send a signal to TLC.
As long as the retail channel is a 'push-down from coporate' type of setup, I
don't know if they will ever get it that fine-tuned. Last week I learned
something about WM. WM sizes their stores by a class number. A class 1 store is
a really dinky little place. Class 10 is a big supercenter. WM allocates shelf
space for different product lines based on the geographic region and the store's
class. So, some stores (with a certain product mix) may happen to be in a
economically depressed area and not sell everything. Overall, the chain still
makes money or they would not be selling it. I doubt that WM would ever
eliminate Lego from the smaller stores (altough they may carry a smaller
selection).
I suspect that the bean-counters have a 'blended' target profit for Lego. They
are less interested in how many sold at retail and at which markdown level, then
making that target. Exceeding it is even better. If they are not making that
target *or* have too much inventory lying around, they 'dial back' the orders
for next year (as K-Mart appears to have done). Keep in mind that the toy makers
are probably showing next years products to the big buyers about now. They have
too, so they can book the initial orders, schedule production, etc. WM will be
doing inventory within the next 2-6 weeks. That inventory (along with the sales
info from the scanners) will go to the buyers so that they can figure out what
sold and what did not.
One tidbit: Star Wars did not sell as well as expected (referring to all the SW
toys, not specifically the Lego items).
Fascinating stuff.
Ray
fut to .market.theory
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Message is in Reply To:
 | | Re: AFOLs as cheapskates
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| (...) One serious factor for me is that if I waited until I could get sets at 50% or better discount, I wouldn't be doing very much with pirates (I've bought two Crocodile Cages at clearance an that's it). I also probably wouldn't have that much of (...) (24 years ago, 15-Jan-01, to lugnet.market.shopping)
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