Articles & E-books

Is California Over-Stored?

Posted: August 17, 2007 01:55 PM
Is California (or your own state or province) over-stored?  Mel shares some thoughts and data on the subject.
Is California Over-Stored?

On the telephone or after the trade show exhibit area closes, the topic of whether various places are over-stored.  The short answer is, very rarely is an area over-stored with specialty comics and game stores.

Take a look at this map of California, where we've displayed all the known comics stores as of 2006-7.  (Click here for the file)

At first glance it appears that the two major market areas (SF Bay Area and LA/Orange County) and the two smaller market areas (Sacramento and San Diego) are very heavily stored.  The prospect of opening a new store would seem daunting.

Not so.  In the last year we've had occasion to look at all four areas, and found multiple high-quality areas in terms of demographics where a new store could be located with an excellent prospect of success.  And by success, we mean a store with higher-than-average potential annual sales.

The same applies to other parts of the USA.  Why is this so?

Cities don't stand still.  Suburban expansion means that new markets are being created in many metro areas, even relatively small ones.  Very frequently none of the existing comics shops are in a geographic position to service these potential customers.  Current areas change through gentrification or other reasons.

There have been major changes in the existing mass-market retail structure in communities, especially with the growth of "big box" stores.  This shifts the pattern of potential consumer shopping trips, and that can have a major impact on your store sales.

Existing comics stores become complacent, unfriendly or take customers for granted.

Way back when, we did a lot of work for one of the early Internet comics retailers.  Can you guess which state in the USA provided them with the largest proportion of their sales?  It was New Jersey.  New Jersey at that time had more comics stores per 100,000 population than any other state in the union.  Why did so many comics customers decide to shop on-line if there were so many local alternatives?

It wasn't discounting, because this client didn't discount on the Internet.  The reason was that such a large proportion of comics stores in New Jersey were poorly operated and merchandised.  All too often these stores had irregular hours of operation, were dingy and unattractive and had a limited assortment of product.  If you wanted this week's Detective or X-Man you'd be served.  If you wanted almost anything else, you were out of luck.

Was New Jersey over-stored?  Hardly.  There were (and are) significant opportunities for prosperous new stores there.

In survey after survey we found that when a properly located, operated and merchandised specialty comics store opens, two to three years later between 60-75% of its customer base consists of people who either were not comics purchasers at all previous to the store opening, or were infrequent purchasers at an existing store.  (Similarly, when an existing store closes, 85-90% of its customers "disappear into the sand" rather than transfer their business to a competitor --- but that's a topic for another article at another time).

Does this mean you should consider opening a second store?  For most of my readers, the answer is probably "no".  The additional workload isn't worth it to them.  But it does mean you should consider moving your store.  Do you know who your customers are, where they live, how often they come into your store to shop, what they purchase and where else they shop for specialty comics products?  If you don't, you should make it your business to find out because you are likely missing out on some real opportunities.