Large Scale Central

Will Large Scale increase its market share?

General Discussion
#1

Will it?
No.
Not the way it is marketed solely as a model train hobby.

I’ll take the risk in claiming outdoor railroads are more than “model trains” – they are moving objects among plants. They annimate the yard. Annimation is interesting — especially to those who care less about model trains. Millions of gardners look for things to hang, to make sound, to move in the wind. They outnumber us.
Meanwhile, NO mfg. advertises to them. Zero. No “annimate your yard!” promotions.

That’s why our neighbors installed a long loop above their pool so the train lights reflect in the pool. “Ah, that is so cool” retorted the non-train-focused homeowner speaking to an interested friend in how to install one in their yard.

How many garden magazines can you count at a Borders book store? I got twelve with NO ads for large scale annimating their garden.

Your answer?

Wendell

#2

First off, I doubt that market share could increase much in the current economy.

Secondly, advertising takes a lot of money, especially in popular magazines. When funds are tight, is it better to spend it on a long shot trying to convert non-train people; or target the people who already have some interest in trains?

#3

Cost of advertising is a negative - good point.
However…this is the key…garden mags want stories – picture stories.
How many owner photo stories have been sent to major garden magazines by Bachmann? Aristo? USA?
How many have been turned down?
Try Marc Horovitz as a source for visual fodder.
I picture the cover of Home and Garden – a front view of a loco framed with an Azalea – with the tag “Annimate Your Yard.”
Gasp!

Wendell

#4

Something like this?

(http://www.jbrr.com/assets/images/IMG_1554w.jpg)

:smiley:

#5

There have been a few nurseries and garden stores that carry the occasional starter set, and there’s generally at least one nursery in every major city that does large scale train displays during their special occasion sales/festivals. There are also a few large scale train stores that started out as nurseries. Beyond that, though, there’s little promotion of the hobby outside the hobby.

I think there are a few reasons for that. From the nursery/garden side, there’s the support issue. It’s okay to sell a train set or two, but when your customers come back looking for more, is there a local (reliable) hobby shop to refer them to? Does the nursery have someone on staff who’s at least marginally knowledgeable about large scale? I think rather than stocking starter sets, a nursery could do well to have a display set up, and any one of the myriad “Getting Started” books on the market. I think it’s far more important to get people the right information up front than get them a train and say “here’s a train and some track. Have fun!”

On the other side of the coin, there’s the issue of train manufacturers and retailers not advertising in the garden venues. Perhaps it’s a matter of not enough return on the investment, perhaps it’s just historically not been done. I think it is an untapped market, but if the manufacturers are going to venture forth in that arena, they need to have a 100% bulletproof product for it to make inroads. When dealing with the unwashed masses, you cannot have a product that needs “tweaking” to get to run properly. It’s got to be simple, it’s got to be reliable.

Later,

K

#6

Kevin-
You say it clearly – and with experience. Reliable products are the key. LGB had the image of reliability.
there is no interest in adding to the cadre of disaffected. The neighbor with the pool and reflecting trains (original post example) fortunately runs a USA switcher. So far so good.
W.

#7

HLW has made an attempt with their barrel planter kit, its been fairly successful, so there is a potential market out there, but I think one of the major factors has to be an initial interest in trains in general, which has historically been on the decline. So to try and sell trains in the garden to a generation thats never had first hand interaction beyond maybe their kids Thomas or a commuter train is possibly a tough sell. Now that said in years past at the BTS there was always a good representation from the general families that were there out of curiosity or for their kids, and once seeing the trains in the sample garden that they always set up often opened the doors to the hobby.

One thing about these casual participants though, they often are not interested in running a scale Dash9 around scale 20’ diameter curves on a layout based on a scale reproduction of the Illinois Central, they just want to run a cute engine around a loop of track and thats something that the manufacturers are in danger of losing sight of. If they want to grow their market, they have to address the starter set market, because THAT is where the market begins for most poeple. Bachmann is introducing 2 starter sets based on the Davenport, a mining train and a logging train, which I think are definetly a good move, Aristo’s Critter and switcher sets are also a good place to start, but any manufacturer will need to take this market seriously if they want to continue to attract new hobbiests

Advertsing in garden magazines IS a good idea, you dont need to have full page ads to get the message across, but having the occasional garden layout in a magazine would actually be a better way to spread the word, now that said, how many garden railroaders have even considered submitting their layout to a major gardening magazine or even to the smaller local magazines, they like the train magazines, are always looking for submittals, I dont think they will care if the garden is really good and it just happens to have a garden train in it, in fact that would make a good hook for the reader.

#8

Wendell, there have been people who tried to promote this to the golf crowd, the hardcore gardening crowd, the Mickey Mouse fraternity etc. etc

For some strange reason most of the targets considered it an amusing interlude and then moved on to the next “greatest and latest” hobby, which meant sure there were additional sets sold. The problem isn’t the initial sale, the problem is the follow through and follow up. Of course that’s just my opinion and I know very little, I freely admit! :slight_smile: :wink:

#9

I actually did some pretty serious market research on this about 5 years ago when I was unemployed and considering getting into LS manufacturing.

First off, there is very little reliable market data available. All the magazines from GR, to MR to Model Railroad Retailer are controlled by Klambake. They want to sell advertising space, so their demographic data on market size and growth is skewed in favor of selling space. Even at that, the picture their data paints isn’t pretty for any scale.

I approached Lewis Polk for information on trade organizations that might help in my research. There really aren’t any for Large Scale. The Model Retailer’s Assoc. is pretty much limited to smaller scale marketing data. Of course, Lewis wouldn’t share his data or his true view of the market future. In his position, I wouldn’t either.

What I was able to put together, which is mostly an opinion because there is very little fact available, was that the market is not sustainable for more than 10-20 years beyond 2003. Like other shrinking markets, consolidation will take place. Small successful companies will get absorbed by the larger ones and the less viable will disappear. I surmised that my venture may be profitable for a time, but would eventually succumb to a shrinking market. My problem with moving forward was lack of a viable exit strategy - I only wanted to be in business for 10 years and then sell. My research indicated that I probably would not have a salable business after 10 years time.

So, to answer your question based on my research of 2003 - an emphatic NO.

#10

With the baby boomers starting to retire there should be a large portion of this group that could be hooked on LS trains. A lot of retirees are looking for something to take up thier time now that work they have been doing for 40 years has ended. When these people take a job at MacDonalds or as a greeter at Wal-Mart in most cases it is not for the money. It is to have someplace to go and people to interact with. They need a reason to get up and get moving. I think the LS manufacturers are missing the boat, or in this case the train, and need to get together to promote the hobby and not just try to sell their individual products. An industry sponsored nation wide program demonstrating the great advantages of being involved with model trains in the garden, or even in the basement, is needed. They need to form a LS train manufacturers association. Then each of them has to contribute some seed money to hire a firm and come up with a promotional plan that deals with all aspects of the hobby. Model building, train history, train operations, electrical controls, gardening around the train, clubs to join, etc: I find myself spending more and more time on my train and loving every minute of it. At 68 I am pre-baby boomer and I lived near a rail line where I saw a lot of steam engines so I probably have more interest in trains. But I think there is a lot that can be done if the companies in the industry start thinking more about recruting their future customers and not just trying to beat the competition in sales of today’s products.

John

#11

The “World’s Greatest Hobby” shows were originally designed to promote model railroading in general to the public, and were (originally, at least) marketed to the masses, not specifically to the hobbyist. I don’t know the exact driving forces behind the shows, but I believe Kalmbach and some of the larger manufacturers (Bachmann, etc) were behind it.

Personally, I’m not as pessimistic as Jon is about the future of the hobby. When I was a kid in the 80s, the hobby was bemoaning the fact that it was likely going to be extinct in 20 years. I can’t say empirically if the hobby is stronger or weaker than it was 20 years ago, but it’s definitely not on its deathbed. I think John Sephar’s signature line sums up exactly why that’s the case. It really applies to each generation. “Day Out with Thomas” is by far the biggest money-maker for many tourist railroads and museums. It’s not the 60-somethings or even 30-somethings that drive that success. It’s the little ones. Plant the seeds, and in 30, 40 years–when they have the time and extra income to pursue a hobby–it has a tendency to take root.

Later,

K

#12

Kevin,

I don’t know that Jon is pessimistic, I think he is just a realist and it was hard to find data to support a good business plan.

#13

Gee, look at what all is available today, compared to when I started 16 years ago. I’d say the hobby was in great shape. If it wasn’t we would not have so many companies making such a diverse number of offerings. There is always gloom and doom in hobbies, but they keep growing.

#14

Thanks for stickin’ up for me Ric :slight_smile:

Kevin - One of the reasons for my conclusion was related to what John Spehar mentioned: The baby boomers. As the boomers get older the market grows. With an exception for the current global economy, we are in the that growth curve now. There is (or was) more and more product becoming available every day. As the boomers get too old for modeling and/or start dying off, the market must shrink. There just aren’t enough butts coming up to fill all the seats. Just look at the census data on age distribution of the population.

I think Klambake’s “World’s Greatest Hobby” initiative was a marketing attempt to soften the projected decline by increasing the number of young people getting into the hobby. As you observe, Thomas the Tank Engine is doing a great job of this. Ol’ Thomas is getting them early and making fanatics out of many of them :smiley:

So even though I don’t think the LS market will be sustained for a long time, I do believe it will grow in the short term. So perhaps my Emphatic NO wasn’t the best answer.

#15

Jon’s answer is probably the closest I’ve seen on any forum. Although I do believe the correct answer is an emphatic no. Large scale is smaller now than it was 15 years ago. There may be more product available, but it is not in any way a sustainable market for a manufacturer. If you looked carefully at the ECLSTS most of the products that were being sold were from old dealer stock. The hall was full of LGB, and that hadn’t shipped in two years. The inventory story was the same with the other manufacturers. Dealers were selling stock they had been carrying for years, that was not caused by the economy. The fact that the show generated almost zero new sales for the big players was. The dealers were interested in selling down their inventory and not ordering any more.
Much of the new and larger products that have been introduced in the last few years were nothing more than a gamble, hoping that the market would develop for them. The gamble has not paid off. If LSers knew the actual quantities of locomotives and rolling stock produced they would realize there just isn’t a large scale market at all. The economy certainly isn’t helping the situation, but it is not the cause. Large scale will become a cottage industry with a few small mom and pop companies and few if any large manufacturers.

George

#16

In my case there is some truth in the fact that as people get near retirement they look for hobbies to sustain them. I was interested in trains when i was very young but my parents could not afford such a hobby for me. (the third of 8 children). As I gre older my interst was subdued and I took up other interests, Cars, girls, drinking, fighting etc etc. With retirment looming I began to purchase RR equipment over the last 3-4 years to try to get all that I may need before the point where I will no longer be able to afford it.
i don’t think I am the only one like this, many people I talk to are intersted and want to see what i am up to.
As its been said get them while they are young and you get them for life.
Dave

#17

I knew “pessimistic” wasn’t the right word when I wrote it. I have no doubt Jon’s views were well thought out, as I’ve had similar discussions with Allison relative to a few ventures that have presented themselves to us, and we decided there wasn’t enough of a baseline business for it to be viable. My perspective is simply that I’ve been hearing “doom and gloom” forecasts from hobbyists for as long as I’ve been in this hobby, and I have yet to see anything close to what “they” predict.

One thing that I think plays into the equation that hasn’t really been talked about is the existence of current stock, and how that plays into buying patterns. There’s no “law of conservation of locomotives” in play. For every loco produced, there isn’t one scrapped. (Even with QC issues discussed ad nauseam in other threads.) These trains take up space, and people can only store so many of them. As such, people do hit a saturation point where they have to either not buy anything new, or start dumping old stock into the market. Essentially, the used market becomes something of an extra manufacturer. In down economies where people are selling excess trains to make a little extra cash, that bites into the manufacturers even harder. As a result, the hobby may not be shrinking quite as quickly as the manufacturers’ bottom lines would indicate.

Later,

K

PS - an e-mail from a manufacturer indicated that a group of large scale manufacturers got together and dumped several hundred thousand dollars into a publicity campaign aimed at the garden magazines and garden market. The return on the investment was non-existant.

#18

Another problem is the new technologies today, especially when it comes to the younger generation and in some cases the older as well. Its hard to compete with the video games, computers and cell phones. KIds today are getting lazy and show no intrest in being creative etc… In areas rural areas where the parents have to comute 1 1/2 one way to work does not help. Kids come home from school to an empty house. What do they do turn the TV on or get on the computer. WHen I was growing we were always outside with the local kids. Today how often do you see kids out riding there bike etc… There is no doubt that this has not helped with the hobby. I have seen this trend with most hobbies. People dont fish, hunt like they use to. Part of it is hobbies are not cheep but if people can get the new cells and computers they can sure afford to get into a hobby.

#19

Shawn,
I think that is a regional pattern. Kids still play hookey to fish and hunt around here. Opening day of Deer Season is a legitimate reason to miss school. I will agree that sports are more organized and sand lot ball has fallen the victim of baseball/basketball/football summer camp. Growing has to be done while they sleep, there is no time for it during the normal day.

#20
Ric Golding said:
Shawn, I think that is a regional pattern. Kids still play hookey to fish and hunt around here. Opening day of Deer Season is a legitimate reason to miss school. I will agree that sports are more organized and sand lot ball has fallen the victim of baseball/basketball/football summer camp. Growing has to be done while they sleep, there is no time for it during the normal day.
Opening day of deer season is a holiday around here too. Fishing, motorcycles and ATVs are big too. But go to any of the larger cities nearby and you can't go into a restaurant without seeing children texting and playing video games, at the table. The parents are just as bad, yacking on the cell phone. Ralph