The untapped market and how to get a piece of it
by Dean of Dean’s Cards
Originally written published November 20, 2005
The question that seems to be on everyone’s tongue for 2006 is “How do we bring the kids back into the Sports Card Hobby and then keep them for a lifetime?”
The market potential for this segment is ripe. Today’s kids have more time and money than any previous generation. So why aren’t kids buying sports cards? Many people have theories on the subject and the two most popular theories on why kids no longer buy baseball cards that we keep hearing are: a) there are so many card issues each year, and b) that kids are distracted by other options for their free time. Although there is some truth to each argument, I think that both of the above reasons miss the main point.
The purpose of this brief is to address each of the popular theories on why young people are not buying sports cards, present a new perspective on the challenge and then offer a solution on how to bring the kids back into our hobby.
Argument #1: For those that jumped up and yelled “There are too many cards issued every year. Kids can not figure out what to buy!”
OK, I hear you. Now please kindly sit back down and consider the following. So, is the number of products issued confusing kids? The answer is “Maybe So”, but more products, also means more competition. More competitors in a market offer a better selection for the buyer, improved products and competitive pricing. Economics 101 taught us that these economic factors are all good things for the consumer in any industry.
The argument of “too many choices of cards to buy” makes as much sense as saying “Life was much better when the only cola choices were only Coke and Pepsi”. Was life simpler? – Sure, but better? – Definitely Not. What percentage of us still drink only Coke or Pepsi? It may be a little more confusing these days when buying cola, but we seem to make out alright and the result has been ever increasing soda sales.
Back in the “good ole days, we had only had only three TV channels to watch, one type of sedan from each car manufacturer and could only buy plain potato chips. Who as a consumer wants to go back to that? Competition has produced a great selection of products, more specific niches and greater overall sales.
The people that get most frustrated with the number of sports card issues are often the old time collectors – myself included. We remember when there was just one issue of cards, but today’s kids do not. This multi-set environment is all that they have ever known.
It is not realistic to blame the troubles in the hobby strictly on the numbers of products available for purchase. We have been hearing the “too many cards – the buyer is confused” excuse for so long that we now except it as a fact. The truth is that this theory violates most economic principles.
Economic Laws dictate that having more products for buyers to choose from has more positives for the consumer than negatives and will eventually produce and overall result of higher sales. Economics principles also say that reducing the number of products may benefit the seller (not the buyer) through improved economies of scale.
The number of card issues will finally begin to decline in 2006, but I doubt the gross number of cards sold will increase because there are less cards for buyers to choose from. If economic principles hold true, the total number of sports cards sold in 2006 should decline compared to the cards sold in 2005!
Argument #2: “There is too much neat stuff (other than sports cards) for kids to buy today…”
There is a lot more competition these days for a young person’s dollars, but please remember the average child also has more money to spend than we did as kids. The sports cards market can still get a smaller piece of the overall pie and still expand the hobby.
I do not agree with the statement that sports cards have lost their appeal to kids. It is just not true. Kids still love to play with cards. The Pokemon craze proves that. When my son was 5 years old, he and his friends would sit around for hours playing Pokemon.
I love games and spent several hours one afternoon trying to figure out how to play the game of Pokemon. I eventually staggered away dazed and confused. The game is truly incomprehensible – not to mention BORING. No one on planet Earth seems to really understand the rules to this senseless game, but lack of formal rules does not even slow the kids down. They just make up their own rules and imagination takes over. The pleasure for the boys seems to be collecting and then playing with the cards.
No one is saying that external factors have not affected the sports card industry – but the bottom line is that these are factors that we as dealers can not influence in any big way. So even if I am wrong about this, our most productive course of action is to focus on factors within the hobby that we dealers can change, improve and innovate.
The real issue facing our hobby is that sports cards are difficult for the kids to physically get to and buy.
The problem is that the industry is still trying to sell baseball cards in the same way they were sold fifty years ago. Most dealers insist on using the same tired “Point of Sale” techniques that were in place when we ourselves were kids. It is time to wake up and smell the bubble gum! The buying patterns of kids have changed.
The ole “Sales are low because the product stinks” line is the oldest excuse in the book. This excuse removes the blame from both the dealers and the manufacturers. Could it be that dealers have not changed their marketing strategy to suit the contemporary consumer?
In our particular industry, the product is established and proven. Baseball cards have thrived for a century. Manufacturers have done their part in continuing to develop products that kids want but the baseball card “is what it is”. The card itself has even evolved and more attractive today than anytime in the past.
This point is simple to prove. Just hand any sports minded a boy a pack of sports cards and watch the kids tear them open! They love them just as much as we did as kids.
The product is still good. It is the outdated marketing and sales model that needs to be brought into the 21st Century.
Let’s explore how we bought baseball cards when we were kids. We earned a couple dollars from doing our chores, then hopped on our bike and rode a mile or two to the local “Five & Dime”. When we got there – we spent some of the money on candy. After that, there was usually money left over for cards.
America has changed. Today, few kids even live near a local drug store and the “Five and Dime” has gone the way of the Milk Man. Enter the Wal-Mart Super Center! Even if kids live within two miles of a place that sold cards, which the vast majority do not, most parents would not let them go that far alone due to modern safety concerns. Kids are now dependent of parents to drive them to either the Wal-Mart or across town to the local baseball card store. That –in my humble opinion- is a real problem.
Solution: If we want kids to buy sports cards then we must first market directly to the kids and then provide them an easier way to buy the product.
For the last twenty years, the marketing effort for sports cards has been directed at the existing adult collectors, mainly because they have much more money to spend. Today, the problem is that baseball card sales are declining in the adult segment in the hobby. Tougher economic conditions force companies to focus to develop new markets. The only logical new target market for sports cards is the young boys. (How strange does it sound that “Kids are an untapped market for baseball cards?”)
So how do we address this changed environment? There is a simple answer that has been used in so many industries through out history: We implement new technology. In this case the improved technology is the Internet. So why not sell cards to the kids online? In fact, there is not another viable option.
The main reasons that dealers should market online and target kids are clear and overwhelming:
- Boys (as a market segment) are a much more computer literate market segment than the middle aged men that we currently market to and look how successful online sales to men have been over the last decade.
- Kids know how to spend money online. They all buy everything from toys to e-tunes.
- Today’s youth have money to spend.
- Kids have much more free time to spend on hobbies than middle aged adults.
- Just like the “Baby Boomers” that the Sports Card Hobby has historically targeted, the children in the U.S. are a very large segment of the population. i.e. There are a lot of them out these to sell to.
- Young people are less mobile than our adult customers–as most are too young to drive. It is far easier for them to buy online than to ask one of their working parents to drive across town to the nearest store.
- Baseball Card Collecting remains one of the few things that a father and son can do together and both enjoy.
The “kid” market is ripe, has plenty of dollars and it just waiting to be tapped – but for all the noise about bringing kids back into the hobby, no one markets directly to this market segment. This is probably more the fault of the vendors than the manufacturers. How many dealers have created websites designed to attract the 8 to 15 year old card collector? If there is one - I have not seen it.
The internet loves and rewards specific niches and this one is wide open. An ideal kid friendly site would have games, chat boards, free downloads and lots of graphics. It would not be that hard to design. Just visit the sites that are most popular with kids and you can get some great ideas. We do not have to “reinvent the wheel”, but only copy what is working to other industries. Kids could find scans of the cards of their favorite players and buy them online.
At some point a sports card dealer will be innovative enough to figure this out. The first dealer that clues in on this and acts on it - will be rewarded. Manufacturers would be wise to support these efforts. I feel that we could do it at Dean’s Cards, but we have our hands full with vintage cards.
It is possible for card store owners get in the game and start selling to small niches of the hobby. It could be games, figures, statues, etc. Use promotions that you have been successful in your store and tested within your community. If these programs work on a local level, why wouldn’t they work (with a few modifications) on the regional or even national level? Think BIG! Conquer the World.
The e-store should be treated as a separate business for card dealers, but it could also benefit walk-in traffic for the store. Internet sales would allow stores to keep a wider selection of product to offer your walk-in customers. This would attract people to your store from much further away and it is proven that the number of miles that a person drives to get to a store is directly correlated with the amount that he spends when he arrives.
A simple website can be designed in a few hours for several hundred dollars. Start slow and expand as business dictates.
Examples in other industries
This is the same basic trend that has revolutionized the music industry over the last two years. The music executives fought innovation for years and insisted that kids physically go to the mall to buy their music. IT DID NOT WORK! The result was Napster. Kids started buying tunes online and the music industry was forced to adapt its 20th Century point-of-sale marketing techniques or die.
Please notice that the music did not reduce the number of albums that are released – but increased the number of issues! The sports card hobby has now reached that same point as music industry was at a couple years ago - modernize or continue to decline. The good news is the many of the old music stores have adapted, survived and thrived by expanding the type of products they carry. Baseball card stores must adopt the same type strategy or the current trend of store closures will continue.
Conclusion
Most of us realize that the traditional sports card store is under tremendous economic pressure. This current buying trend in the card collecting hobby first appeared a decade ago. As the internet and e-commerce has become more popular, the local “physical” card stores have steadily disappeared. There is a strong correlation between the two events. Unfortunately, for the physical sports card store there is no quick fix to this long-term trend. But this trend has also opened new possibilities for innovative entrepreneurs.
The recent reduction of new card issues market may eventually help the hobby – but if anyone thinks reducing the number of new card issues from 120 to 60 – is going to reverse the current collecting trends and its effect on the local card store - they are mistaken.
The economic change in the sports card hobby is a classic business school case of innovation affecting an existing industry. New technology changes the consumer’s buying habits. Vendors either adapt or disappear.
Overall eCommerce sales are doubling every year. It is faster, cheaper and easier for the collector to buy baseball cards online. Many baseball card buyers have proven they are willing forgo the personal interaction given in card stores in order to obtain the convenience, increased selection and discounts of buying online.
The store owners who thrive in the coming years are going to be the ones that embrace technology and use it to promote and their stores. Card stores can certainly maintain their local presence, but to they must become more “national” in the way that they sell their products.
The baseball card store is not disappearing - it is just becoming “virtual” instead of physical. The e-store has a better selection, is more cost efficient and is more convenient via the internet. The Physical Location of the store was very important twenty years ago. Owners would pay top dollar for a prime location in a busy mall. This is no longer the case. Dean’s Cards is the “case and point”. We sell to all fifty states.
I believe that Dean’s Cards is a model of the 21st Century Sports Card Store. That said, if we do not continue to improve and adapt – Dean’s Cards will also get pushed aside by more innovative entrepreneurs.
The dealer that does not implement new technology will be at a huge competitive disadvantage and will have a very hard time competing in the 21st century. The few select sports cards stores that survive will serve specific niches. The exception to this rule will be a few stores in the major metropolitan areas.
If it is possible for Dean’s Cards to come out of nowhere and lead the vintage card niche in online sales – it is certainly possible the progressive “brick and mortar” card store dealer to do the same thing within other niches of the hobby. If it is possible to market vintage cards to middle aged men online – then it should be much easier to pick online themes that will attract younger collectors (who are much more computer literate) to the hobby.
Closing Comments
The goal of this brief is to bring some self-awareness to the hobby that I love. There is no way we can fix what is wrong in the sports cards hobby until the real problems facing us are clearly defined.
The consumer is always the ultimate judge. Sports cards dealers are slowly figuring out the things discussed in this paper and will adapt in time. The innovative dealers will continue to thrive. The weak will disappear.
I am not discouraged by the negative comments that I sometimes hear about the sports card hobby. The balance of power has shifted. Many of the “old guard” that has dominated baseball card collecting for decades is being replaced by a new breed of innovative dealers.
The displaced always make the most noise. The card dealers that are doing well are the ones quietly going about improving and growing their businesses by giving cards collectors what they want.
Less new card sales may be a little frustrating to some, but will hopefully have the long-term result of a stronger hobby. If this paper can assist anyone associated with the hobby in “parting the fog” and then craving out a new niche, then the paper has served its purpose. I truly believe that the best times for the sports card hobby are still ahead of us and kids will still be collecting baseball cards a century from now.
Take Care,
Dean
Dean’s Background
Dean’s background includes an Undergraduate Business Degree from Auburn University and Masters in Business from the University of Southern California. He also has 15 years of product marketing and sales experience in the software industry, where he helped businesses use technology to achieve sales.
Dean escaped Corporate America and started Dean’s Cards in 2002. In a few years, Dean’s Cards www.deanscards.com has become the largest online store for vintage sports cards. Dean’s Cards features an online vintage card inventory in excess of 100,000 cards. No other site compares.
****Update to original article****
As I was cleaning up the hard drive on my computer this weekend, I came across this article that I wrote four years ago. The article was originally written as a submission for a contest held by Sports Co0llector’s Digest to win a free scholarship to the Hawaii trade conference that they sponsor. The theme of that year’s show was “How to bring kids back into cards collecting”.
Someone else was awarded the free scholarship. The Hawaii conference was originally created for the sports card shops and it seemed that the judges were looking for marketing solutions that would reserve the trend of the disappearing retail sports card store – without really asking shop owners to make any major changes. The conclusions included ideas for special events and ways to give better customer service at the card stores and card shows. In short, keep doing the same thing, but do it harder.
In fairness, I am not sure anything can halt the decline of the sports card shop. The real problem facing the card stores is that technology has changed the hobby and America’s buying patterns. The internet has provided a faster, better and cheaper way to collect sports cards and goes together like beer and hot dogs.
It is very interesting to me to see what I was thinking back then, how much of it that we have implemented into Dean's Cards and also how much has changed in the hobby.
The following things have happened in the four years since I wrote the original article:
- The card manufacturers have greatly decreased the number of card issues.
- Overall sales of sports cards continue to decline.
- The professional sports leagues (MLB, NFL, NBA) have all reduced the number of manufacturers licensed to produce cards.
- Sports card stores continue to disappear. According to SCD there are now less than 500 card stores, down from over 5000 in the early 1990’s.
- The Hawaii Trade Conference was moved to the mainland several years ago.
- The SCD magazine continues to shrink in size. Some of the recent issues are now under 40 pages.
- Dean’s Cards has since moved out of my basement into a 1500 sq ft office in 2006 and moved again to our current 3000 sq. ft. office in 2007.
- Dean’s Cards (is the only dealer that I know of that) offers representative scans of almost all of the cards that we sell.
- Dean’s now has 800,000 cards online and has grown several times over in both sales and number of employees.
Thanks,
Dean
December 14, 2009
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