Monday, February 19, 2018

2018 Comics Retailer Survey

Recently I was asked to participate in Publishers Weeklys annual review of the comic book industry. You can read the article by Shannon O’Leary HERE. I was quoted a number of times in the article, but a lot of people, mainly my customers at Phantom of the Attic, have asked about the whole questionnaire so I decided to share it here. This really only of interest to anyone who wants to know more about the state of the comic book retail industry. My caveat here is that my answers reflect my opinions and observations based on 21 years of experience in one specific store. I don’t claim to have all of the answers or to speak for other stores. We all have different experiences.

1) What were your best selling graphic novels in 2017?

Saga continues to be our bestselling series of graphic novels for the third or fourth year now. We’ve had a lot of success with The Wicked and the Divine and East of West because they are books that a couple of our employees push pretty hard. In general the Image TPs top the list. They are self-contained series without crossovers, so people can get into a series and, quite simply, know what to read next. The introductory $9.99 price point doesn’t hurt either. We moved a lot of My Favorite Thing is Monsters. Though there are few specific standout titles in general we do really well with the FirstSecond catalog. World of Edena by Moebius did extremely well for an expensive HC. We’ve had customers regularly asking for Moebius stuff for years so the prospect of his work finally coming back into print here is exciting.

The DC Rebirth TPs increased sales over DC from the past couple of years. Marvel TPs are mostly dead stock for us. I can’t put my finger on why, other than as another indicator of the downturn in interest in Marvel. There are many Marvel trades we don’t order at all. We only move a couple of each of the X-Men TPs when they come out. The Epic Collections do pretty well with an older customer base.

2) What were your best selling periodicals in 2017?

The biggest selling comic of the year for us came the week before Christmas. Ed Piskor’s X-Men Grand Design sold in numbers we haven’t seen for a single comic in many, many years. We have a certain hometown advantage here. Piskor is a local who has been a good friend of the store since he was a kid and we have been promoting his work for a long time. He came for a signing on the day the book was released and it was the second biggest sales day of the year, only topped by FCBD (to be fair, a lot of the people who came to see him did a lot of Christmas shopping while they were there, so his book didn’t account for all of it).

Some of the obvious answers for the remainder of this question... SagaWalking DeadBatman. DC has done better since rebirth but the numbers are still not spectacular. Marvel is down across the board. Kill or Be Killed sells more than any single X-title and Saga beats them several times over. We’ve always been an odd store in terms of market trends. Our clientele is more diverse thanks to the proximity to several major universities and our staff has always recommended more off the wall stuff (when I started working here in 1997 we sold more copies of Matt Wagner’s Mage than we did of Spawn).

2a) Which one of those formats - periodicals or graphic novels - is selling better overall?

It’s close. Periodicals are still the biggest category, but the gap between the two continues to close.

3) How was your 2017 holiday season? Was there a standout book or periodical?

It was a mix, but a little down. Our student population leaves town a week before Christmas, so we lose a significant portion of our customer base right before the holiday. This has always been the case so we plan for it. Holiday shopping makes up for it, but it’s more of a balance. The good news is that the students all come back with Christmas money in January, so that month isn’t quite as dead for us as some other stores. As stated, X-Men Grand Design was huge. Some bigger ticket items did better for us than at other times of the year. The problem with big ticket items is that most of the time we simply can’t compete with Amazon prices for those so we’re always at a disadvantage.

4) What is your current mix of stock like? 

We carry a little bit of everything. Marvel, DC, and Image make up the bulk of the weekly shipment, of course. We’ve done well with select titles from Boom, Aftershock, and Black Mask. IDW and Dynamite are definitely down. Most books based on licensed properties have a specific fanbase who pick up those titles but don’t even look at anything else in the store. As I’ve mentioned, in terms of graphic novels we carry FirstSecond, Drawn & Quarterly, Top Shelf, Fantagraphics, and lots of others. Most of these publishers don’t do monthly periodicals but we are intent on representing them.

I was talking to another local retailer recently. His store is in a more suburban area and he has traditionally had a more difficult time building readership for anything outside of Marvel, DC, and select Image titles. As a result these make up a much higher percentage of his stock than ours. He has had a really difficult year because with sales down on mainstream titles he has very little to fall back on. We move a lot of Raina Telgemeier, and Giant Days, and Copra, and many others. None of them in the numbers of Marvel and DC but enough that it makes a huge difference in our bottom line. If we didn’t have a market for these we would be in trouble.

I’ve read a lot of complaints this year about the concept of diversity and how it’s hurting retailers, and that just sounds ridiculous to me. Your store should be welcoming to anyone who wants to read comics. I hear stories through social media and from friends of people who have gone to comics shops and felt unwelcome and uncomfortable because of their race, or gender, or sexual orientation or whatever. Retailers who have simply told them they wouldn’t order certain product for these reasons. Okay, obviously I have strong feelings about this issue, but bottom line is, Dude, you’re losing business. We have a young part time employee who identifies as queer and they have told me horror stories of the way they have been treated in other stores simply for wanting to order a copy of Blue is the Warmest Color. The world of comics has always been a safe space for me (an old, white, straight guy), and I want it to be that for everyone. Once again, whatever your politics, all of these categories are a growing demographic for our product and if you don’t want to sell to them somebody else will. Send them to my store. I’ll take the business.

Has everyone completely missed the central metaphor of X-Men? Sorry... rhetorical question.

Next, diversity of product is essential. If you are obviously losing Marvel and DC readers because your customers are just not liking them anymore, what are you offering them as a replacement? Are you happy just losing the customer or would you rather keep them by turning them on to something they may have never seen before? If you don’t stock an alternative to the mainstream then when people get tired of it they are just gone, along with their business. Comics are more than just superheros and it is incumbent on us as retailers to educate ourselves and our customers about the wide range of available material, for all tastes. We don’t have to like everything that comes in, but we need to be aware that there are many more tastes out there and then figure out how to tap into that. Our job isn’t just to turn readers on to what we like (though that’s certainly a part of it). It is, more importantly, our job to connect them with something they like. What are you doing to make your store welcoming to a more diverse clientele? We have lots of customers who simply like reading and books, and have never had an interest in superheros. What do you have on your shelves for these people? Can you talk about this product and create a market? It’s not on the back of Marvel and DC to create customers for comics. That’s our job.

I realize that diversification of stock can be difficult for a small business with Diamond’s non-returnable policy. Deciding where to put your money any given month is difficult and I realize that taking a chance on My Favorite Thing is Monsters, a $40 cover price for an unknown creator, can be tough. But, pay attention to the world outside of the mainstream market. That book made every ‟Best of” list last year, was covered in Entertainment Weekly, and the New York Times, and lots of other non-comic markets. If you don’t have it in stock I guarantee you Barnes and Noble and Amazon will. Don’t order that seventeenth Deadpool special or non-essential big event crossover this month and put some of that money into something that may attract a new readership, and educate yourself on how to sell it. Next time a customer comes in looking for something for their 12 year old daughter you can recommend Smile with a... well, smile. :-) Bang... New customer for life.

Now, to be fair about our store, we don’t mix it up very much with merchandise. We have always thought of ourselves as primarily a bookstore so we don’t invest in a lot of diversification in other stuff. We get statues, and action figures, and Funko Pops, but we are very selective when it comes to these. The price point and the low markup on the first two are prohibitive. Everyone is selling Funko Pops and we kind of see it as this years Beanie Babies, so while we get a few that tie into comics specific properties we don’t go overboard. We’re happy to order any of this stuff for our customers. Yesterday we sold three giant, really expensive James Bond figures to a regular because he is always good for it, but there is no way we would ever just stock these for the shelf. Some action figures are only offered in case lots so we refuse to take the chance on selling twelve figures. Just yesterday we had a regular customer ask about some Mego action figures. He wanted four out of the twelve and completely understood why we couldn’t invest in eight more figures he didn’t want.

4a) What’s the mix of Big Two to non Big Two titles? 

I covered some of this in a previous answer. Big Two still account for the biggest percentage of our weekly comics order. I don’t have specific numbers but, depending on the week they total half to two-thirds of our order. My guess is that’s lower than many other stores.

4b) Can you give a percentage breakdown of your stock by publisher?

Not specifically. The Big Two are about equal, though DC has always had a slight advantage in our store. That varies week to week.

4c) How much are you ordering from the Direct Market?

Most of our weekly shipment comes from Diamond because that’s the only alternative for mainstream books. We supplement our graphic novel stock through Ingram a couple of times a month, mainly for books not offered through Diamond.

4d) Have there been any notable events or sales initiatives by 
Marvel, DC or Image that effected sales in the past year? Are there any other publishers who have helped or hurt your sales?

Free Comic Book Day is always good, and every year we do slightly better than the year before. Unfortunately the excitement of that day doesn’t continue into the rest of the year. Every year we see faces of people who seem really excited but then we never see them again. Marvel’s launch parties are a bust. They send a few free flyers but nothing much else to help with the event. We could probably do more to drum up excitement but we’re all old and not very excited by these. :-)

The big events have burned everyone out. The Big Two always say that they see increased numbers on these events, so of course they continue to do them. What they don’t see are the unsold copies cluttering up our rack. It seems, after forty years of the Direct Market, that Marvel and DC still don’t recognize that sales to retailers do not equal sales to actual customers. Maybe they simply don’t care because they are getting their sales, but in the long term stores lower their orders or go out of business because product doesn’t end up in the hands of actual customers. Sometime this year someone at Marvel was bragging about how a $9.99 issue of Deadpool was one of the biggest money books of the year and how what that meant to him was that price wasn’t a barrier on a popular book and this was the way to go. First of all, when you more than double the cost of an issue then of course it’s a big money item. It’s not indicative. What I saw was every single Deadpool fan bitching about the cost. Most of them still bought it but they felt they were held hostage. To continue reading a story they were invested in they had to shell out extra money. Several didn’t buy it, some dropped the title from their pull list because of the price so not only didn’t we sell that issue we lost sales on future issues. Some of them didn’t buy another Marvel comic they wanted because of budget. This was the third or fourth higher priced issue of Deadpool since the relaunch. The fans feel taken advantage of and few of them will continue that for too long.

5) How is your store doing in general now in relation to last year?

It’s been a down year. We’re not panicking but we’re certainly ordering much tighter than in the past. We’ve been in business for thirty-five years, so we’ve seen a lot of ups and downs and are better prepared than many places. One of the main differences I’ve seen is that our daily customer count is way down, specifically on Wednesday, new book day. It’s still the biggest sales day of the week, but we have significantly less people coming in. That doesn’t necessarily translate directly to sales. The buying patterns have changed. People who read exclusively in trades don’t always come in the day a book comes out. Instead of coming in six times to buy six comics they come in one time and buy one tp. That’s the same retail (give or take), but we see them less, so business and foot traffic seems lower. The other part of this though is what are they not seeing or being exposed to on those five trips to the store they no longer make? Is their absence hurting other sales? Probably. Foot traffic is a huge part of any brick and mortar, so what do we do to get people into the store more often?

6) What segments of the market are experiencing the most growth?

Graphic novels in general. For us specifically, non-Big Two graphic novels. We would much rather put our money into Compass South or Amulet and build a new readership than invest in a $9.99 issue of Deadpool.

7) What segments of the market are experiencing the biggest drop in sales?

The Big Two. Okay, to be a little more fair, all weekly comics. We are certainly ordering less of books from smaller companies simply because we are ordering less of everything, so some of them have dropped off our racks completely. The smaller percentage of our sales you make up the less likely it is you’ll wind up on our racks. The decline of the Big Two trickles down to everyone.

I know this isn’t true for some stores, but back issues have been mostly a dead market for us for years. We don’t buy large collections and sell them, due to lack of space and a general lack of interest from our base. We sell about 90% of our periodicals in the first month, then they go to back issue stock, where we may sell a few more to people who happened to miss an issue. After about six months they are dead stock. They essentially go into back issues as merchandise that failed when they first came out. We order pretty tightly so that we don’t have much of a back issue stock to deal with. Other stores have a business model where they buy back issues at really low prices and sell them at what the customer sees as discount prices, but there is still a profit margin for the store. If you can make that business model work then it’s sound business strategy. It hasn’t worked for us.

8) There’s been considerable chatter about an industry-wide sales downturn. What are your thoughts on that? What market trends and forces are to blame?

That’s really the question this year, isn’t it? There have always been ups and downs in this business. This one seems to have something deeper at the core and I think all of us are trying to figure it out. I don’t have an answer, but I do have some thoughts (big surprise there).

We’ve talked at the store that in some ways it feels like the entire comics retail industry is in the middle of a paradigm change. The last real one of these was the advent of the Direct Market in the late 1970s. That mostly took comics out of newsstands and drug stores where they had always been available to the general public and put them almost exclusively in comic book specialty stores. This probably saved the industry at the time and led to the creation of the comic shop and allowed creators and small publishers to thrive under very different economic circumstances than had been previously available. The downside is that for the next twenty-plus years comics were kind of out-of-sight, out-of-mind for the rest of the world. If you weren’t already a fan who was going to the comics shop chances are you had no idea they were even being published. This created a small but fervent fan-based clientele that served us well for a long time. But, those fans gradually aged out, lost interest, or died, all in a business model that was very poor at reaching out to new readers and fans. The comics community became a fans-only club, and for those who were interested, the comic book store was the only game in town.

Obviously, that has changed. There is more interest in comics and superheroes and comic book based product than there has been in a long, long time. And other businesses are filling the need. Periodicals still aren’t really sold anywhere except comics shops, so potential new readers, those people who have never been to a comics shop or even know they exist, are going to Amazon, or Barnes and Noble. Not that these sources are new, but the new customer is not drawn to a specialty shop that they don’t even know exists. Add to that the unwelcoming fanboy exclusivity that a lot of shops still exude and the whole specialty store industry is struggling. Graphic novels are pretty readily available everywhere. There’s more competition than ever for the customer dollar. We stock more depth of product than any Barnes and Noble but if you never set foot in our store you’ll never know it exists. We also simply cannot compete with Amazon pricing. I’ve seen many books there, mainly higher ticket items, that they sell for less than our cost through Diamond. We can’t pay the rent that way. We’re all at the mercy of Diamond as the only distributor and I’m not sure they are addressing many of these changes in a way that benefits either them or us.

The truth is, the Direct Market model that has served us for thirty-five years is quite possibly a thing of the past. We are not the exclusive purveyors of comics and graphic novels anymore. We’re not just in competition with other local comic book stores anymore. We’re in competition with Amazon, and any shop that does online business, and digital downloads, and any book store that stocks graphic novels, and discount chains that buy remaindered trade paperbacks and sells them for pennies on the dollar, and the random specialty card store that carries Walking Dead and Saga (like the one just one neighborhood over that serves a clientele that has no idea we even exist). Any of us who expects the market to work the way it did twenty years ago is doomed.

So the question becomes, ‟What do we do to move into this new era of comics retail and be successful?” I don’t have a specific answer for that, but it involves looking to the future and understanding what is happening to our industry rather than looking to what has always been successful in the past. Diversity of product is part of this. The old fanboys we relied on are no longer the core majority of our business. As they lose interest and move on, who are we replacing them with? This is obviously a question Marvel and DC are struggling with in terms of content as well, and it is affecting the entire business. What can we do to make our store more welcoming to all kinds of people? Are we accessible to new readers? Is the product accessible to new readers? What do we have to offer that someone can’t get on Amazon or a large book chain? Part of that is knowledge of product and a staff that is willing to get to know customers and their tastes in a non-judgmental way. How do we connect with potential readers and customers who simply aren’t aware we exist? Once someone does come into our store, what can we do to make sure they return?

These are all a little more existential than practical, I’m afraid.

9) What are your biggest concerns about the industry? Are you concerned for your own store?

All of the above. As far as our store goes, it’s been a rough year, and we’re asking these questions. Obviously there are no guarantees but I feel we are well-positioned and adaptable enough to weather the changes. But changes will have to be made.

10) What are the biggest challenges facing the industry as we head into 2017 from 2018?

I think I’ve pretty much covered this. :-)

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