Hornby announce TT:120

[montyburns56]

23 hours ago, MarkSG said:

That page lists 45 products. Leave the "bargains" section of the website and use the product filters to drill down to new in-stock or pre-order TT:120, and there are 353 products. So only around 13% of their TT:120 products are being discounted more than normal (bearing in mind that you're getting the usual 10% to 15% off RRP on most of them anyway, so a headline 40% reduction is a little misleading). 

 

That doesn't give the impression of a fire sale. It looks more like the usual deep discount of end-of-line products that have already made a profit on normal price sales and now need to be shifted to make space for new releases.

 

I could understand if it was just items in oddball liveries such the GBRF/DB shunters or HST coaches that were in a short lived modern TOC livery, but it's the fact that it's staples such as the Flying Scotsman, A4s, MK1s, blue/grey MK3s etc. It just seems a bit odd, especially when the HST sets are due pretty soon and you'd think that customers would be wanting to buy more coaches to add to the trains so no discounting would be necessary.

[MarkSG]

5 minutes ago, montyburns56 said:

 

I could understand if it was just items in oddball liveries such the GBRF/DB shunters or HST coaches that were in a short lived modern TOC livery, but it's the fact that it's staples such as the Flying Scotsman, A4s, MK1s, blue/grey MK3s etc. It just seems a bit odd, especially when the HST sets are due pretty soon and you'd think that customers would be wanting to buy more coaches to add to the trains so no discounting would be necessary.

 

They're discounting the staples because the current promotion is aimed at generating a second wave of new entrants to TT:120. for that, you need to be promoting the things that people will buy as starters - the train sets and most popular add-ons.

 

Bear in mmind that Hornby's TT:120 range is, still, aimed primarily at the train set market rather than the hobbyist market. Our perceptions don't really come into it at this stage.

[meatloaf]

From the sounds of it, this small starter set thats coming is going to be similar to Railroad level with reduced detailling and a loco that can be built cheaply. Goods set with less track. Reminds me of Smokey Joe all those years ago.

[Austin Allegro]

Been hoping The Easterner sound fitted would be part of the sale but unfortunately not. I managed to get pack from FB market place that was the flying Scotsman, 4x Pullman coaches and the track packs but really liked the A4.

 

managed to sell the track packs and controller etc for about 2/3 of what I paid for the whole lot so the market then was strong enough.

 

Was just waiting for The Easterner to come below £200 so I get another loco and coaches with a 160 cm x 80 already planned on AnyRail.

 

Not a huge problem as I’m still building my 00 but would have been nice anyway so I can wait it out.

 

edit: just seen that TMC have non- sound The Easterner on pre-order for £100 and the HM7000 Next 18 for £40, so that solves that problem! 🙂

Edited October 4 by Austin Allegro

[Hobby]

23 minutes ago, MarkSG said:

 

They're discounting the staples because the current promotion is aimed at generating a second wave of new entrants to TT:120. for that, you need to be promoting the things that people will buy as starters - the train sets and most popular add-ons.

 

And they'll get drawn in just as Hornby launch some new items.

[rob D2]

39 minutes ago, MarkSG said:

 

They're discounting the staples because the current promotion is aimed at generating a second wave of new entrants to TT:120. for that, you need to be promoting the things that people will buy as starters - the train sets and most popular add-ons.

 

Bear in mmind that Hornby's TT:120 range is, still, aimed primarily at the train set market rather than the hobbyist market. Our perceptions don't really come into it at this stage.

Second wave ! I’m here !

I’ve just added the HST power cars and another coach , almost got a whole class 50 rake and HST now 

[Chris M]

39 minutes ago, MarkSG said:

 

They're discounting the staples because the current promotion is aimed at generating a second wave of new entrants to TT:120. for that, you need to be promoting the things that people will buy as starters - the train sets and most popular add-ons.

 

Bear in mind that Hornby's TT:120 range is, still, aimed primarily at the train set market rather than the hobbyist market. Our perceptions don't really come into it at this stage.

I would guess there is quite a bit of "sales speak" on this one. The only reason for a business selling anything for less than the planned price is because it has stock that isn't moving as fast as it needs it to. We do know that Hornby needs to reduce its stock so discounting the various items that are not shifting is sensible business. It hits the bottom line profit but it provides much needed cash together with making a bit of storage space for incoming stock. No big deal really, just business.

[MarkSG]

15 minutes ago, Chris M said:

I would guess there is quite a bit of "sales speak" on this one. The only reason for a business selling anything for less than the planned price is because it has stock that isn't moving as fast as it needs it to. 

 

Yes, but the vast majority of discounting is planned as part of a marketing strategy. Deliberate variable pricing, with different parts of the range being discounted at different times, is an absolutely bog-standard part of a marketing department's toolkit. The idea that there is just one true price of a product, and any deviation from it being forced by circumstances, is completely false.

 

Obviously, reactive discounting, to help clear warehouse space or shift a poorly selling line, is also a tool, and a very useful one. But it's a serious misconception to assume that all price changes are reactive. Just because a price is being discounted doesn't mean it isn't planned.

 

I suppose I ought to explain that a bit. Essentially, for any given product, your customers will sit on a spectrum from "really, really want it" to "have no interest in it at all". In the model railway world, the former pole is represented by those who will place their pre-order on the day of the product announcement, and the latter are those who pop up on announcement threads to say "nah, nothing here for me". And in the middle, you've got people who aren't so committed to buying it that they'll order as soon as it's announced, but might still consider it if tempted. For the sake of simplification we can label these as group 1 (definitely buy), group 2 (might buy) and group 3 (won't buy). And nearly all of us fall somewhere on that spectrum according to what our interests are.

 

Manufacturers obviously want to maximise their profit (which isn't the same thing as maximising sales; that's another common misconception). The group 1 customer are easy: just offer them a product they want at a price which doesn't cause too big a sharp intake of breath, and they'll buy it. And you can ignore group 3, they're not relevant here. But what about group 2? Ideally, you want them to buy as well. But you don't want to undermine the revenue you can extract from group 1.

 

So, you start off by selling your product at top price (with maybe just a little cushion on the headline price for the retailers to be able to offer a discount on RRP, even though we all know that the RRP is deliberately inflated in order to make that possible, not that that ever stops us buying something when we are in group 1). And then, when sales to group 1 have started to dry up, you put your product into a promotion and target group 2, who might now be tempted to buy it at a lower price.

 

The point here is that the later discounting is deliberate, and planned. If you start off with the lower price that will attract group 2 customers, then you'll miss out on the higher prices that the group 1 buyers will happily pay. But if you never discount, then you'll never reach group 2 at all. Both of those will harm your revenue.

 

This is particularly the case with products where production costs are heavily front loaded - of which model railways are a prime example. The biggest single costs are development and tooling, which are one-off, up-front costs. The actual manufacturing and materials costs, by contrast, are spread out over the manufacturing run - or, if repeated, runs.

 

Ideally, you want to cover your R&D costs from your group 1 customers.  So that's your base price. Sell enough at that level, and you're in the black at least. The group 2 customers are then the bonus, the icing on the cake. You can sell to them at a lower price because you've already recouped your costs at a higher price. Again, bear in mind here that the concept of "profit" and "loss" isn't reckoned on an item level, it's reckoned at the batch level. Once you're into profit on the overall production run, you can cut prices as much as you want - you can practically give them away if you really want to - and every single sale is still profitable.

 

Now, not every manufacturer does this. There are some model railway suppliers which really only go for the group 1 customers, and carefully manage production runs (by having, for example, an order book which needs to be filled before they press the start button on the production line) in order to ensure that every production run is sufficiently  profitable on group 1 alone. But Hornby doesn't do that. There are a lot of reasons why Hornby doesn't do that, but the main one is simply that Hornby is a very different beast - it's much larger, for a start, and operates in a very different type of market. Hornby's marketing strategy is, very clearly, based around demand curves  and variable pricing. That's normal in the general toy and games market, which is where most of Hornby's customer base lives. It's not normal in more specialised, niche markets, which is where most of us on RMweb live, at least as far as model railways go. But Hornby doesn't particularly have a different marketing strategy for us compared to everyone else. So what we see from Hornby is a pricing strategy which is somewhat atypical for model railways. Which can confuse people who are more familiar with a flatter pricing model. 

[adb968008]

On 03/10/2024 at 19:24, ruggedpeak said:

And that 15% loan that IIRC costs Hornby £1m or more per annum is a key part of Phoenix's overall returns, they won't kill a golden goose that provides such a tasty return. It doesn't matter if Hornby make a loss if they can keep giving Phoenix investors a 15% return year on year.

I’m glad someone else has noticed this.

 

Fat comfort for the other shareholders though.

[Chris M]

I would agree that once you have covered your fixed costs you can sell at just above piece cost and still make a profit but I still say Hornby only offer such large discounts because they need to shift stock to get cashflow. Hornby themselves have stated their stock levels are too high and need to be reduced. This is because they have not sold the volumes they expected to. Cash is the crucial thing in any business and selling stock at below optimum price is the standard way of bringing cash in. The rest of it is just flower arranger fluff. The flower arrangers are often referred to as the marketing department.

[Robin Brasher]

Most of the items in the Rails Hornby TT-120 sale are on order so it does not look like Rails is getting rid of surplus stock.

[ruggedpeak]

Let's take the positives, cheap stock for those who want it and hopefully it will drive more interest in the scale, one that we know has already surpassed initial expectations.

 

I've been hoping the modern livery 08's might be discounted at some point before I dipped my toes into TT:120. Game on 😁

[MarkSG]

5 hours ago, Chris M said:

I would agree that once you have covered your fixed costs you can sell at just above piece cost and still make a profit but I still say Hornby only offer such large discounts because they need to shift stock to get cashflow. Hornby themselves have stated their stock levels are too high and need to be reduced. This is because they have not sold the volumes they expected to. Cash is the crucial thing in any business and selling stock at below optimum price is the standard way of bringing cash in. The rest of it is just flower arranger fluff. The flower arrangers are often referred to as the marketing department.

 

Businesses that go bust are typically the ones that think marketing is just flower arranging fluff.

[MarkSG]

49 minutes ago, Robin Brasher said:

Most of the items in the Rails Hornby TT-120 sale are on order so it does not look like Rails is getting rid of surplus stock.

 

No; the discounting is being driven by Hornby, not the retailers. The usual scenario in this type of situation is that the manufacturer approaches trade account holders and says "We've got a special deal on wholesale prices for some of our range, which will allow you in turn to sell at well below normal retail prices and still maintain your usual margins". But the retailers will only take that offer up if they think they can actually shift them. If they've already got unwanted stock taking up space then they're not going to want to add to it even if it's cheaper than normal. 

 

So the fact that Rails are participating in the promotion does indicate that Rails, at least, are comfortable with taking on the extra stock, and confident they can sell it. Which suggests that they don't think there's a general problem with demand.

[rob D2]

There was an interview with the peachy TT guy and the Hornby fella.

he said it was exactly a way of encouraging new entrants who may be differing over £200 worth of toe dipping to have a bash a bit cheaper .

He also slipped in that a £100 style trainset is coming 

[ruggedpeak]

3 minutes ago, rob D2 said:

There was an interview with the peachy TT guy and the Hornby fella.

he said it was exactly a way of encouraging new entrants who may be differing over £200 worth of toe dipping to have a bash a bit cheaper .

He also slipped in that a £100 style trainset is coming 

I think Hornby should try a TT micro layout shunting/inglenook trainset as an option as it has more/different play interest compared to a loop. Also works well with the digital control option for younger people, and the smaller scale is ideal for this.

 

Fun wagons would also help attract kids. I'm building a HO/OO inglenook for my daughter with Marklin kids wagons such as the Haribo and Halloween ghost ones. But at HO/OO scale the baseboard is just a bit too big to store easily to put it out of the way (which i think you need for younger kids who play with different toys according to mood!) even with a super tight headshunt curve to condense it. TT would be at a size that is much more storage friendly.

[meatloaf]

Remember on a model world program we saw a starter set being developed with a B4 loco and some wagons. Was that deffo for 00 gauge?

[Hobby]

20 hours ago, ruggedpeak said:

I think Hornby should try a TT micro layout shunting/inglenook trainset as an option as it has more/different play interest compared to a loop.

 

Most kids I see prefer to run something round and round to start with. I suspect compared to a starter set with oval of track it wouldn't be as popular, as well as more expensive given it'd have points. That sort of set I'd suggest is the next level after they've been hooked into the hobby.

Edited October 6 by Hobby

[moawkwrd]

46 minutes ago, Hobby said:

 

Most kids I see prefer to run something round and round to start with. I suspect compared to a starter set with oval of track it wouldn't be as popular, as well as more expensive given it'd have points. That sort of set I'd suggest is the next level after they've been hooked into the hobby.

Agree - that sort of thing would be better offered through an expansion/track pack that includes the points, maybe a goods shed, a few extra wagons and a suggestion of track plans.

Edited October 6 by moawkwrd

[The Stationmaster]

On 04/10/2024 at 09:22, Roy L S said:

The simple truth is that we don't know precisely what is behind these huge discounts, it could be an over estimation of demand and too much stock, and a need to shift it for cashflow reasons, it could be a "flash sale" to entice new people in to have a go with Tt120 ( as the very cheap Easterner sets did at initial launch) but what I do reflect is that nobody gives up margin if they don't need to and if demand were suitably strong surely they wouldn't have to, and especially not to the extent we are seeing?

 

 

 

What behind it is what Ollie Raeburn has variously announced as 'policy' and what was included in the Annual Report proper (i.e not in the earlier published annual Financial Report) -

 

1. Clearing the unsold stock mountain where possible and without hurting the brand (or retailers - they are getting special offers too)

2. Controlling any increase in the size of that mountain - effectively end of line/poor selling items discounted to clear stock and bring in money.

3. Recognising (not so much in some of these offers but possibly in a few instances)  that there is price resistance although that really applies to the wider market in the pre-Christmas period

And - most important of all -

4. Getting in revenue and boosting turnover.

 

In simple terms if stuff hasn't sold why not reduce the price to both retailers and end customers in order to get shot of it rather than paying out money to the warehouse operator and also making a double dent in the bottom line.

 

And why shouldn't Hornby do the same as Bachmann - who have also nbeen offering reduced prices to retailers on various slow moving stock - as they have done for years.

[009 micro modeller]

On 05/10/2024 at 12:22, ruggedpeak said:

I think Hornby should try a TT micro layout shunting/inglenook trainset as an option as it has more/different play interest compared to a loop. Also works well with the digital control option for younger people, and the smaller scale is ideal for this.

 

Fun wagons would also help attract kids. I'm building a HO/OO inglenook for my daughter with Marklin kids wagons such as the Haribo and Halloween ghost ones. But at HO/OO scale the baseboard is just a bit too big to store easily to put it out of the way (which i think you need for younger kids who play with different toys according to mood!) even with a super tight headshunt curve to condense it. TT would be at a size that is much more storage friendly.

 

5 hours ago, Hobby said:

 

Most kids I see prefer to run something round and round to start with. I suspect compared to a starter set with oval of track it wouldn't be as popular, as well as more expensive given it'd have points. That sort of set I'd suggest is the next level after they've been hooked into the hobby.

Which of these is correct depends on the age range it’s being aimed at. One solution would be to do it so that the ‘Inglenook extension track pack’ (if there was one) fitted inside the train set oval, accessed by a point off it (perhaps not the most realistic appearance but saving space compared to having the sidings outside the oval). But surely one advantage of an Inglenook over an oval (especially in TT or 00) is that it generally takes up less space than a full oval?

[Hobby]

1 hour ago, 009 micro modeller said:

Which of these is correct depends on the age range it’s being aimed at.

 

Bear in mind that Hornby are trying to attract newcomers to the hobby with TT120, at least at the moment, and shunting puzzles aren't really part of that market. As Moawkwrd said, it's something for later once you've got them in. TBH I'm a enthusiast of 60+ years and don't like them either, I've only ever built one end to end and I even converted that to a circuit!

Edited October 6 by Hobby

[moawkwrd]

2 hours ago, The Stationmaster said:

What behind it is what Ollie Raeburn has variously announced as 'policy' and what was included in the Annual Report proper (i.e not in the earlier published annual Financial Report) -

 

1. Clearing the unsold stock mountain where possible and without hurting the brand (or retailers - they are getting special offers too)

2. Controlling any increase in the size of that mountain - effectively end of line/poor selling items discounted to clear stock and bring in money.

3. Recognising (not so much in some of these offers but possibly in a few instances)  that there is price resistance although that really applies to the wider market in the pre-Christmas period

And - most important of all -

4. Getting in revenue and boosting turnover.

 

In simple terms if stuff hasn't sold why not reduce the price to both retailers and end customers in order to get shot of it rather than paying out money to the warehouse operator and also making a double dent in the bottom line.

 

And why shouldn't Hornby do the same as Bachmann - who have also nbeen offering reduced prices to retailers on various slow moving stock - as they have done for years.

All of this would make sense if it was only the original/early releases they were discounting by almost half, but some of it is items barely 6 months old - if that’s slow moving stock then it’s surely a worrying sign? 
 

Anyone who bought a full HST set on release must be pretty annoyed at Hornby now offering it at almost half price as if it’s discontinued.

 

And I get that special deals to mark the 2 year birthday may explain that but surely they’d be less generous/structured differently generally? 

Edited October 6 by moawkwrd

[rob D2]

Yes , I understand the inglenook case but I’ve seen a lot of kids walk past shunting layouts .

 

is this the target market though ? I’d imagine it’s more about disposable income folk of an older generation 

[rob D2]

2 minutes ago, moawkwrd said:

All of this would make sense if it was only the original/early releases they were discounting by almost half, but some of it is items barely 6 months old - if that’s slow moving stock then it’s surely a worrying sign? 
 

Anyone who bought a full HST set on release must be pretty annoyed at Hornby now offering it at almost half price as if it’s discontinued.

 

And I get that special deals to mark the 2 year birthday may explain that but surely they’d be less generous/structured differently generally? 

You pay what you think it’s worth . I paid about £34 a coach recently - they are now £24 . I didn’t blanche at 34 so I can’t moan at 24, that’s the way it goes