German and Austrian trains
I recently visited the Roco website, and was rather surprised by what I saw. The Austrian & German model trains industry may be a niche, but it’s still a business. So, although this falls slightly out of the scope of this blog, here are a few thoughts about the model train business from across the Rhine river.
I wanted to see what Roco had to say about their new Z21 DCC command station. I was rather surprised by the marketing approach the brand is apparently taking. I don’t want to post any screenshot to avoid running into copyright issues, but here is how Roco.cc looks right now:
Let’s be clear, I don’t find this “shocking” in any way, I just find this strategy utterly ridiculous. No one is denying that model trains are a mostly male hobby. Has always be the case, will probably always be. However, I’m not sure advertising model trains as a macho, testosterone-filled hobby really makes sense. I mean seriously, football, free range shooting: these are things that you could directly link with “male power”; but model trains? How is that gonna help?
I have been to model trains fairs in Germany quite often. Most of them had a play area for children, where they can drive garden-scale models. I am fairly sure I saw as many girls as boys. Märklin is the only brand who has recently done some effort to get children to buy trains again. Their “My World” products seem to work pretty well. And, without surprise, if you go to their kid’s club website (http://www.maerklinfanclub.de), a girl is pictured.
I am not one those persons who want to transform all toys into neutral “unisex” toys, or who think Barbie dolls should be banned. But, I am sorry, I am disappointed by Roco’s strategy. It doesn’t make sense to exclude 50% of the potential customer base, while not being sure to actually appeal to the other 50%. Model train is about precision, electronics, patience…it will never be a Monster Truck-like hobby.
Many model trains brands in Europe are German, or Austrian. I have been living in Germany for a little while now, and I love it here. But no country is perfect, and as a business person (in another sector), I can’t help to notice the German culture has a pretty strong influence on the way the brands are behaving on the market.
This Roco strategy above, seems symptomatic of the old fashioned structure of the German and Austrian societies. No matter how rich and successful those countries are, there are still some idiosyncrasies with the XXI century. The place of women is still very much linked to a traditional role, especially in Germany. Women here have very few kids, because they can’t combine kids and a career. Pretty ironic isn’t it, that the country who brought the word “kindergarden” to English doesn’t build enough of them! The Germans even have a term for women who don’t stay at home : “Rabenmutter” (Raven mother). The situation should not be exaggerated, and it is evolving. But it is quite interesting to notice that some mentalities here are similar to those in some latin countries. This clearly gives Roco the impression, that they can do sexist advertising and benefit from it.
Another typically “Germanic” business practice is the requirement to actually pay for catalogs. This really doesn’t make sense to me: if you show some interest in my products, boy I should be glad to give you as much info material as I can. In most hobby shops, you need to actually buy the catalogs from the big brands. I could understand that they want to reduce their printing costs (after all, you also need to buy the Ikea catalog…). But until recently, if you wanted info on new models, you had no free option. The websites did not actually list all models, and you could not download a PDF catalog for free (see for example the www.trix.de website).
In the last 2 or 3 years though, things changed. With the need to open online shops, most brands (Fleischmann, Trix…) opened shops that allow us to at least search for a specific model. Also, most brands publish free PDFs of their “new items” releases. This doesn’t replace the fun of going through a full catalog, and surely is less inspiring. But at least, we don’t need to go to a brick and mortar store to know which models are being released.
99% of my online purchases in the last year have gone through Modellbahnshop Lippe. Their website may not be the most modern looking, but they are one of the few shops who understand how modern internet commerce works. They deliver for free in their own region (Germany, and now even Austria), they are fast, and they don’t care which payment method you use. Just to be clear: I have no shares in their company, they are just a good example among others. Many other German websites, with exclusive or niche products, still don’t get it. They advertise that they ship abroad (at least in the EU), but don’t understand that their business model isn’t optimized. The most obvious mistake: many of those websites only accept wire transfers as payment method, or charge you extra if you want to pay with a credit or debit card. Well, actually, because of the law and agreements with card companies, they can’t “charge” a credit card purchase, but the “shipping” costs will be higher…
I’d like to say a few more words on that, as this is a topic that actually is disturbing for anybody living in or visiting Germany. Germans like cash, more than any other developed country. “Plastic” money is still seen as a foreign habit, and they even have a term for this weird behavior: “Bargeldlos zahlen” (to pay without cash). A second thing, even more important, is that Germany has an outdated national payment system. A similar system exists in Austria, and in a limited number of other countries (Belgium, the Netherlands…). Bear with me: Germany has a national “debit card” system (called “EC”, for Electronic Cash). Those cards come for free with any bank account, and most stores only accept these. This means that international cards (Visa, Mastercards) are only optional, and always called “credit cards”. Until a few years ago, few people actually had a Visa or MC in their wallet. The consequence of this system is obvious: Germans ignore that most cards in the world – even, and above all, debit cards – are also Visa or Mastercards. They are persuaded that everybody has an “EC” card. So if you show them your US, French or British Visa bank card, they’ll think it’s a credit card. They won’t believe you if you say it’s the only card linked to your bank account. They also think some EU debit cards (Maestro from MC, V-Pay from Visa) are widespread in the EU, but they ignore that those cards are often restricted to young kids or people with bad debt history.
German online train stores (and brick and mortar stores) are no exception: they think everybody has an “EC” card. These cards transactions only cost from €0 to €0.5 for the shop keeper, so they are reluctant to accrue the 2-4% Visa or MC transaction fees in their business model. They don’t like it, it’s not in their culture: why don’t you pay cash like everybody else anyway?
As an international customer, you expect to order online and pay with your card (as you’ve been doing for the last 20 years everywhere else), and you expect the transaction to be immediate. Doing a wire transfer just isn’t natural to most Europeans to pay for a purchase. If you, as a seller, need to pay a fee to a card company, I’m sorry but that’s how it works. Also remember that for this fee, both the customer and the seller have guaranties, that are absent with wire transfers.
Slowly, things are changing. As more and more small model business owners open to the rest of the world, they realize they need to adapt their business model. Model train brands are releasing modern products, displaying modern websites, and try to be more in touch with their customer base.
It is going to take some time, but it will work. Small businesses in Germany are known worldwide for their export capacities, there is no reason the model train world can’t correct their small errors in due time !
This reminds me of another opinion topic: the looks of our model train devices. If you’re interested, I suggest reading this fun post on Quinntopia.
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