What Did Lionel Do Wrong? In 1966?
Joe Algozzini and Roger Carp's article in the latest Classic Toy Trains, on Lionel's train sets for 1966 (below) is, frankly, depressing. Going into 1966, Lionel had made money the year before, after having lost money the previous four years. The company went all out on what it thought was the formula for success, a big color catalog, and lots of different, really cool train sets, including many with two boxcars each, a new feature.
But as Joe and Roger tell the story, Lionel lost $1.6 million that year (a lot back then) and its owners shut it down shortly thereafter.
I wonder what people here on the forum think was the reason Lionel did so poorly? The article talks about how Lionel had cut what back on the number of "uncataloged sets" it made in 1966. (It had routinely made more than 100 different special sets as promotions for retailers and businesses in previous years). Apparently the company decided the cost of making all those custom sets was not worth the profit, if any, that they made it (I tend to agree).
But what went wrong? My own thoughts, offered for what they may be worth, are that they still have way to many sets, including too many glamorous, "top end" sets. Maybe they had cut back on uncataloged sets, but they still have many, many cataloged sets - maybe too many? So many I think they competed against one another.
And in addition, I think maybe Lionel suffered from having too many "top end" locos rather than one over-arching halo product. In recent years when Lionel has managed to dominate the market's attention, it has done so by having one - and just one - awesome product that steals attention from everyone else, and all its other locos, too. The Vision Hudson, the Vision Big Boy, seemed to literally take all the oxygen out of the room for everyone else. In '66, I don't think Lionel created that type of excitement: every product tried to be the greatest!
Anyway, interesting article, even if the end of the story is depressing.
Joe Algozzini and Roger Carp's article in the latest Classic Toy Trains, on Lionel's train sets for 1966 (below) is, frankly, depressing. Going into 1966, Lionel had made money the year before, after having lost money the previous four years. The company went all out on what it thought was the formula for success, a big color catalog, and lots of different, really cool train sets, including many with two boxcars each, a new feature.
But as Joe and Roger tell the story, Lionel lost $1.6 million that year (a lot back then) and its owners shut it down shortly thereafter.
I wonder what people here on the forum think was the reason Lionel did so poorly? The article talks about how Lionel had cut what back on the number of "uncataloged sets" it made in 1966. (It had routinely made more than 100 different special sets as promotions for retailers and businesses in previous years). Apparently the company decided the cost of making all those custom sets was not worth the profit, if any, that they made it (I tend to agree).
But what went wrong? My own thoughts, offered for what they may be worth, are that they still have way to many sets, including too many glamorous, "top end" sets. Maybe they had cut back on uncataloged sets, but they still have many, many cataloged sets - maybe too many? So many I think they competed against one another.
And in addition, I think maybe Lionel suffered from having too many "top end" locos rather than one over-arching halo product. In recent years when Lionel has managed to dominate the market's attention, it has done so by having one - and just one - awesome product that steals attention from everyone else, and all its other locos, too. The Vision Hudson, the Vision Big Boy, seemed to literally take all the oxygen out of the room for everyone else. In '66, I don't think Lionel created that type of excitement: every product tried to be the greatest!
Anyway, interesting article, even if the end of the story is depressing.
