Horizon holds its first Academy
Select retailers head to Champaign, Ill., for an educational event that's part of a revamped Horizon Certified Partner program
June 28, 2013
Horizon Hobby would like every single hobby store to join its Horizon Certified Partner program. But the hobby manufacturer is careful when working out kinks.
Horizon's Matt Andren, right, teaches Jason Beckgerd how to use SAFE.
Horizon Academy attendees follow a radio-controlled airplane through the sky at Eli Field.
That’s why Horizon was responsive when retailers pushed back on parts of the first iteration of its HCP program, introduced in the fall. That’s why the program looks vastly different today.
And that’s why, for the inaugural Horizon Academy, held in Monticello, Ill., near Horizon’s headquarters in Champaign, Ill., the company invited an exclusive group of Horizon Certified Partners — 37 representatives from 25 hobby stores — as a benefit of the program that it doesn’t want to be exclusive.
“We’re trying very hard not to rush just to get something out,” said Horizon Retail Programs Manager Cristi Brown, referring to the introduction of new elements to the HCP program, such as Horizon Academy. “ We like to run pilots and try things first, learn from that before we go more broad stream.”
The event was held June 11-13 and was split between Horizon’s headquarters and a nearby flying field. It was the first of two such Horizon Academy events scheduled; the second was to be held July 23-25. Horizon has left the door open for future Horizon Academy events in Champaign, as well as additional educational events throughout the country, depending on how retailers respond to the first two events.
Invited retailers who elected to pay their way to Horizon Academy were housed on Horizon’s dime at a local hotel near the airfield. In addition to meals, the attendees were given a Horizon Academy drawstring bag and baseball cap, as well as a workbook complete with specs on all of Horizon’s products and information on how to sell those products to consumers.
In fact, teaching retailers how to best sell Horizon’s products to consumers was something of an event theme. Much of the first full day of the event was devoted to hands-on demonstrations of dozens of surface vehicles and aircraft, several of which were not yet announced to the public. During the demonstrations, Horizon employees provided additional information about the products. Attendees also broke into smaller groups and sat down with Horizon employees to learn more about how to market each of Horizon’s proprietary brands to customers.
“I found it very worth our time and effort,” said Darren Vancour, general manager of Mark Twain Hobby Center in St. Charles, Mo.
The first full day of the event also included a detailed explanation of Horizon’s new Sensor Assisted Flight Envelop, or SAFE, technology (see sidebar below). Horizon then took the attendees out to the flying field again to test-fly the new E-flite Apprentice S 15e RTF, which features the SAFE technology.
The next day, attendees were taken through Horizon’s service center and taught best practices for repairs and service. Horizon also explained its product support system and its upcoming marketing plans. Finally, the attendees were given a tour of Horizon’s distribution center.
Model Retailer spoke with several hobby store owners and employees at the Horizon Academy event, all of whom praised Horizon Academy and the HCP program. Horizon said the next Academy is already fully booked.
Horizon Academy was just one part of the company’s revamped HCP program.
Since it was launched in the fall, Horizon has heard plenty of retailer feedback regarding the program. Although Brown said the company’s intentions were good on paper, in practice, some aspects of the original HCP program produced unintended consequences.
This led Horizon to make several changes. "The benefits of HCP are all designed to help retailers market, sell and support our products in their stores," said Horizon CEO Joe Ambrose. "We know that running a hobby shop, like any small business, is a constant challenge. The goal of our Certified Partner program remains the same as when we launched it last fall — and that is to help retailers be successful and feel confident when they buy, sell and support Horizon products.”
Initially, Horizon Certified Partners in the top level of the program were required to supply Horizon with point-of-sale data on Horizon products sold at their stores. This proved complicated for several reasons. Horizon found that many stores don’t have POS systems, Brown said. Other stores couldn’t easily or correctly format and submit the data to Horizon. And some stores simply refused to provide that information to Horizon.
Over time, Horizon realized it was unable to properly draw conclusions based on limited and often erroneous sales data, and decided to scrap the POS requirement.
And without that barrier to entry, Brown said, Horizon no longer saw the need to have two HCP membership tiers.
Initially, HCP also required that 75 percent of a hobby retailer’s sales come from a brick-and-mortar store — versus the Internet — in order to qualify for the top level of participation. To qualify for the lower level, stores had to have just 50 percent of their sales come from a brick-and-mortar location. Mark Twain Hobby Center, for instance, didn’t qualify for the top level of membership because too large of a portion of its sales were done online.
Horizon’s original goal, Brown said, was to throw its weight behind stores with a physical storefront. But what the company realized was that some smaller, single-category stores couldn’t meet the sales thresholds set by Horizon and were thus negatively affected. “That was never the intent of the program,” she said.
So when Horizon consolidated membership to just one level, it reduced the in-store sales threshold to 50 percent and lowered the annual Horizon product purchase amount to $60,000 per year (down from $100,000 at the top level and $75,000 at the lower level).
“The overall goal of HCP was to allow any retailer who really wants to participate to participate,” Brown said. “It’s not to be exclusive in terms of keeping retailers out for an arbitrary cause.”
The changes didn’t stop with the participation requirements. Horizon also changed one of the HCP benefits to members.
The initial HCP program allowed participating stores to receive shipments of specified Horizon products two weeks earlier than retailers not in the program, including online-only retailers. The goal here, Brown said, was to combat showrooming. If consumers really wanted a product within two weeks of its release, they wouldn’t be able to dart to the Internet and track down a heavily discounted version.
But that, too, had unintended consequences. Non-HCP stores were upset with Horizon because they were behind the curve. Some HCP stores were upset because they weren’t allowed to sell the early shipments online, only in their brick-and-mortar stores. And consumers were upset because it limited their purchase options. A customer may have wanted to buy a new product from his favorite hobby shop, but if that shop wasn’t an HCP store, then he was out of luck. So Horizon removed the early shipping benefit, as well.
Under Horizon’s revamped HCP program, participating retailers are still entitled to several benefits, many of which Brown said have been well-received.
Service Express. Retailers may repair a newer product (Horizon suggests within 30 days of ownership) for a consumer right in the store and Horizon will reimburse the retailer for the parts used.
There are a few more guidelines than that, but, basically, the retailer doesn’t have to be pre-approved for the repair as long as it costs less than $50. Horizon hopes this will reduce instances where a retailer has to call Horizon about repairing a customer’s product while the customer sits and waits. It is also meant to prevent the customer from having to spend the time on the phone directly with Horizon.
This feature is more of a process change than anything, Brown said, since a lot of retailers had said they offered this service anyway; they either just ate the price of the part or called Horizon for approval of the reimbursement every time.
Employee Purchase Program. Retailers are allowed to purchase products with a discount of 25 percent off of the everyday dealer net price, with a maximum discount of $200.
“This had been a request of our dealer counsel for quite a while,” Brown said.
Store owners told Horizon that their employees would buy more of Horizon’s products if they could get them cheaper. Horizon, in turn, receives greater exposure as those store employees drive and fly those products out at the racetrack or flying field. “And it gives them more passionate sales capabilities, because they’re owning it themselves,” Brown said.
Each participating HCP store is limited to 12 discounted products per year.
Co-op Marketing. Horizon used to offer its co-op marketing program to everyone. It’s now limited to just Horizon Certified Partners.
“Unfortunately,” Brown said, “some retailers do see this as an exclusion. ‘Well, I had it before, and if I don’t join I won’t have it again.’ And that is a true statement. ... And, of course, they don’t have a comeback when I say, ‘You know what? We’d like you in the program.’ ”
As part of the HCP program, however, the co-op marketing program does come with a few additional benefits.
Previously, a store accrued a dollar amount based on its purchase of Horizon products. As that retailer built up its co-op marketing fund, it could spend that money on marketing. Most retailers, Brown said, would spend their co-op dollars around the holidays, because, being near the end of the calendar year, that was when they had accrued the most co-op dollars.
The new co-op marketing program, however, is based on a store’s previous year’s purchases. This means a retailer has access to a full year’s worth of co-op dollars right away on Jan. 1 of a new year, allowing them to plan marketing programs and advertisements throughout the year, not just around the holidays.
Additionally, Horizon said it is being much more flexible on what it will allow retailers to spend their co-op marketing dollars.
Brown said the retailers that are now Horizon Certified Partners are, for the most part, the same retailers that actually used their co-op dollars before the program was rolled into the HCP program.
HCP Identification. Finally, Horizon Certified Partners are identified as such to consumers.
Horizon’s Dealer Locator clearly labels stores in its system as Horizon Certified Partners. The company also provides participating stores with plenty of marketing materials, including window clings and Horizon Hobby Fatheads, giant murals that adhere to walls.
What lies ahead
More changes and additional benefits are in the pipeline, Brown said, including a potential demo program that will encourage HCP stores to run test products for consumers. There could also be what she called a “spring cleaning” program, where retailers can return old proprietary Horizon products to the manufacturer for some sort of discount.
If it seems today like the Horizon Certified Partner program looks nothing like what it was in the fall, that’s because it isn’t.
“I guess in a perfect world you go out with something and it would hit a bullseye and you wouldn’t have to change it,” Ambrose said. “But I think we are trying to be so receptive to input here in terms of what’s working and what’s not that I think we’re going to be pretty constantly coming out with new things to try and refine and grow the program for the benefit of the retailers.
"I'm proud of the way we listened to our partners and responded to improve the program," he said.
There have been a lot of changes and plenty of back-and-forth between Horizon and hobby retailers, but what it boils down to is a program Vancour believes has no downside. “I can’t think of any reason," he said, “why [a hobby retailer] wouldn’t want to participate.“