Who decides what big box sells? Our GAME got us answers

0:00Sarah Gonzalez:This message comes from U.S. Bank. Simplify how you do business with Business Essentials, a powerful combination of no monthly maintenance fee checking and card payment processing. Deposit products are offered by U.S. Bank National Association. Member FDIC. This is Planet Money from NPR. I have never heard my Planet Money co-host Erica Barris this nervous before. Hello, Erica. I'm in the car. Okay. Can everyone in your car hear me? No, this is between you and me. Erica had essentially dropped everything to fly to Los Angeles because there was a chance she might get inside the room, inside the system, maybe even participate in the system, where a relatively tiny group of people decide what products we all get to see and choose from when we walk into the country's biggest stores.

0:53All right.

0:53Sarah Gonzalez:So where are you right now? I am in my hotel room. about two miles from the Exploding Kittens office. Exploding Kittens is the company we've been working with to create the Planet Money board game. If you're new to this whole project, well, cue the recap. We are making a game. Me and you all listening at home and Erica Barris too. Erica, come help me with this recap, yes? Yes, gladly. In previous episodes, we've told you the story of how we partnered with the game company Exploding Kittens to try and design a game inspired by the Nobel Prize winning economics paper, The Market for Lemons. That paper is literally about asymmetric information in the market for used cars.

1:37Sarah Gonzalez:But broadly, it's about how making deals when one side knows more than the other side causes chaos, distrust, and ultimately destroys a market. Our game version of that is not about used cars. We decided it should be about monsters. And we chose a name. It's called Sell Me a Sasquatch. Sell Me a Sasquatch. Now, you listeners, you helped us refine this game. And in it, our players have hands of cards with cute little mythical creatures on them. And then the players offer deals to each other trying to get the best creatures, but also maybe trying to trick their friends into accepting terrible creature cards because asymmetric information.

2:14Sarah Gonzalez:You only ever have to show part of the deal. One of the reasons we decided to make this game in the first place is so it could be our Trojan horse to report inside a world that no other Planet Money project has entered. The real shelves at real big box retail stores. And we think making an Exploding Kittens party game gives us the best chance of sneaking into that world. So, yes, that's the deal. And that is why Erica was at Exploding Kittens headquarters in Los Angeles. It's why they had told her essentially to drop everything because two representatives from a humongous big box company were on their way to visit the Kittens office.

2:53Sarah Gonzalez:Those representatives are board game experts traveling the country, sifting through hundreds of new games to decide which handful of new games will get space on their company's shelves. This is the moment if we want to get the Planet Money board game into big box retail. So I am doing this call with you and then I'm heading over there. Okay. And are you going to get in the room for the pitch? Like where did this land? It landed. They emailed me last night And he said that confirmation that you can be in the room for the pit. So I know part of me was like, maybe I don't have to do this. But but yeah, Erica was not just going to be in the room.

3:34Sarah Gonzalez:She was going to have to do the pitch for the Planet Money game. This is a pretty big deal. I'm trying not to think how much of a big deal it is and how much work has gone into. It's really big. Is it helpful if I remind you how big it is? No, it's not. It's sort of the whole thing. It's not. I have a pitch, though. I, like, talked myself through it a few times. I was sitting on the airplane, like, kind of mumbling to myself, being like, and the thing you got to know is how devoted audience. I was just like, yeah, I got this. I got this. I have arm movements that are going to happen. So, okay.

4:07Sarah Gonzalez:You got this, Erica. You got this. All right. Bye. Bye. Hello, and welcome to Planet Money. I'm Kenny Malone. And I'm Erica Barris. And today on the show, we are going inside the secret room that could make or break our Planet Money game. And inside the minds of the people who decide what gets to be in big box stores. We get a once-in-a-lifetime front row seat for the Shark Tank way that essentially all the store shelves get filled at... Oh, right. Also, we will explain why we cannot say which specific big bucks retail company we got unusual access to. Stay tuned.

5:09it's done. With Instacart Shopper Notes, you can add details about what you want right in the app, like extra crispy rotisserie chicken or lettuce you'd pick yourself.

5:18Sarah Gonzalez:Just leave a note so your shopper can get it right without having to ask. Download the Instacart app and shop today. For the first time, U.S. government debt has surpassed$40 trillion, a massive number that affects your bottom line. This week on Consider This, we connect the dots between the national debt and your car payment, your mortgage, your small business loan, and so much more. Listen to Consider This, the Daily Afternoon News podcast from NPR. I was somewhat stunned to learn that in the United States, 81 % of our retail buying is still happening at brick and mortar locations. Like four out of every$5 we spend on retail purchases is at a physical store, according to a report from Capital One.

6:07Walmart and Kroger and Costco and Home Depot and Target are still huge parts of our economy and our lives.

6:14Sarah Gonzalez:And the secretive world of big box has been a place we've never gotten an inside look at. You know, when the Planet Money team made a t-shirt from scratch, we did not sell it through Walmart. When we launched a record label, the vinyl record for the inflation song was not on shelves at Target. And when we rescued a forgotten superhero who was then licensed for a cheese product, sadly, Costco did not offer to carry five pound blocks of micro face aged Gouda. Yeah. But seriously, Big Box is still this hugely important corner of American life that we just haven't had the chance to understand. No, not until now.

6:53Sarah Gonzalez:Hopefully, the Planet Money board game project is the first serious chance we've had to try and follow a product into the real world, into big box in this way. And it's part of why we decided to make a game in the first place. And before any of that can happen, Erica was going to have to convince a big box company to take our game. Okay. So I'm here. It is six hours before Erica's big pitch meeting. Yeah, I arrived extra, extra, extra early at the Exploding Kittens headquarters near West Hollywood. Hey Thor. Nice to meet you here. I can put my mic down for two seconds. That is Thor Ritz you hear there.

7:33Sarah Gonzalez:He has been helping us for over a year to make our game. And the moment he walks me into their big open floor office space, you can tell everyone is heads down preparing for this hugely important meeting. Any luck, Steve? Will those work? They might. These are the beanbags for the game. Thor and I walk past a team huddled over a new dice game that's top secret. It's one of the games that we're pitching, lightning dice. There's a small team doing last second experimenting with a new plastic material that sort of explodes in this fun, surprising way. So then I just sort of pop it down. All right.

8:11Yeah, the office is full of people putting the final touches on game prototypes. Ours is one of 13 prototype games that Exploding Kittens is planning to pitch to the representatives from BEEP.

8:23Sarah Gonzalez:Ah, yes, we have arrived at the BEEP situation. So we are not saying the name of the big box store coming to the office today because Exploding Kittens told us who they're talking to, the deals they're making. This is the kind of stuff that, you know, makes or breaks their business. And so we agreed to not record the actual pitch meeting and to not reveal the actual name of the big box store in that meeting. But suffice it to say, Exploding Kittens was taking this company's visit very seriously. Yeah, let's go through seating where everyone should sit. It is now T-minus one hour until the meeting.

9:02And Thor and I jump onto an emergency pitch prep call.

9:05Sarah Gonzalez:How's everyone doing? Yeah, no, I'm good. Okay. I do have a lot of notes. Elon Lee is the co-founder of Exploding Kittens. He has become our friend, our co-pilot, our general sage through the Planet Money board game project. Should I be nervous? Um, oh no. You know, they're actually, they're really good guys. However, they've seen the best games in the world fail without proper marketing support. So our goal today is to say, okay, we all love this game. Everyone who plays this game loves this game. Now we're going to tell you why it's also going to be the best-selling game of all time. Yeah, big box companies have small armies of buyers in charge of finding and buying the things for their sections of the store.

9:54Sarah Gonzalez:There are baby aisle buyers and cosmetics buyers and food buyers. And today, the Exploding Kittens office is going to be visited by the board game buyers from the big box store that shall not be named. This whole song and dance is part of something called line review, as in a seasonal review of product lines. Retail buyers have to regularly look at what's on the shelves in their sections of their big box stores and decide what to keep, what to get rid of. And most importantly for us, what new products to add for the upcoming season. But here's the thing. This line review, this only happens twice a year.

10:33Sarah Gonzalez:This really is our one chance to get a prototype of our game in front of the big box stores and then ask them, do you want to pay us to make tens of thousands of these things for you? And Thor tells Erika she's going to have very little time to make that case to the big box store. We're probably talking between three and five minutes of. You're saying do not bring this entire notebook. Yeah, I think you can aim for the upper end of that, like closer to five minutes. So, Alon explains that the plan is he'll be on a big screen in the room and do the setup. He's built a lot of trust with the buyers at this point.

11:09He's not worried about convincing them that the game is good.

11:13Sarah Gonzalez:What he cannot do, though, is be beloved co-host of one of the most listened to podcasts in the country, Erica Barris. Stop, stop, stop, go on. Although, for real, though, this is kind of the whole ballgame right here. We partnered with Exploding Kittens in part to optimize our chance of getting into big box. But they partnered with us in part because the big box board game world is getting more and more competitive. So Erica's job is to tell these buyers about our advantage, about Planet Money, our incredible audience, our history with projects, and frankly, just to keep their attention. Do they have tells?

11:53Like they touch their nose or like success? Keep going, keep going.

11:57Sarah Gonzalez:I've certainly have seen them do things that mean they're definitely not going to buy it, which is like if they start checking their phones halfway through. Oh, my God. That's so terrible. Yeah. Yeah. We've seen all of that. They take countless of these. Like we are just one of many people that they do the same sort of meeting with. So, yeah, like this is it. Right. We have like seven more minutes before and then that's it. Whatever we figure out now, we that's what we need for the room. So what else should I know? Don't be nervous. Smile. They have a very, very difficult job because they're trying to tell the future.

12:33Sarah Gonzalez:And that's not possible. So a lot of times, the best tool they have is to bet on the person instead of the game. And so they want to see this person is going to devote themselves to make it successful because ultimately that's really all they can bet on. This is going to go great. Don't worry about it. Yeah, right. Don't worry about it. Don't worry about it. Thanks a lot. I'll talk to you both soon. All right. See you soon. Bye. And with that, I go find an empty little room. Our podcast is, of course, the big part. And over my notes. Our listeners are the best of us, which is a great thing that Kenny said earlier.

13:11Until they called me in. Okay. Is it time? Yeah. And I turned off my recorder. Here we go.

13:23Sarah Gonzalez:Erica. Yes. Tell me everything. How did it go? I'm so excited. Okay, I'm going to walk you through the whole thing. Immediately afterwards, while Exploding Kittens was pitching its other games, I called Kenny to tell him everything. What are the first things that someone says in the room? Erica, sit down was the first thing I heard. Wait, were you like standing too long or something? Did you forget to sit? I was standing there. I was like, do I stand for my presentation? And I was like, what is this? Like, I'm ready to go, you know? So I walk in, I sit down eventually. Elon is up on the screen and he's like, this collaboration is the thing he's most excited about and so on and so forth.

14:07And he's like, and Eric is here. And I was like, oh, that's me, you know? And I don't even know what happened. I was just talking. I just was blah, blah, blah, micro face, blah, blah, blah, planet money, blah, blah, blah, devoted audience. So, yeah.

14:19Sarah Gonzalez:So what did they seem to respond to? So this is interesting. They did not respond to anything to do with the actual game. Oh, what? Or Planet Money, for that matter. Like, they just took that for granted. And they just kind of nodded and smiled. But they had concerns. Erica explained. They seemed a little worried about who the game was for exactly. Kids? Teens? Adults? And also the number of players? Is there a two-player version? But it seemed like the primary concern was about money, the price of the game. They were like, it kind of almost feels like it should be one of those$9.99 card games.

14:59Ooh, that's too cheap. Yeah, it's tricky. So they're like, it's not a$10 game, but it doesn't seem like a$20 game.

15:05Sarah Gonzalez:Like, that did not seem great to you and me, Erica. No, like, it almost sounded like they did not know what to do with our game or like how to place it exactly. Right. But the next day, hello, can you hear me? Hey, yeah, I can hear you. I called Alon, who had heard that price stuff very differently than the way we did. They did ask one question, and I think it was very telling. They said, how set are you on the price point? And that, for me, that's when like little confetti bombs started going off in my head, because that was like, oh, they're not asking about whether or not they should sell this thing.

15:48Sarah Gonzalez:They are now asking about the best way to sell it. Alain explained that if you think about a board game, our board game, there is a huge range of possibilities for what the final product would or could actually look like on a shelf. You know, we've just got a prototype for now. And at its core, our game is really just a deck of special cards. So there's an incredibly cheap version of that game, I suppose. It's just like, I don't know, here's a little, here's a deck of cards like Uno. On the other end of the spectrum, it's way more fun if we could afford to include a little figurine of like a Sasquatch to help keep track of turns.

16:23Sarah Gonzalez:A little vinyl guy, I love that. Why not? Tokens for points and maybe like... Little metal tokens, like a little clinky clanky, I love it. And maybe like a bigger, nicer box to hold all of that stuff. Right now, the game is still a prototype. So this pricing decision, it will ultimately determine all of that stuff. We will, to some extent, change our per unit production cost to meet the price point we choose right now. Yeah. I mean, what it all comes down to is once you set your price, it is very hard to change. Yeah. Like once the product is on the shelf, it's very hard to change a price. Because if you raise your price, that's suicide.

17:04Sarah Gonzalez:And if you lower your price, then suddenly it looks like you're discounting it. Like suddenly you're just trying to get rid of a cheap fence. So it's so important to nail it the first time. We're really setting the stage for the entire global market for that product by picking one price one time. What is the next step? Actually, let me ask you that. What is the next step? Oh, next steps, unfortunately, are waiting. Now we wait. I never think of anything as a done deal. until we get the paperwork, which means that as enthusiastic as they are and as excited as they are, who knows, maybe the next meeting will be, we'll present 20 games and every single one of them is AAA and we just get knocked away.

17:48Sarah Gonzalez:So all of that's possible. And now we wait. And that wait, it did give us some time to do some reporting because, you know, sure, we'd been inside the room with the buyers, but we wanted to know what was inside the mind of those buyers when Erica was pitching. So we made some phone calls. Okay, so you essentially have sat on the other side of that table. Like, I come, I give a pitch, you're the one who sits on the other side. Yes, correct. That was me. Okay, it wasn't literally him. No, that is Matt Adleman, but his job was exactly like those people I sat across from. Specifically, Matt was a big box buyer.

18:29Sarah Gonzalez:Yeah, Matt worked for Target and he sat through hundreds of these types of line review meetings. And you know, for Erica, she was a nervous wreck. We asked Matt, what is this moment like from your perspective, from a buyer's perspective? What are you thinking? I don't know. I'm like, here we go again. Where is this conversation going to go? It's very routine. If there's 100 line review submissions, about 30 of them actually get a line review meeting. Of the 30 that get a line review meeting, three to six of those brands ultimately get on the shelf. That's it. It's tough. Wow. Now, Matt was not a board game buyer specifically.

19:04Sarah Gonzalez:When he worked at Target, he was in charge of deciding what to buy for the deli and prepared foods aisles. Hummus, charcuterie, potato salad, regular salads. But he told us, honestly, when it comes to big box, hummus, board games, it's all the same. It's the same process. Like it's putting a box on a shelf, whether that's food, whether that's beauty, whether that's a game. Like the same thoughts go into it. The same analysis goes into it. The same, is this going to work or not? The same financials on the back end, right? Like how many dollars did you generate? How much margin did you return? Is it working or not working?

19:40Sarah Gonzalez:It's all the same. So our question for Matt was, in a pitch meeting like Erica's, pitching a brand new game, what would the buyers on the other side of the table be thinking? At the end of the day, what am I really thinking? Is this going to sell? if I bring this in, I have to replace something, right? You're going to take a spot on the shelf at the expense of somebody. Are you going to do better than that thing that I take out and put you in for? And there is a set amount of space in a store for this category. And I need to make that space as productive as I possibly can. Big box retailers will use these like blueprints of store shelves called planograms.

20:21And Matt says that's one of the things in his mind during line review pitches. He's kind of mentally playing retail Tetris.

20:28Sarah Gonzalez:And then when the meeting's over, yeah, we are waiting. But this is when the buyers like Matt have to really get to work. If they like something, if they like our pitch, they still have to then make a pitch to their bosses. Remember the nerves you had, I'm sure, sitting in the line review pitching to the buyer? Oh, yeah. Well, now the buyers get to go to their VPs or their SVPs and say, here's my planogram. Here's what I want to do. And now the VPs and all the senior leaders get to go, what about this? And they challenge you like crazy. And so now I need to pitch my stuff to them just like you had to pitch to me.