ICv2 recently sat down with WizKids Executive Vice President Joe Hauck to talk about the two major issues of the day for WizKids.  In Part 2 of this two-parter, we talk about the status of the company's new exclusive distribution deal with Diamond/Alliance.  In Part 1, we talked about the reaction to the retooling of the company's flagship HeroClix line. 

You mentioned one of the outcomes of the Diamond Alliance deal. What are we, about six months in on that deal right now?

Actually it's a little bit less, because officially the deal started April 1st.  But it is a transition period.

So four+ months in, and after some major releases, obviously the Star Wars product and this new revamped HeroClix, what's your feeling on how this is working and what your store counts are after the deal?

It's definitely working very well for us.  A huge driver of that has been the information.  For Star Wars, we were able to do a lot of promotions that I'm not sure we would have been able to do previously, managed as well as it was.  Again, not because the other distributors had a lack of competency, it was just things like being able to say everybody who buys a display box of Star Wars would have to be able to be returnable to Alliance.  That was very easy to do on this deal, it would be harder to do with more distributors -- making sure people weren't double dipping, getting one from here, one from there and being able to return them all.  Being able to say, 'Yes we know everybody only got one display they'll return,' was much easier.

One of the things we were able to do with the data is that as we were going through the Cartoon Network promotion, we were able to take it, put it onto Google maps and find out where all of our downloads for the coupons were.  Then we were able to match it up to all the locations we got from Diamond/Alliance to find out okay, Texas was really saturated with downloads -- do we have enough stores in Texas, no we don't, hey the folks in Alliance/Diamond who service Texas, start calling your accounts and tell them how many downloads we're getting and they should order more products.  It worked very well for us, because we were able to proactively analyze the data on the fly.  We made course corrections within the promotion to make sure we had the right product in the right areas.  That was a huge benefit for us, to be able to very quickly turn things and add in different areas.

When you look at the total number of stores that picked up Star Wars, it was incredible--it was about 30% more than HeroClix.  From that perspective, being able to manage and look at those promotions and course correct as we're going.  It's been a huge benefit for us, because if we're doing anything that we feel is amiss, we have the opportunity to go back and fix it and find out what's wrong.

The other thing is that now that we've got access to the current data, we've been able to work with Diamond Alliance to go back and data mine all of our previous history with them to be able to use that as a benchmark analysis.  We'll be able to analyze if we've picked up enough stores.  If we haven't, where are the areas we are short?  We'll be able to separate them out by the different metropolitan markets, we'll be able to focus our attention on growth in specific areas; rather than making a blanket statement of 'fix everything at once,' we can find a specific problem and fix it.

From that perspective, it's been huge for us.  We can look at the data and just analyze our sales trend.  That's why I know things like the tail end of our releases are getting fatter and longer, because I can see the sell of our product into the retailers over time.

Do you have any feel of what happened to your store count for the key brands from before the deal to now?

I did an analysis on Avengers versus Supernova, and the store counts were all up based on Alliance Diamond's information, and the sales amounts were all up on a per store location, as well as overall.  Look, I'm sure there are still some retailers out there who are sitting there for political reasons, or they had a bad time with Alliance in the past, or maybe they owe Diamond money; they're not going back to Diamond and Alliance to do this deal on principle.  That number has been dwindling over time.  We've had people who've written us letters after this whole deal that said 'I really was not in favor of this, but now that I've re-engaged with Alliance and Diamond and I've re-engaged with you guys,...' a lot of people have said that it's better service than they had before.  They know if there's a problem we'll call up someone on the hotline to Alliance and make sure it gets fixed right away.  The level of service has been going up for people, and there have been a lot more people coming over.  Are there still hold-outs?  Yes.  But if they got on the phone with me or Lax or Mike Webb, or with anybody else in our group and they talk to us about the changes and benefits, we're turning them around.