In 2014, Classic Toy Trains columnist Lou Palumbo wrote an opinion piece titled “Flyer Guys Are Different.” A lot of American Flyer fans took offense at the characterization. There are differences in Lionel vs American Flyer fans, but understanding why the two are different tends to lead to greater understanding than worrying about how they’re different, or what the specific differences are.
Marketers divide consumers into different groups, and the people who favor American Flyer tend to fall into a different group than the people who favor Lionel. That doesn’t make one better than the other, but it does mean they have different values from one another.
American Flyer vs Lionel isn’t Ford vs Chevy
One thing that makes the difference between Flyer and Lionel fans hard to understand is it’s not a case of Ford vs Chevy, from a marketing standpoint. There’s more difference between 2-rail Flyer and 3-rail Lionel than there is in Ford vs Chevy.
That’s the source of much of the misunderstanding. Mechanically, a vehicle made by Ford or General Motors work on the same principles. If you’re a brand loyalist, there’s a reason behind it other than technology. You or a family member had a bad experience with one, or someone you know worked for that company.
Lionel vs American Flyer isn’t Ford vs Chevy. It’s a lot more like Ford vs Tesla, or Beta vs VHS, or Apple vs Microsoft. There’s enough difference between the two to attract a different audience. American Flyer survived on the market for the same reason Apple did. It was just different enough to attract enough market share to survive.
We’re a great marketing case study
Marketers have a theory called Diffusion of Innovation that applies to any category of products. The idea is that when a new product category hits the market, the first people to buy it are really passionate people called innovators. This is about 2.5 percent of the population. These are the kinds of people who spent thousands of dollars on a 20-inch flat screen TV, or bought a home computer in 1978, or willingly paid $50 for a single LED light bulb.
The next group to buy in are called early adopters. These are people who bought home computers in the early 1980s. This group is larger at about 13.5 percent, but still relatively small.
The two largest groups are the early majority and late majority. Going back to the computer market, the early majority is the people who bought their first computers in the late 1980s. Brand didn’t matter. We’ll get back to Apple in a minute. The late majority is the people who bought their first computer in the 1990s. Laggards are people who lived through the 80s and 90s and finally bought a computer in the 21st century, or never bought one at all.
How Lionel and American Flyer fit into the market
Lionel and American Flyer both make up a minority of the overall model train market. HO and N scale are much larger markets. The reason Flyer and Lionel survived against the 2-rail DC juggernauts is because they were just different enough. Being earlier also helps, because that gave them an element of nostalgia.
The Lionel and American Flyer market survived for the same reason Apple survived in the face of Microsoft and its overwhelming market majority in the 1990s, which at one point approached 97 percent. AC Gilbert didn’t figure this out and I don’t think Lionel ever consciously figured it out. Apple figured it out because it would have gone out of business if it hadn’t.
Lionel, Flyer, and Apple all survive or even thrive on the idea that you don’t need 100% of the market in order to survive, or even 34% of it. Apple realized in 1997 that 84 percent of the market absolutely, positively would never buy a computer from them, even if it was the last computer on earth. If it came down to buying a computer from Apple or going without, they’d go without. Apple chose celebrate that, rather than see it as a problem. Microsoft sees that as a problem, and that’s the literal difference between the two companies.
Lionel and American Flyer are both like Apple in that regard. The collective majority prefers something smaller than 1:64 scale and that runs on 2-rail DC out of the box.
You can be a laggard and an innovator at the same time
The same characteristic that makes you a laggard can also make you an innovator or early adopter. As far as Athearn is concerned, Lionel and Flyer people are all laggards. Lionel and Flyer survive in a market where companies like Athearn dominate because they offer something Athearn doesn’t. As far as Lionel and Flyer are concerned, those types are innovators, or early adopters.
This is also the reason you see infighting on forums. Lionel and Flyer types value a lot of the same things. But within those groups, you still have traditionalists and scale modelers who just happen to want a bigger scale.
And ultimately that’s the difference between Lionel and Flyer guys. Both of them see their niche as something that requires fewer compromises than the alternatives. But the specific compromises they’re willing to make are different.
And if that group seems religiously devoted to the set of compromises they chose, that shouldn’t come as a surprise. When your overall share of the market is below 15 percent, that’s the type of personality your niche attracts. The same type of person who’s willing to pay $60,000 for a Tesla because they believe electric cars will save the planet, or the type who buys an Apple computer precisely because they don’t like Microsoft Windows.
When marketing guru Simon Sinek talks about Apple and compares Apple to, say, Gateway, he says the difference is that Apple figured out how to attract an audience that believes what it believes. Gateway arguably had that too, in the early 90s, but lost it sometime after the turn of the century. Once Gateway was just another computer company, it was done. Apple literally has a cult following, and at one time, Gateway had one too.
It’s the same thing for Lionel and American Flyer. They both have cult followings. I’m not sure there’s a significant difference in what the two groups believe, but there’s definitely significant difference in what the two groups value. There’s overlap too, and some people like both. But there’s enough difference that some people will always want one or the other.
And that’s why Lionel put American Flyer back into production after acquiring it as part of Gilbert’s bankruptcy rather than burying it like it did Ives. There was enough of a market there for it to be worthwhile.