Last Updated on November 25, 2018 by Dave Farquhar
Lionel sold starter sets at Target in 2006 and again in 2008, though the arrangement only lasted a couple of years. The sets were priced at $249.
From the pictures, it looks like pretty much the same old starter set Lionel has been selling since the early 1950s, with the addition of the modern Fastrack with integrated plastic roadbed that plugs together easily. That’s not all bad.
The locomotive is made from the same dies as my dad’s first locomotive, which dates back to the 1952-53 timeframe. It’s the dreaded, infamous “Scout” body that makes self-styled serious hobbyists howl, but let’s face it, this is the locomotive that made many a person fall in love with Lionel trains. Dad and I had lots of fun with it in the basement when he set his old Lionel trains back up in 1986. Although it looks like the dreaded Scout, it has a new motor, so it shouldn’t have reliability problems. And the people buying this probably wouldn’t notice the difference between a 4-4-2 and a pricier locomotive anyway.
The train has “Lionel” splattered all over it. “Serious” hobbyists won’t like that. They want trains lettered for the Union Pacific or Burlington Northern-Santa Fe, Norfolk Southern, or CSX. Or maybe they’ll settle for a long-gone fallen flag railroad like the New York Central or Pennsylvania Railroad. But serious train guys aren’t really the audience. When they shop at Target, they’re there to get a can of Krylon and maybe they’ll wander down the toy aisle in hopes of spotting a 1/43 diecast car for the layout, but that’s it. Lionel is going for the retro cool factor here.
I do think it’s a mistake to be offering only this set in the stores, however. Target is selling Lionel’s Thomas the Tank Engine and Polar Express sets online. The Thomas set costs about $50 less; the Polar Express costs about $50 more. I think either one has the potential to outsell this set. Maybe Target and Lionel executives are watching to see how the sets sell, and if they all do OK, then they’re planning to sell the others in stores next year.
At $250, I suppose it’s a decent value. The retail value on the track alone is about $60, and the transformer is another $90. If the locomotive were available as a separate-sale item, it would likely sell for $75 minimum, and it’s almost impossible to find Lionel and Lionel-compatible train cars for less than $25 anymore, unless they’re used. So the bundle costs about $75-$100 less than buying everything separately would cost. And many people have pointed out that an awful lot of Christmas gifts cost $250-$300 these days.
For $250, I wish they would replace the locomotive with the locomotive out of the Polar Express set, which is more attractive and runs well, but that would probably hurt profit margins.
I think Target would do well to put a display somewhere in its bigger stores with the Lionel train set, accessorized with whatever flavor of ceramic villages Target sells. Most of those villages are sized about right for Lionel trains and they look good together. I think it would increase sales of both the villages and the train sets. Hobbyists have been combining them in their basements for years, but you don’t see them together out where the public goes very often. People who will spend thousands decorating their yards would likely be happy to drop $250 on a train for around the tree and another couple hundred to get enough ceramic buildings to build a town for the train to serve. And next year some of them will be back to buy more track and more buildings to make it even bigger.
I’m hoping this opportunity isn’t lost on Target and Lionel executives, but I won’t hold my breath. The modern Lionel seems to have forgotten that it made a lot of its money in the ’50s by selling additional locomotives, cars, track, and accessories to its existing customers. This was so lucrative that other companies fought for the market too.
Of course, some people will lose interest, and the train will end up in a box in the garage, attic, or basement, and eventually find its way into a yard sale or secondhand store. Maybe there, someone else will buy it and get interested. Or a hobbyist will rescue it and integrate some of the pieces into a bigger layout.
All in all, I see a lot of positives here and not too many negatives.
David Farquhar is a computer security professional, entrepreneur, and author. He started his career as a part-time computer technician in 1994, worked his way up to system administrator by 1997, and has specialized in vulnerability management since 2013. He invests in real estate on the side and his hobbies include O gauge trains, baseball cards, and retro computers and video games. A University of Missouri graduate, he holds CISSP and Security+ certifications. He lives in St. Louis with his family.