Gamestop’s Multi-Channel Learnings, from President, Tony Bartel

Mary Vincent, who writes a blog called Gaming Trends, and is founder and director of Green Star Solution, a business technology strategy and media firm, sat in on Tony Bartel’s Gamestop presentation at eTail. Here’s what she had to say about it, courtesy of her blog – thanks Mary! – Kelly Hushin, Editor, the eTail Blog

by Mary Vincent

(post appears originally on the blog Gaming Trends)

Tony Bartel, Gamestop President, started his eTail West presentation with a great gaming time line video, and the tag line: “We Sell Fun.” The company is in the midst of a channel transition and is moving into the fast-growing (exploding) digital area.
Tony stated that Gamestop is a $9.6 billion company doing business in 17 countries around the world, is number one in market share in most of these countries, and has been growing through the recession unlike other retailers. He gave his reasons for success, multi-channel learnings and actions during the video, and I’ve posted them below for your reference. (note that audio stops at 25 minutes)

Reasons for Success:
1. Culture is a customer centric, roll-up your sleeves work-ethic
2. Specialist Focus: Gamestop competes against a lot of big boxes; the company doesn’t make the games and sell them at the same price or a higher price so they make sure every gamer has a better experience. “We want to be the smartest and best way for them to access the rich benefits of gaming,” he said.
3. Unique value model competitors don’t have: Gamestop has a “Buy-Sell-Trade Model” that allows people to bring back games they’ve already played and convert them into currency to buy new games. This generated $1 billion of credits last year through games traded and spent on new games.
4. Agnostic Aggregator – “We give gamers exactly what they want; We listen to them and seek to understand,” said Bartel. Gamestop has the 17th most valuable brand in America and a Net Promotor Score (NPS) that rivals the iconic Harley Davidson brand. Their challenge is to take that great experience in all 660 stores and bring it into all channels.

Gamestop breaks-down gaming into two areas:
1. Big Games (Console Games) 50% are 35 years and older; 50% are women; 65% households play; 120 million consoles, 2/3 connected – ($50 billion  business globally estimated) Console Gaming has slowed in the last two years.
2. Small Games – Facebook claims more than 600 million users; over 61 million people and high as ago 90 are playing online and mobile qames (almost 1/3 of people say I have downloaded a game in the last month). Lots of growth and Gamestop is moving into the small game environment.

– Facebook/Zynga 9%/yr
– Online 11%/yr
– Mobile 14%/yr

Four Gamestop Multi-Channel Learnings
1. Go beyond ecommerce website
– 51% of customers say they do online research before they buy in store; 46% go online and buy online; 60% go to store but buy online.
– Per Tony: “Where are people going online to look for us? What you see are coupons, Facebook, Twitter. Here’s the insight: People are not going to the website and we don’t control reviews; they are going to their friends on Facebook, YouTube videos to view products etc., and we need to be there.” The Facebook page has 1.8 million Likes and the company finds it’s a great way to communicate and understand what’s taking place in the minds of their customers. Mobile users are using GPS and directions but Tony says they need to do a better job of engaging customers in mobile world, and it’s a huge opportunity to expand. 14% of customers are already transacting on mobile, 50% say they will transact on mobile in the future. Tony says they have to be there to address their customers’ needs. 38% of users say that if a brand interacts with them in a social environment, that will influence their purchasing decision.
2. Go beyond MassMarketing (discounting)
– Gamestop asked customers: “What do you want to do when you engage with the Gamestop brand?” 70% said “Give me a Coupon,” 58% said “If you listened to me and gave me an offer that was relevant but not necessarily a deep discount, I’d deal with you,” 52% said “Give me services I’d like and I’ll engage with your brand” (1/4 of the people in the Gamestop loyalty program said the loyalty program drives their purchases).
– Gamestop wants a 360-degree customer view and in exchange will personalize deals, i.e. recommendations, promotions
– Gamestop launched the PowerUp Rewards Program six months ago and now has seven million members. It is points-based, not discount, and it’s two-tiered (free and paid; $14.99 with additional benefits in By-Sell-Trade Business). The rewards program results show that members shop three times as often and account for 25% of transactions. They trade in enough games to represent half of their purchases. Now there are 40 million games loaded into their libraries. What can cutstomers get with their points? Rewards for pizza etc., epic rewards like life-size character statues, trips, personalized game communications, skins, etc.
3. Go Beyond Commoditization (price discounting)
– Loyalty program
– Make more differentiated products and use product-exclusivity, i.e. working 6-12 months in advance with publishing partners to create specialized game content, i.e. special characters
– Bundled products for great gaming experience – make sure buyers have everything they need before leaving the store
– Midnight launch events
– Gamestop tournaments
4. Go Beyond Store and get into Digital Environment
– Discovery is very important; i.e. iPhone has 1,000 apps but only 1/3 of users have looked at 10 apps in the last month. It’s about engagement, curation, personalization, monetization…like a “freemium” model with micro-transactions and advertising.
– Gamestop found its customers were having a difficult time finding games, thus, Gamestop now helps customers discover new games.

As a result of these multi-channel learnings: Gamestop amended it’s company statement to: “Gamestop is the smartest and best way to experience the rich benefits of gaming anytime, anywhere and on any device.”