GameStop's CRM Investment is Spurring Engagement and Sales

Press enter to search
Close search
Open Menu

GameStop's CRM Investment is Spurring Engagement and Sales

By Nicole Gillo - 12/02/2016
As GameStop transitions away from its video game business to focus on digital and technology brands, it continues to build additional revenue streams that drive higher margins — digital was up 13% for Q3 year over year. The strategy for the last few years has been to diversify the business and now, Gamestop is seeing solid signs of progress on that front. An increase in operating earnings this quarter in the face of negative physical video game sales is an indicator of that progress. Another indicator of progress is the fact that this quarter, 50% of earnings came from businesses other than physical gaming. With the fourth quarter upon us, the retail plans to continue to focus on execution and delighting customers in stores and online.
 
“It’s about optimizing the footprint and using the PowerUp Rewards program to drive to sales down the road," said Rob Lloyd, CFO, GameStop on a recent call with analysts. “A little early to talk about what we expect to see in terms of store growth from either the Tech Brands division or the collectible only stores, but I will say that we have laid out the longer roadmap on Technology Brands increasing the store count. At this point I’d say that looks similar to what we have done for 2016 — in other words it will be a mix of opening stores and still some other retailer acquisitions.”
 
GameStop launched its new Technology Brands segment in 2013 when it acquired Simply Mac, the largest certified reseller of Apple products, and Spring Mobile, the fastest growing AT&T authorized retailer of wireless services. GameStop further expanded its technology brands by entering into a strategic dealer agreement with Cricket Wireless, an AT&T subsidiary offering premium non-contract wireless service.
 
The collectible business is big and getting bigger, and the retailer is managing the fast growth of the digital business with its variety of omnichannel and standalone formats. Technology Brands is one of the most exciting growth units for GameStop, and its partnership with AT&T will continue to bring greater opportunities. The foundation for all these businesses continues to be the PowerUp Rewards program. At about 50 million members worldwide, the CRM program brings many advantages, including deep consumer insights, as the retailer can execute a weekly and monthly consumer survey panel to understand behavior in gaming, collectibles, mobile and other products.
 
“As an example, we discovered through our PowerUp Rewards catalog that our gaming consumers really like the ThinkGeek items for the use of their points which led us ultimately to the acquisition of that innovative website called ThinkGeek.com,” said CEO Paul Raines. “Another advantage is that we are also able to pinpoint specific collectable items consumers want with the video game — like a statue or a T-shirt. PowerUp also allows us to have tailored communication directly with members via e-mail or their PowerUp phone app.”
 
The retailer can identify which consumers have the heaviest trade inventory at home to provide incentives for them to go to a store and trade towards a new title. Another example of this power is the promotion that was stealthily launched to provide for a $1 purchase of Call of Duty: Infinite Warfare with a selected trade. These are just the tip of the iceberg for GameStop as they begin to scratch the surface of the potential for this program.  
 
To learn more about how the retailer is using technology to facility its strategic shift away from its core video game business join GameStop’s EVP and president, Mike Mauler for a keynote panel discussion on Sunday, January 15 at 9:30 am to kick off Retail’s Big Show. Mauler and the CEO of the Vitamin Shoppe, Colin Watts, will share how to capitalize on the power of customer analytics to create touchpoints and ultimately, get to know the customer better in their session titled: From Data to Delight: An Insight-Driven Revolution of the In-Store Experience.