GameStop deploys beacons to bring in millennials

NEW YORK—GameStop (NYSE:GME) isn't playing games. The retailer posted its largest sales gains in six years thanks to new digital initiatives that are successfully wooing those most elusive of shoppers: millennials.

GameStop took center stage at NRF's BIG Show this week as President Tony Bartel unveiled impressive results of the company's work in digital innovations that are tying together the online, in-store and mobile customer experience.

Roughly $1.1 trillion dollars annually is influenced by digital channels, according to Alison Kenney Paul, vice chairman and leader, U.S. retail and distribution at Deloitte. "We have a lot of catching up to do, it's a fast moving target. There is no online and offline [anymore], integrating digital is a business operative."

Which is exactly what GameStop has done in a product category that exemplifies fast moving: video games. And as gaming content has moved online, GameStop has developed initiatives to serve one of the most digitally savvy demographics today.

The GameStop Technology Institute (GTI) launched in April 2014 and is a collaboration between GameStop, IBM and the Center for Retailing Studies at Texas A&M University's Mays Business School. The program was tasked with helping GameStop build research and development processes to create and implement the next generation of new, innovative business applications inside retail stores.

Bartel showed off the results of this program during the Tuesday morning keynote at the conference.

"We see millions of millennials every week as customers and as associates," said Bartel. "Millennials are one of the best things that have ever happened to us as retailers. They have high standards [and] are so much more than an economic force to be reckoned with."

Through the GTI, GameStop is developing and working toward integrating technology into its 6,000 stores. But first comes a pilot to test geo-fencing and beacons in 36 stores during the second quarter in its home state of Texas that builds on the retailer's PowerUp loyalty program.

PowerUp boasts roughly 40 million members worldwide and comprises 71 percent of the chain's total sales. They spend three times that of non-members and are five times more profitable than other customers.

The new store environment is designed to create a better in-store experience for these shoppers. Beacons recognize PowerUp members on entering and ping a store associate on their tablet with that shopper's profile. Information hotspots beam game details and trailers to the shopper's device and can be transferred to larger, in-store display screens with a flick of a finger.

Store associates can access a PowerUp member's likes and interests, assisting shoppers looking for a well-matched gift.

"We literally are creating an individualized, highly-curated experience for the customer powered by ultra-high speed internet to meet the needs of this generation," said Bartel.

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