GameStop makes personalization omnichannel

CHICAGO—GameStop (NYSE:GME) sets itself apart from other retailers through two unique qualities: passionate sales associates and its Power Up rewards program. The specialty retailer, historically focused on selling video games, now has more than 4,200 stores across the United States, as well as other channels including a magazine, an e-commerce site and several mobile apps.

However, the company recently announced plans to shrink its core business and shift focus toward stores that offer other products, such as AT&T wireless service, as it considers acquiring other tech retail chains and offering new merchandise.

Today, one of the retailer's most popular programs is its buy and sell business, or trade model for games, reported Richard Armour, senior director of multichannel at GameStop, during a session on omnichannel personalization at IRCE 2015.

"When we talk about omnichannel, it's the ecosystem of the store," Armour said. "Our online isn't trying to replace in-store." The retailer goes out of its way to create a seamless experience for consumers who often shop both online and offline.

Rewards and loyalty programs are big brand-builders and moneymakers for GameStop. One in every five customers is a member, accounting for 71 percent of sales and spending three times as much as the average shopper.

GameStop's omnichannel model begins with the customer. Approximately 60 percent of its shoppers are millennials, who demand an authentic and transparent experience. Despite what people may think, millennial consumers want in-store human interaction. But the retailer still wants to provide the easiest shopping experience, whenever or wherever the consumer is. Therefore, the shop offers ship-to-home; buy online, pick up in-store; and reserve online, buy in-store—the company's fastest-growing channel.

"Our rate of change internally must be faster than our rate of change externally," Armour said. Research found that more than 40 percent of GameStop's customers were doing product research before making a purchase, so the retailer is focused on getting more information in front of the consumer.

On the back end, the retailer ensures that online and offline work together and don't compete with one another. Externally, that relationship factor is just as important. The company has a metric it calls "influenced revenue." Upon engagement with the brand, GameStop follows a shopper for three days to see their activities and behaviors after the initial research. GameStop monitors post engagement both in-store and online.

"Every $1 in direct sales online is influencing at least 10 times that in-store," Armour said.

GameStop could be on the verge of a big corporate change. The retailer announced earlier this week plans to acquire Geeknet, the parent company of online retailers ThinkGeek and ThinkGeek Solutions. However, the outcome became uncertain last week after Geeknet entered an agreement to be acquired by specialty retailer Hot Topic for $17.50 per share and a total value of $122 million.

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