The story of Chips summarises the pressures that has faced games retailers over the last three years.
Price competition from supermarkets and online retailers, coupled with a shrinking release schedule and a rising digital market place, has made selling games in the UK an incredibly challenging job.
We've seen mass store closures and entire shops disappear from the High Street, a fate that nearly befell Chips in 2010 when it entered liquidation.
But it survived. And the firm's MD?Don McCabe has been making changes to ensure it remains that way. Within the last 12 months Chips has de-franchised itself, leaving just four Chips stores – Northallerton, Consett, Stockton and Bishops Auckland. Its former franchise partners are now indie retailers in their own rights, including Xpress Games, ThatGameShop and Games Dojo.
We made the decision that we were going to negotiate with our franchisees. Once those negotiations were over we closed down the franchise company, putting that into liquidation,” says McCabe. That went in March of last year and allowed us to get back to what we do best – be a really good indie retailer again without all the side issues caused by certain franchisees.”
The new Chips is adapting and utilising all the new avenues available to modern indie retailers, including global game sales via the likes of Amazon, eBay and Play.
We sell all over the world now. We're not just in the North East of England. We're a multi-channel and multinational retailer in many respects,” explains McCabe. We make around 45 per cent of our revenue from online and foreign sales. It's growing rapidly.”
Going forward, McCabe says that Chips has a digital focus. Having re-acquired the ChipsWorld brand from the liquidators (the firm's former name) the company is working on rebuilding its website.
After we went into liquidation, we parked ChipsWorld.com and left it to one side,” says McCabe. When we came back we had to negotiate with the liquidators to buy that name back, and that's been parked until we thought we were in a position to start reviving that.”
We made the decision that we were going to
negotiate with our franchisees. Once those
negotiations were over we closed down the
franchise company, putting that into liquidation.
That went in March of last year and allowed us
to get back to what we do best – be a really
good indie retailer again without all the side
issues caused by certain franchisees.”
Don McCabe, Chips
But this isn't going to be a simple retail outlet. The new ChipsWorld website, when it launches shortly, is something that McCabe promises will be a more rounded experience. It will feature customer reviews, blog posts and video content.
On the first stage we have built a social media site,” says McCabe. We've been building in a blogging aspect, customer reviews, those sort of things. We need to make the shops more social and we're building that into the website. It will have a transactional side but that's not where the emphasis is.
We want customers to feel comfortable coming to the website and not buying anything. But if they want to buy something they can. We want to encourage customer reviews. I've got a few people to get us kick-started – all independent. My wife teaches journalism, and has 100-odd students so they're all jumping to write reviews and little pieces. Once it's up and running it'll be self-fulfilling.”
With this digital focus and the difficulties of physical retail today, you might be forgiven for thinking that Chips won't be expanding on the High Street once again.
While the firm isn't planning any adding new stores any time soon, it is expanding what it sells. Chips is becoming a more general entertainment store.
The High Street is still very difficult. We're not sure whether we'll expand the shops just yet. We need to do more bits and pieces online,” McCabe explains. We're looking at a few possible different directions. We need to diversify it slightly and become less of an exclusive game store and more of an entertainment store. We're doing more in terms of merchandise, board games – becoming more of a general entertainment store.
We look at all aspects. We've started dabbling in phones and tablets – areas which offer some opportunity and new technologies as they come in.”