So is GAME Group doing well or not? It’s not an easy question to answer.
On the one hand it just posted market beating figures (sales down 9.9 per cent), it has partnered with the hot new toy of the moment – OnLive, launched two new websites and put together a successful consumer event.
But those two new websites, as shiny as they are, didn’t work for days, causing no end of trouble. And what good is beating the market if you’re still making a £48m loss?
“There’s two sides to it,” admits GAME CEO Ian Shepherd. “We’ve clearly outperformed the market and taken a larger market share. But there is no getting away from the impact a soft market has on a retailer and that’s why you have seen a first half loss of the magnitude we have published.”
Have the new websites been worth all the hassle?
It was a difficult process, we had challenges in swapping from the old site to the new one, which we regret. But these sites are a fundamental change in our underlying technology, which allows us to integrate the online offering with our stores more closely. We can now deliver on becoming a proper multi-channel retailer, where you can buy online and collect in store or buy in store and have delivered at home.
We want to grow our online share, and we will. But the competitive weapon we’ve got that a lot of our online competitors do not have, is a store estate. Multi-channel lets us create offerings that customers won’t be able to get elsewhere.
Do you have to get involved in the price war that your online rivals are engaged with?
Why is a game specialist gaining market share when in other industries specialist retailers are losing share to generalists? In games there are things that a specialist can do which a general retailer will struggle to match. When a new game comes out, some of our competitors will only have one vehicle, which is headline price. We have other ways of giving value to our customers – reward points, trade-ins, exclusive versions. We are in a position to deliver terrific value for money, whilst not getting dragged into the worst excesses of some of the competition on prices.
GAMEfest seemed to go well, but its proximity to Eurogamer Expo drew some critics. Were you happy with how the event went?
The customer feedback is what matters to me, and it was overwhelmingly positive. We were able to showcase really good content.
Is there room for more than one games event? Of course. What we were doing with GAMEfest is in the interest of the industry, was taking an event they were coming to anyway – which was our store managers conference – and using that to connect to consumers as well. There was a good reason why we did it when we did it.
Why are you backing OnLive?
We’re moving away from just being a bricks and mortar retailer and into a multi-channel CRM business. Three and half million people walk into our stores every week and our role is to take content and make it famous. The conversation with OnLive was simple, they were coming to the UK, they wanted to have their products presented to as many customers as possible, and we’re a natural partner.
We are the only retailer in the world that OnLive is partnered with. And that’s because we have gone out of our way to become a friend of the digital company.
It sounds to me as if GAME isn’t so much a retailer anymore, but a marketing tool.
Stores are a part of this. The biggest value-add we have is our staff talking to customers. Ironically we published a 40 per cent growth in our digital revenue, and the vast majority of that revenue was from our stores. But my point about saying we are a CRM business is not that we don’t like operating stores, it is just that our role is to take content and present it to customers in the most positive way. That means we have no fear of browser, mobile or casual games, we see them as opportunities.
Aren’t you giving customers away to these digital retailers though?
That is a foolhardy view for a retailer to take. You don’t hold on to your customers by not showing them the very best the industry has to offer. You hold on to them by doing a great job of showing them the best. If we are delivering great service, great value, using things like the Reward Card to draw them back, then broadening the services we sell is absolutely a positive thing to do.