Asda announced exciting new plans for games at its annual entertainment conference last month. Christopher Dring sat down with head of games buying Duncan Cross and category director Fergal Gara…
Tell us about the new store concept at Asda.
DC: We started opening the ‘future concept’ stores in June last year. We have now launched 190 of them to date, and we’ll have done about 230 by the end of the year. Our target is to have these concepts in 320 of Asda’s 350 outlets.
How will they evolve?
DC: We are looking at interactive touch screens with a company called Retec. These screens let customers understand trailers, and we can recommend titles through it, so if a person likes Title A we can recommend Title B.
We can also explain what each console does. This lets us demonstrate fantastic gaming products to the customers in a visual way.
Also, with the increased space, it is about getting a more branded presence. We want to have a point-of-difference between the fixtures. You’ve seen the Nintendo and Xbox branding on our new mocks-up; we are really keen to bring gaming to life.
Is staff training a key part of this?
DC: Absolutely. It is great having this sort of kit, but you need the colleagues to educate customers and to try and up-sell and grab sales for both ourselves and the publishing community.
What about the loyalty cards you’ve introduced?
DC: We’ve had £100,000 placed onto those cards. It has far exceeded our expectations in terms of our targets. We’ve rolled out the Mario Kart gift card, and it enables customers from different points in the store to touch music, video and games. It is a great call-out, and enables us to get that particular brand and franchise in front of the customers. It also solves those gifting problems some customers have, when they’re just not certain what to buy.
This was something that Woolworths did in the past...
DC: They did it very well. And we want to follow that. We’ve got a heritage in it; Asda has done it and Wal-Mart has been doing them for years, but not for games before.
You’ve made some big hires – like Gamestation’s Andrew Thompson and Frazer Locke as head of new business and head of online, respectively. Is it fair to say you’re in better shape staff-wise than ever before?
DC: We are over the moon. It is great to get some specialist industry knowledge to evolve our online and our other new businesses in games. Our online strategy, in particular, we need to get right, so it is fantastic to get them on board.
Have you benefited much from the closure of Gamestation’s York office?
DC: We have secured six heads from Gamestation. Jenny Leach is one of our key senior buyers, and she worked at Gamestation for four years and dealt with the platform holders. So that’s a key acquisition for our trading team. There have been some new recruits from Gamestation for our supply team and in merchandising planning Neil Tomlinson came from Gamestation as well. So we’ve got some key individuals in key functions, and we can benefit from their seasoned knowledge. And the appointment of Andrew and Frazer is, of course, great news, as well.
Are you still hiring?
DC: We’ve got everyone we need in the short term. Never say never, but we’ve got what we need for now.
What’s your current evaluation of Asda’s online games business?
DC: Within food we have a very good online business, but we haven’t yet exploited it in games. We are fairly open with this. There’s a lot of work that needs to be done to catapult it forward. But because it is run as two separate businesses, as in the in-store is my team and online is a different team, that gives us some real challenges. Capability at the moment is not where it needs to be, but we have some very aggressive plans to put this in place.
Are you looking at a move into the pre-owned arena?
FG: It is not top of the agenda, but it is one to watch. If we want to be a serious player in this market, then that is a huge part of the business for the specialist, and is not one we can ignore. There are no launch plans at present, but pre-owned is an area we have to watch.
What do you make of the price rises on certain games?
FG: It is a worry. We don’t think this is the time to take up the price of products for customers in a recession, in a market that is already down. We are worried what affect this will have on the market, and clearly when you operate on the narrow margins that we do, then how we make this up in our business is a concern for us
What are your thoughts on the number of releases this Christmas?
DC: The huge volume of titles is a challenge for us. We have had to look hard at our chart lengths and the capability we’ve got to take through a high volume of titles in a few weeks. I guess we’d like them to be spread out further. But it’s part and parcel how the industry operates.
Will you stock PSPgo?
DC: We will stock it. We will continue to look at PSP along with other forms of hardware. We are talking to Sony at the moment on what the forecasts are. But we will stock it.
Are digital downloads a concern?
DC: It is obviously a concern. We operate in the physical market. But we’ve got to expand our operations online and in the digital market. So it is one to watch for us as well. That’s where the market is evolving too, so we need to keep am eye on that.
FG: It is very early days in the digital market, especially for games. I think Sony selling their own games through their own outlet is not unreasonable, because we’re not able to do it. As the market develops we need to consider how we approach the digital sector, not just for games but across entertainment. And we will look to work with Sony and with others when that capability is in place.
What are your online plans?
FG: We’d like to deliver some improvements this side of the year. We’re not going to change the world in a few months. But what we can realistically expect before Christmas is better joined-up activity with Asda.com. What we need to do very quickly behind the scenes is look at the whole infrastructure. We need to look at the partnerships, the business model and next year you’ll see some notable differences to what we’re doing online.
Are you chasing the former Woolworths customers?
DC: Most of Woolies customers have distributed to other places. But there is a huge proportion of the Woolworths market that only comes in at the seasonal peaks. Woolworths used to make a loss every year except for Q4, when they had a massive final surge. So it is our responsibility to lay our stall out very clearly and very early, so we can pull in a lot of that Christmas spend. This year is the step change year.