FEATURE: Have the supermarkets failed in pre-owned?

Last year, Argos, Asda and Tesco made headlines by accepting trade-ins.

For years, second-hand was the domain of the specialists – GAME’s way of coping with the aggressive pricing of online retailers and those pesky grocers.Suddenly this was under attack. Tesco would accept used games in its Extra stores, Asda rolled out ‘Buy, Play, Trade’ in 234 outlets, while Argos customers could check prices online.

Yet in the months that followed, these pre-owned offers have floundered. MCV has received numerous complaints from customers who have been unable to trade their games in because of unwilling staff. One dumbfounded consumer even told us of how he was questioned by security for bringing in a bag of games.It doesn’t sound like specialist retailers have much to worry about.

SPECIALIST?POWER

If you look at our pre-owned business over the first six months of the year compared to last year, it is broadly the same size,” GAME CEO Ian Shepherd tells MCV.

That’s even as we have seen the rest of the market go down, so pre-owned as a proportion of our business has increased to just over 30 per cent for the first six months of this year. And that’s despite the noise from the competition.

A measure of just how resilient our pre-owned business is that the margin has gone up during the first six months. And that tells you it is very difficult to do trade-in well. We have been doing it for a long time, and we have a lot of skills and expertise.”

But this doesn’t mean the generalists have had no effect on the pre-owned sector, as the editor of used game bible Game Guide,

Chris Ratcliff explains: Non-specialist activity in the used games market has had an impact, if only to publicise the culture of trading-in games.There is a general atmosphere that this experiment has faltered and watching the supermarkets over the last 12 months, I get the impression that their foray into used games was more about the headlines than the service.”

NOT GIVING UP

Earlier this year Tesco admitted to MCV that its pre-owned offer had yet to take off” and that it needed to improve the interaction between staff and the customer.

Asda says its main focus for now is on new games, but that pre-owned remains a small but important part of its business.Why have they found it so hard?

Poor databases, infrequent maintenance of used pricing and an absence of monitoring and comparing their trade-in and re-sale prices against a rapidly changing market,” lists Ratcliff.

Generally, supermarkets’ used games shelves are stale with haphazard pricing. I have seen used games up to twice the price of the new one on an adjacent shelf.”

So has this been one big failure for the generalists? No, at least the grocers don’t think so. In reality these retail giants have barely got started in pre-owned. Asda and Tesco both say the ability to trade-in is something customers want, and so they will offer it.There just needs to be a few changes if they want to compete with the specialists, Ratcliff adds.

With modern technology, centralised systems and good pricing information, non-specialist staff can easily update prices.I see no evidence of similar systems in use at supermarkets.”

It’s too early to dismiss the generalists’ push into pre-owned. The growth of supermarkets in games over the past two years only highlights what these talented teams can do given time.

But as it stands, GAME, HMV and indies have little to worry about.For the time being at least.