INVENTORY

GameStop goes seamless with geeky ‘loot’

BY CSA STAFF

Even geeks appreciate the convenience and hands-on experience of visiting a physical store.

Recognizing the continuing popularity of brick-and-mortar, specialty video game retailer GameStop Corp. has been extending its pure-play ThinkGeek banner into physical stores. GameStop purchased ThinkGeek parent company GeekNet Inc. in 2015. ThinkGeek specializes in selling “loot,” or collectible items and memorabilia, rather than video games.

“We’re really expanding past selling licensed merchandise from video game intellectual property and more into TV show and pop culture items,” said Mike Mauler, executive VP and president of GameStop International, in an interview with Chain Store Age. “We placed licensed merchandise into all GameStop stores by the end of 2014, and earned more than $300 million from the category in 2015.”

As an initial step toward opening stores, GameStop integrated ThinkGeek customers into its PowerUp rewards program.

“By demographic and location, we could identify product preferences of online customers,” said Mauler. “We could also determine which GameStop stores sold the most loot.”

Armed with this information, and satisfied by the performance of 30 initial test “Zing Pop Culture” stores in Australia, GameStop went ahead with brick-and-mortar rollout in the U.S. Using demographic and sales data, the retailer determined which ThinkGeek stores should be located inside GameStop stores and which should be separate. The retailer also determined whether separate ThinkGeek stores would be better situated inside malls and shopping centers or as stand-alone units. The first U.S. ThinkGeek location opened at The Florida Mall in Orlando in September 2015.

“We opened a total of three new ThinkGeek stores in 2015 and all did well,” said Mauler. “So far we’ve opened another two this year, and will open a total of 25-50 in 2016.”

When it comes to distribution management, GameStop recognizes the importance of the e-commerce channel to the ThinkGeek customer base.

“We look at omnichannel the same as everybody else, from mobile to Web to the store,” said Mauler. “We allow pickup of online orders in-store and will ship to home. In many markets, buy online pickup in store represents 40%-50% of online sales. Having a physical presence is a big part of omnichannel.”

Since GameStop has already been operating a seamless fulfillment process for several years, Mauler said implementing the same approach for ThinkGeek was not a major challenge. Although ThinkGeek inventory is fulfilled from a separate warehouse, it uses the same in-house-developed ERP system and Manhattan Associates supply chain and warehouse management technology used by GameStop. The in-store POS system is also proprietary. Currently ThinkGeek online and in-store purchases can be returned at GameStop stores, but GameStop items cannot be returned at ThinkGeek locations.

Mauler sees a bright future for GameStop’s new geeky offshoot.

“Licensed merchandise is our fastest-growing category,” said Mauler. “It made $300 million last year, should make $450 million – $500 million this year, and reach $1 billion by 2019.”

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FINANCE

Deloitte: Retailers should catch early bird back-to-school shoppers

BY CSA STAFF

Hesitating to offer back-to-school deals could result in significant loss of potential sales.

According to the new Deloitte 2016 Back-to-School Survey of 1,200 parents with children in grades K-12, on average, parents will spend $488 for clothing, accessories, school supplies, computers and other electronics for their children this year. The survey also shows the earlier the shopper, the higher the budget. Respondents who said they plan to start shopping for back-to-school by the end of July are likely to spend 26% more than those who begin in August or later.

Retailers should also target back-to-school technology shoppers. Respondents shopping for technology-related items (29%) said they would spend an average of $456 on computers (including software, hardware and accessories), and $286 on gadgets like tablets, smartphones and wearables. Additionally, 31% say they are buying fewer traditional school supplies because their children are using more technology for school.

Roughly two-thirds of the budget for traditional categories like school supplies (66%) and clothing and accessories (63%) will be spent in-store, but back-to-school shopping is becoming increasingly seamless. The majority of shoppers (61%) say they’ll research online before making a purchase in a physical store. One-quarter (25%) of parents surveyed said they plan to use social media to assist with their shopping. However, the top reason to use social media is to find out about promotions (74%), followed by coupons (64%).

Forty percent of parents surveyed said they prefer to purchase from retailers that offer an option to buy online and pick up in store, and 30% think they’ll shop physical stores less this year because the option to buy online and pick up in store is more convenient. Free shipping continues to weigh heavily for online purchases, as 62% of respondents say they are more likely to buy from online retailers who offer free shipping.

Retailers should also keep in mind that 36% of respondents say the season is less important because they replenish school supplies throughout the year.

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ECOMMERCE

Analysis: Prime Day really was that good

BY CSA STAFF

Sequels are rarely better than the original, but the second annual Amazon Prime Day may deserve comparisons to “The Godfather Part II” and “The Empire Strikes Back.”

According to analysis of U.S. Amazon first-party and Marketplace sales from a daily panel of more than 4 million online shoppers from digital commerce research firm Slice Intelligence, sales on July 12, 2016 were up 50% from Amazon’s inaugural Prime Day. It was the biggest U.S. sales day ever, surpassing Cyber Monday 2015 (the previous high water mark) by 19%.

The average shopper spent $112 (up 9% from the previous year), with an average order size of $54 (down 2% from 2015). Amazon is already the dominant e-commerce player in the U.S., with 38% market share across the consumer e-commerce sector year-to-date. On Prime Day 2016, however, Amazon had 74% of all U.S. consumer e-commerce. This happened despite competitors’ efforts to offer their own concurrent online sales.

Amazon Prime Now, which offers a limited array of products to Amazon Prime members in select markets, was heavily promoted to those that lived in Prime Now markets on Prime Day, and analysis shows it paid off. Of all customers that placed a Prime Now order on Prime day, 31% were first-time Prime Now customers.

Other interesting data points include:

·Heavy Amazon shoppers who average more than four purchases per month with Amazon accounted for 50% of Prime Day buyers and 56% of sales, up respectively from 41% and 44% the prior year.

·New shoppers accounted for just 2% of sales in 2016, down from 3% in 2015.

·Despite large sales volumes, only 13.5% of Amazon shoppers shopped on Prime Day 2016, up from 11% in 2015.

·Prime Day represented 2% of year-to-date sales for Amazon.

According to Slice, competitors will never be able to generate their own substantial online sales boosts by individually competing with Prime Day. Instead, the firm advises other e-commerce retailers to consider creating a consortium-based approach (within the bounds of antitrust rules) to create their own joint sales holiday during the summer.

Not surprisingly, based on these figures Slice expects a strong holiday in 2016 from Amazon.

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