GameStop goes seamless with geeky ‘loot’

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.”