Effectively leveraging customer insights usually leads marketers down the path toward brand loyalty. Transitioning more toward a digital business in this day and age of seemingly omnipresent mobile connectivity is also a key ingredient in the recipe for success.
GameStop has shown itself to be a proven leader in these areas.
During GameStop’s recent third-quarter earnings conference call, CEO Paul Raines said the company has prepared for “this digital migration through an innovative diversification of our business and a full half of our profit came from these new ventures in this last quarter.”
GameStop’s digital business grew 13.2 percent, powered by its mobile segment, including Animation Throwdown.
“We are cautiously optimistic about the future of video gaming,” Raines said. “The arrival of virtual reality in larger qualities creates an opportunity for us. In Nintendo Switch, which I played at Nintendo a few weeks ago, we believe could be another game-changer that will expand the audience for gaming and the new PlayStation and Microsoft Scorpio consoles will also provide innovation to the category. Our digital business will continue as we ride the growth of DLC, gaming currency, Indi titles, and our Kongregate mobile game publisher. The collectible business is big and getting bigger. Managing the fast growth of the category with the variety of omnichannel and standalone formats we used for distribution is complex, but it’s in our wheelhouse. We saw strong growth in the early days of video games, so we are prepared for it on the collectible side.”
What’s more, Raines said the foundation for all the company’s businesses is its PowerUp Rewards program.
“At roughly 50 million members worldwide, the CRM program brings us many advantages,” he said. “First, it brings us deep consumer insights as we execute weekly and monthly consumer survey panel to understand their behavior in gaming, collectibles, mobile, and other products. As an example, we discovered through our PowerUp Rewards catalog that our gaming consumers really like the ThinkGeek items for the use of their points, which led us, ultimately, to the acquisition of that innovative website called ThinkGeek.com.”
Another advantage, he added, is that company officials can pinpoint specific collectible items consumers want.
“PowerUp also allows us to have tailored communication directly with members via email or their PowerUp phone app,” Raines added.
Doug Sutherland, loyalty specialist, Dynamics, told Loyalty360 that he is very impressed by GameStop’s ability to layer loyalty over its superior brand experience.
“GameStop continues to lead its industry and the brand continues to evolve positively, appealing to a demographic that ages with the company,” Sutherland explained. “Many of today’s more successful loyalty mechanics have evolved from the original game mechanics, including achievements, tiers, points, and community. It makes perfect sense then that by combining the ideals of loyalty with its knowledge of game mechanics, the PowerUp Rewards program has grown to 50 million members, with both a basic program and a pro membership (where a nominal $15 annual cost more than doubles a member’s reward potential).”
GameStop has focused on redemption models that appeal directly to its loyal customer base, with the more traditional online catalog, Sutherland noted.
“The loyalty team at GameStop will have to keep these rewards from getting stale over time, which can be a difficult challenge when marketing dollars get constricted,” Sutherland explained. “That said, today the catalog is highly tailored to its ideal client, with gaming gear and collectibles, along with gift cards. This is an industry that evolves very quickly. The deep consumer insights from this program, undoubtedly, help make business decisions. Perhaps the best reflection of mining program data led GameStop to appreciate its members’ desire for ThinkGeek products, such that when ThinkGeek was open to being acquired last July, GameStop worked hard to acquire its rewards partner!”