GameStop Brand LoyaltyThe rate of rapid technological change and seismic shifts in consumer behavior has become a customer engagement challenge for all brands. But some have experienced more difficulties than others. The music and movie rental businesses stand as cautionary examples of those struggling with this digital disruption. And because of some similarities to these entertainment industries, it might be tempting to add GameStop to the list as well.

GameStop, however, is unique. As a specialty multichannel video game and electronics retailer, GameStop supports a thriving community of loyal customers and brand advocates. Recently, Loyalty360 spoke with Frank Hamlin, GameStop CMO, about how the brand is finding new levels of success in such a challenging marketing environment.

Most brands are really struggling to listen to their customers, but GameStop seems to be doing this very well. How do you accomplish this?

Hamlin: We are in a business that, frankly, there is a huge portion of people that believes we are destined for demise in the next two or three years. And because of that, I think there is an organization-wide level of attentiveness to the attitudes of our core customers, particularly as it relates to console gaming. So as a result, we have to keep our ear to the ground.

Through the power of our rewards program, we are tracking 75% of our sales and, through that, we have a strong electronic relationship with most customers. Those relationships allow us to quickly pull together true quantitative studies around distinct characteristics as they relate to attitudes around the pre-owned and trade business and attitudes around reservations, which is very much the heartbeat around new sales and the health of the industry.GameStop loyal customers

When people say your demise is only two years away, it sounds like you are almost trying to be a disruptor in the industry.

Hamlin: We have the data to factually know that that is an incorrect assumption. The smart money always wants to use the metaphor of the music business or the book business or the movie business as an analogy for what’s happening in video gaming, but it is certainly not apples to apples. They are very different. The majority of sales are still physical. And I think a lot of people haven’t really focused on that. So there is definitely ongoing and substantial business to be had in physical sales in these digital media businesses. So, yes, it is kind of an underdog mentality. We are proving you wrong.

What are the differences in the gaming community? Are people loyal to the products, or how is that unique?

Hamlin: There are differences, both functionally and structurally. The first thing you have to realize is that these digital ecosystems, with regards to iTunes or Google Play for example, exist on fairly low bandwidth file sizes. On the other hand, The Witcher came out this year, which is a very popular game, and that title digitally is 50 gigabytes. And downloading it, on average, would take about 12 hours. You also can’t stream a game like you can a movie.

The second thing is the console itself. When they came out, most of them were sold at 250 gigabytes. So at 50 gigabytes a game, you can only store five games before you have to make the tough decision of kicking one out to put a new one on. Finally, you are dealing with a customer base that has a high desire to have the product as a collectible. They want to show their friends that they have this game on the shelf. It’s the trophy value of it. So we see tons of that behavior. It’s a really interesting ecosystem.

Are most of the game associates pretty big gamers as well, and is that a prerequisite to being an employee?

Hamlin: This is one of the reasons why I love specialty retail. We sell to a category that attracts customers from a passion standpoint. And simply because of that, it attracts associates who are passionate about the category as well. It’s not necessarily a prerequisite, but the self-selection of it makes it work out that way. That, in and of itself, creates a community and that is a big strength. Our stores create a place where people can react in a real human way with each other, with other people who are passionate about the same thing. You can do it online, but if you actually want to talk human to human about gaming, there aren’t many third places to go do that. And GameStop is that.

What about brands that don’t have that passionate fan base? How can you create a similar community?

Hamlin: I think you can do it. It’s harder. Don’t get me wrong. But I think you still need to play to the emotional aspects of whatever it is, whatever product it is. If you can do that in a remarkably efficient and high-value way, and really play that up, almost anything can potentially become a passion category. Trader Joe’s is a great example. Grocery is a mundane category, but by remaining very true to themselves, and with some private labeling and through a smaller more convenient shopping experience, they have created some passionate fans. I think you can create the same passion. It goes back to not trying to be all things to everybody. It’s about remaining true to a belief.

About the Author: Mark Johnson

Mark is CEO & CMO of Loyalty360. He has significant experience in selling, designing and administering prepaid, loyalty/CRM programs, as well as data-driven marketing communication programs.

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