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MCV 16/07/10 15 CONFERENCE REPORT
Sainsbury’s plans to open three ‘new format’ stores, a 100,000 sq ft outlet and 20 new sites in the next year – all with a full range of games products
THE KEY DRIVERS
In the last 12 months, Sainsbury’s games division has run a number of games promotions that have gained the firm more customers than ever. The offer of 20 per cent off Wii in the run-up to Christmas saw the firm shift 50,000 units in one week. Over the peak weeks leading up to the holidays, Sainsbury’s claimed a 30 per cent share of the console market. This was followed up by an Easter
promotion, offering 25 per cent off Wii and the format’s Top 10 games. Again, Sainsbury’s took 30 per cent of the Wii market over the Easter period, and gained another 18,000 new customers.
In terms of game releases, the
biggest was Modern Warfare 2. The supermarket drew thousands of gamers to its stores – thanks in no small part to the £26 price point. “We priced it very aggressively,”
says games manager Gurdeep Hunjan. “The important thing about this release for us is that it put Sainsbury’s and games on the map.” Games have also benefited from
Sainsbury’s Coupon at Till system. In the run-up to Assassin’s Creed II, a £3 coupon was given to anyone who had bought 360 and PS3 products. Says Hunjan: “The results were
great. We earned an average of 4.5 per cent market share in the first six weeks of the game being on sale.” The practice has also worked with
other releases since, giving the firm an eight per cent market share for Heavy Rainsales, seven per cent for Sonic & Sega All-Stars Racing, and 4.5 per cent for Splinter Cell.
It’s a level of theatre that the supermarket wants to employ more regularly, both for games and films, to make its offers stand out from those of its rivals and even specialist retailers. “With these launches, we managed to create a massive amount of theatre and some great POS,” says entertainment marketing manager Sheetal Meakin. “As a result, customers were really engaged by the activity and when we achieve that, we can help launch a product really well. Avatar in particular really did set a benchmark for how we can launch entertainment products.” Perhaps the supermarket’s boldest plans are online. Within the next three months, Sainsbury’s will announce an extensive expansion of its current online offering: a multichannel solution that will enable customers to shop through any internet-enabled device. Most interestingly, entertainment boss Richard Crampton reveals the grocer will even be entering digital distribution in the near future – something that will cover all forms of entertainment.
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“We need to make sure we can sell people things digitally, but we will do this through an integrated shopping basket so you will be able to buy physical and digital products together,” he says.
This is the deal: if you can help us make money on your products, we can offer you a lot of growth.
Luke Jensen, Sainsbury’s
“Customers either buy the CD or download it – it’s their choice, and that is the case with all formats. We’ve taken our time with this because we don’t want to launch something that doesn’t provide the right customer experience.”
PROMISE OF PROFIT With so much in the works, what is Sainsbury’s trying to achieve? The company will always be sticking to its roots as a supermarket but with more customers buying games, films and the like with their weekly groceries, it is determined to encourage these
unplanned sales through strategic product placement.
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“The biggest opportunity I see for us in entertainment is actually creating new opportunities,” says non-food managing director Luke Jensen. “For example, getting someone to walk out of the shop with a £3 CD they’re going to listen to on the way home. It’s something they wouldn’t have bought before. “It’s very important that we create that moment when
the customer wants to buy more.” Of course, Jensen is more than happy to have people queuing up at each of his stores for the next Call of Duty, and in this regard, he pledged to help publishers that delivered lucrative products. “This is the deal: If you can help us make a decent buck out of your products, we can offer you a lot of growth, much more than you’ll find elsewhere,” he says. “We’re a business with a very strong financial position so, unlike some other entertainment retailers, we’re not going to go bust any time soon. We’ve been in business for 140 years, and we certainly hope to be in business for another 140.”
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