BATTLE ON THE HIGH STREET
games, trading-in, watching trailers and rating their favourite titles. “A lot of people are complaining about the market, we are not,” says Blockbuster’s UK commercial director Gerry Butler. “We have been in the games business for a long time, just as GAME has. It is unfortunate when any retailer loses stores. But we have picked up a fair increase in business because, as I said earlier, in some cases we are the only games specialist in a town. The situation with GAME has brought to our attention a lot of opportunities that, because we don’t just sell games, we have missed. Hence there has been a much greater focus on the whole gaming proposition. “If you think of the advantages that Blockbuster has, we have a lot of stores, a very big online community, we open late, seven days a week. And we offer new games at competitive prices, we offer used games, we offer rental – try before you buy. We are the only retailer in the UK that offers a total solution for the gaming community.
“The publishers see us now. There are a lot of High Street stores and multiples out there selling lots of games, but I don’t think there’s any out there communicating with customers in the way that we do.”
SHORT-TERM GAME PLAN There is a third competitor vying for GAME’s market share and that’s GAME itself. Many of those closed 277 were secondary sites in towns that GAME still operate in. And new CEO Martyn Gibbs and his team will be working hard to ensure those ‘lost’ customers migrate to the other store down the road. Yet a wider concern is that surely Blockbuster and HMV’s market share grab is nothing more than a short-term solution? The fall of GAME may help HMV pocket £10m in profit this year, but what about the fact that consumers are no- longer reliant on the High Street for their entertainment? “We are trying to plot a strategy for the next five to ten years, not for the next five to ten months,” defends Fox.
WHO WILL BENEFIT FROM GAME CLOSURES?
OTHER LOCATIONS WHERE GAME SHOPPERS SPEND THEIR MONEY (Data from before GAME entered administration) GAME shoppers 22.1%
HIGH STREET
2.4% 0.9%
HMV 18.9% 16.4% BLOCKBUSTER TOYS R US
2.3% 0.8%
INTERNET 37.5% 7.2% 41.8%
AMAZON 29.9% 33.8% PLAY 7.6% CATALOGUE
ARGOS 6.9% GROCERY 33.2%
5.0%
8.1% 7.2% 7.0%
31.5%
ASDA 10.2% 10.0% TESCO 14.1% 13.3% SAINSBURY’S
MORRISONS 3.7%
4.9% 3.3%
DEMOGRAPHIC COMPARISON BY RETAILER Total GAME HMV Blockbuster Grocers Market shoppers 7.7%
Children (Under 18) Students
7.7% 7.2% 13.1% 4.1% 8.4% 14.5% 14.6% 7.8%
Families 35.1% 36.9% 29% 44.2% Younger Singles (<45) 16.1% Older Singles (45+)
15.3% 24.4% 14.1% 3.4% 4.2%
4.7%
Younger Couples (<45) 11.7% Older Couples (45+)
www.mcvuk.com 12.2%
12.6% 12.3% 12.2% 9.6% 8.2%
8.5% 8% 7.7%
41.6% 13.9% 3.5%
10.9% 14.4%
GAME shoppers are closely aligned to the market average demographic.
HMV’s shares a similar demographic of customer to GAME, although it appeals to a larger proportion of people aged under 45. HMV is also likely to pick up some of GAME’s childrens audience. Blockbuster and the grocers perform better on spend from families and may therefore be better positioned to benefit from these shoppers who have moved over from the closed GAME and Gamestation stores.
May 18th 2012 15 “
Average buyer 19.6%
We’ve picked up a lot of business owing to the GAME crisis, and in some towns we’re now the only games retailer on the High Street. Gerry Butler, Blockbuster
“How customers are changing, how they are buying games, how they are being influenced by social media, is at the heart of our thinking. There is absolutely no- doubt that the stores will change, the relationship between physical and digital will change. It is not something I can update you about today, but if you are asking a broad question: are we are thinking a lot about it? Then yeah, definitely, we are thinking a real lot about it. “We are certainly not sticking our heads in the sand and thinking that in ten years time that the packaged media market won’t have changed. It will have changed massively and the role of the store would have changed massively. But broadly, we think that there is a role on the High Street for entertainment, but what we do and sell in store will be different, very different.”
Butler concludes: “I am sitting on 4.2m customers. Publishers want our customers and we want their content. We have to come up with a mechanism that works for everybody.”
RESEARCH FROM
ACCORDING TO Kantar World Panel, it’s a touch too early to tell who will be the main beneficiary of GAME closures. Although the firm says that ‘initial results do show HMV benefitting more than we would expect based solely on their market share.’ Based on research from before GAME and Gamestation stores closed, GAME buyers have an affinity to bricks and mortar outlets, having spent more money on the High Street and in supermarkets than the average games customer (this is after GAME spend has been factored out).
Just over 22 per cent of GAME customers spent money at other
High Street stores, compared to 19.6 per cent for the average buyer. Meanwhile, GAME customers spent less money online than the average buyer.
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