An Innovation Story: GameStop's Evolution Toward Disintermediation
Categories: News, Rumors, Gossip, & Trends Innovation Discussion Future Trends New Products, Services, and Business Models Disintermediation
Blockbuster and Netflix. Travel Agencies and kayak.com. Insurance and esurance.
These are all examples of disintermediation. Brick and mortar operations are either looking to the future to innovate—or they’re going extinct. So how can companies cross the divide between analog and digital?
Chris Petrovic SVP & GM, Digital Ventures at GameStop, talked with us about how they’re innovating to maintain relevance, and provided us with insight that is applicable to parallel industries facing this digital challenge. For Chris, the gap between brick and mortar and dot com doesn’t look so wide when a company can “create a differentiated experience while translating [the companies] core expertise into the digital realm.”
No other example demonstrates this better than GameStop’s launch of Modern Warfare 2, the game that in the first 24 hours of its release sold 4.7 million units, or 310 million dollars in the US, Canada and the UK. By working with publishers, GameStop was able to pull off the first ever, nationwide midnight game launch—in effect, they made it an event. At GameStop locations around the nation, doors opened at 9:00 PM where gamers could actually play the game before it was released. Throw in trivia contests, camouflage face painting, food, a DJ and soda—and you have a very unique, consumer driven offering that differentiates the brand and even the product from the competition. So what does digital have to do with it? Well first of all, the Internet buzz was palpable. But more importantly, it’s about consumer insight.
Gaming consumers are inundated with a wide range of content to choose from. Not only are there numerous games and consoles, but there is, more importantly, a vast selection of digital add-on content that can be purchased to enhance the gaming experience. And the problem? Whether they’re searching via iPhone or PC, consumers have a hard time finding what they want. The shear volume of content is too difficult to merchandise—and that makes it very difficult to sift through.
But that’s where the digital side of GameStop comes in. Specialized in gaming content inside and out, GameStop sales associates become the experts—and they become the chief aggregators of video, reviews, games and products. And the effect?
GameStop is effectually converting their brand equity from store to site. The expert who can help a consumer find what they need, recommend what they don’t know they need and then lead them to a sale—digital or otherwise—is of value to the gaming consumer. And, GameStop is translating that core expertise into the digital realm, step by step. So what’s the step after that?
Products, services and social offerings that capitalize on the reputation and gaming knowledge that GameStop has built up through their brick and mortar locations.
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