Virtual wallet and digital focus aiding Game's sales recovery

Video games retailer Game Digital this week reported a year-on-year sales increase of 30% for the 12 months ending 26 July – and the company's CEO Martyn Gibbs has attributed much of the business's growth to its new digital initiatives.

Changes have been made to the retailer's website, mobile platforms and loyalty scheme over the last year, all of which have seemingly contributed to an upturn in the business's fortunes.

The company returned to the stock market in June after a turbulent period that saw the business, previously known as Game Group, fall into administration in April 2012 but then re-launch with a new name and refreshed omnichannel purpose.

Under the ownership of private equity firm OpCapita and the new management team led by Gibbs, Game has invested in digital by improving its in-store experience, websites and mobile app – most recently adding a new mobile 'wallet' payment mechanism designed to improve transactions.

Matt Rubin, retail analyst at Verdict Research, told Essential Retail: "Game has made great progress since it came out of administration, in particular its online and digital initiatives have helped the retailer to maximise the potential from the latest game console releases.

"Having a strong mobile platform and driving its omnichannel capabilities is very important."

The Game Wallet, which launched in June, can be used by customers to make purchases in-store. Users can open their smartphone app and select the 'make purchase' option, which creates a QR code that can be scanned at the point of sale. The service is linked to customers' individual Game accounts and allows them to use their mobile device to redeem loyalty scheme points and gift cards.

Future developments in the pipeline will allow customers to use the wallet to make online purchases on the Game website, add credit directly to the wallet in-store or online, and use it to make in-game purchases with selected third-party publishers.

Rubin remarked: "Expectations of the Game Wallet shouldn't be overstated by likening it to similarly named services. It is not a wallet payment system like that being offered by Google and PayPal, which are retailer agnostic and have significant potential for growth across all retail sectors.

"The Game Wallet makes paying for Game products much easier and makes its reward points offer more visible. This will help to encourage return custom, impulse purchasing and nicely integrates the credit shoppers get from trade-ins."

During the last financial year, one million new customers signed up to Game's reward card programmes, bringing the total membership across the UK and Spain – its two key markets – to over 16 million.

Significant investment has been made in developing the business's CRM infrastructure and expertise, which senior management want to use to provide a more personalised marketing approach.

Following administration, the retailer is also now operating a more streamlined property portfolio of 560 stores across the UK and Spain, which is down from the 874 stores it had at the beginning of January 2012.

Commenting on the year-end trading update, CEO Gibbs said: "Our consistent focus on improving the group's specialist customer proposition has delivered a strong performance and positions the business well for the future," Gibbs explained in a year-end trading update.

"We have great new physical and digital games being launched in the coming months and are working closely with our supplier partners to provide early trials, exclusives, deals and new and exciting ways to pay for all our gaming communities around the UK and Spain."

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Game Wallet

Verdict Retail