Tuesday, November 24, 2009

Let's improve the gaming business at Best Buy

There are a great many things that we do well in our video game department, but there are always opportunities in any area of our business for growth. In this update I am going to talk about a few of my ideas of how we can improve our gaming business to be a better experience for our customers as well as making the business more competitive and to be more profitable.

Midnight Release

Let’s start with Midnight Releases and the events that take place on those nights. Currently the number of stores participating is growing, but each store is really handling these midnight releases in their own way. This strategy needs to have some standardization either through a standard operating platform or a playbook if we are going to grow these events moving forward.

I suggest three different levels of Midnight release event. Level 1 would be very basic, for smaller releases or for stores that don’t have a large number of gamer-Employees. At this level only a skeleton crew would be in place to work the release. The store opens the doors at 12:01am and sells through copies of the game until the last customer is served.

At Level 2 we open the store at 10pm. We setup consoles for the customers to play the game that is coming out, with a line queue, and a 10 minute timer. We setup 4-8 consoles depending on the perceived amount of traffic, and allow the customers to play in a sort of “free play” arcade setting. This gives customers the ability to check out a game before the release, which gamers really enjoy. At 10 minutes to midnight we allow customers to begin to queue to purchase the game, and again we close the store after the last customer is served.

Level 3 is very similar to level 2: We open the store at 10 and setup consoles. The part where it becomes different is that in level 3 we host a tournament featuring the game that is being released. Gamers enjoy these tournaments for a few reasons such as playing the game early, competing against others, and the environment that is created while being around other people who share common interests. At my store (1123) we have hosted four midnight release tournaments this year: Madden 10, Halo 3:ODST, Transformers (movie) /w Guitar Hero tournament, and Call of Duty: Modern Warfare 2. The customer feedback that we have received thus far has been overwhelmingly positive. We have typically given away 2-4 games and a handful of gift cards during these tournaments. Free Stuff is always a good reward for our customers; it is another big way to win hearts and minds.

A quick note: During holiday hours this becomes a little tricky, luckily the last big games of the year typically are released in November, and perhaps we would have a rule where we only host level 1 midnight events during December due to labor constraints caused by extended hours and increased customer traffic during this time of year.

Another big part of this event is driving customer awareness. When polled for this last release most of the customers said that they found out about this through word of mouth. This is great news due to the limited number of times the average customer comes into our store or runs across our advertisement. The biggest thing that we did in our store was to generate our own advertising for these events. We created smaller flyers that could be stapled to receipts, we made 8.5x11” posters to display in the gaming department and at the doors, we rented a portable road side sign, we wrote on the windows of the store with chalk markers, placed a projector at the front lanes with a rolling “ad slide show”, and posted messages on local store Facebook page. If every store hosting a midnight release could do even half of these things, they will be able to inform customers around upcoming events. This coupled with better applications on BestBuy.com, a small blurb in the weekly ad, and perhaps a commercial on a network like G4TV could have a large impact.

Xbox Live

Xbox live is a large and growing network and can be a vehicle for many brands to get their Logos and more importantly their messages to customers. I feel that Best Buy could utilize many areas of Xbox Live to drive brand awareness for gamers, these areas include: Avatars, Napster, Shows, and Games.

For those of you who aren’t aware, Avatars are the Xbox live representation of the player. When you create an Avatar you are able to customize their physical features and their clothing. There is also a Marketplace where you are able to purchase different clothing from participating brands. At present companies like Penny Arcade, Adidas, and Skull Candy offer clothing for 80-240 Microsoft points the equivalent of $1-$3. There are also a selection of cloths and accessories from video game titles. By using this system, Best Buy could have a range of Best Buy branded attire like digital versions of our uniforms, or t-shirts with logos.

Napster is currently a great plus for us, but it is hard to compete directly against the iTunes juggernaut. By mimicking the Netflix and Last.fm applications that have been recently launched, we would be able to bring Napster to more homes and gain a better foothold. Also, Napster could be brought to the Playstation Network as well. This brings Napster to more homes, but it also helps our company build relationships with customers and with console manufacturers.

A long while ago I submitted an idea to the IdeaX site around creating a Web based TV show or podcast. Basically it would be a show where we take a look at new products while explaining its features and benefits and highlighting all of the reasons why Best Buy is the place to get it from due to our services, expertise, Geek Squad Black Tie, etc. If we made these available through the Zune Marketplace (Xbox Live Video Marketplace), we would be able to distribute these to more customers and again build a relationship in customers’ minds between Gaming and Best Buy.

Next let’s discuss game creating and distribution through Xbox Live. A few years ago Microsoft made it possible for the average person to create video games using XNA (http://creators.xna.com/en-US/). They allow for anyone over the age of 18 to submit games. This means that Best Buy could create a series of games and distribute them for a very small amount of capital. We already have a slew of programmers employed in programming roles along with hundreds if not thousands of employees at all levels of the company that can contribute with either programming, game design, level editing, or various art. Basically stated we could internally crowdsource the creation of games. The benefits of creating our own games, is that we can send a brand message or at least drive brand awareness. The other great thing that may happen is creating an icon that represents Best Buy in the gaming world, much the same way that Nintendo has Mario or Sega has Sonic.

Pro Gaming

Professional Gaming and gaming leagues represent a huge area opportunity for Best Buy. My strategy for gaining the most customers in gaming through this method starts with hosting local gaming leagues and national tournaments and ends with us supporting a hand full of professional gaming teams. This strategy also incorporates an idea I submitted to IdeaX around a Best Buy Gaming Lounge (http://bestbuyideax.com/ideas/1360).

The first part of this plan that to implement is the above gaming lounge idea. (Essentially a pay by the hour gaming network were we allow customers to play on a LAN.) Next, we create a local level league, in the same vein as Wizard of the Coast’s “Magic: The Gathering Arena” (http://www.wizards.com/Magic/Magazine/Article.aspx?x=events/magic/arena). Customers would pay a fee to join a one-two month league, where they are able to play against each other for points. The winner(s) receive(s) prizes at the end of the competition. The goal here is to give customers an experience they can’t get at other retailers along with maintaining a breakeven model with the network. With the proper amount of traffic these areas do have the potential to drive huge amounts of revenue after they reach the breakeven point.

Next, we use a national gaming tournament featuring three different games as a promotion to drive awareness of gaming at Best Buy and the Gaming Lounge concept, along with using it as a scouting tool to build our own gaming team(s). The national tournament would start out at the store level and move to a district level for the quarter finals, the semi finals and finals could be held in more central locations. Gaining vendor support from the companies that produced the games and from the consoles manufacturers among other advertisers is going to be the key to making these tournaments successful and provide a worthwhile ROI.

The final stage of this strategy revolves around sponsoring professional gaming leagues such as the MLG, along with sponsoring our own team(s) to compete in leagues like these. This strategy will give us more credibility among gamers. The better the role models of game feel about Best Buy, the more likely the gaming community will shop at our stores.

Digital Download Stations

Recently Sony Released the PSPgo a handheld gaming console that unlike most other video consoles because it lacks a way to access physical media. This means that games have to be downloaded from the Playstation network instead of being able to be purchased in a store. This means that customers have less reason to shop at our stores to supply games for their device. We do carry the cards so that a customer can purchase using a method other than a Credit Card, or for a gift purchase, but this is only a small solution to what will be a growing issue in the future.

When we look at the growth of downloaded music when driven by a force like iTunes, I feel that it is only a matter of time until other forms of entertainment start to go this way. Netflix, Blockbuster, CinemaNow, and eventually Hulu are streaming video content for a fee. Google, Sony, and Barnes and Noble are all offering digital copies of books for download. Sony and Microsoft are both offering digital versions of their games in a way that bypass the retail stores. The convenience that comes from being able to make purchases from home and have it delivered nearly instantly, is the most contagious part of the digital download model.

To help maintain traffic and to get ahead of the curve, I suggest installing digital download stations in the gaming department. Actually I recommend putting them all over the store for the gradual replacement of the Media department, but let’s focus on the future of gaming for now. Currently we have the Nintendo DS download play – stations in our stores (although most associates/customers don’t know they are there – better signage could help). These wireless servers allow for customers to bring their DS into our store and play a game while they are in the general vicinity of the server. I would suggest that we partner with Sony and Microsoft to create similar download stations for devices such as the PSPgo, and the Xbox 360.

This solution helps to maintain customer traffic, while at the same time providing a solution to customers who lack broadband internet access. If we can help with the development of the technology and make it a Best Buy exclusive (even if it is just for a limited time), it also becomes a competitive advantage for us, along with aiding in the preservation of the traffic driving model for retail.

Uniform adjustments

I know the Blue Shirt is an Iconic piece of Best Buy branding, and I want to ensure that everyone reading this knows that I understand the power of the Blue Shirt and what has gone into creating the brand. With that said, I think that we should modify the uniform in gaming while keeping a Blue Shirt as the underlying design. Either by adding patches to the uniform, similar the MECP certification that associates in CarFi wear or a total modification to a Blue T-shirt with vendor logos and product placement (similar to the GameStop uniform).

Patches would be a simple modification and we have the tools in place through learning lounge to certify associates in gaming. All it would take is a little extra vendor support and a change to sop. These patches would visually reinforce the certified expert message that we have been sending to customers for years, they would also help drive the individual employee towards learning more about the products they work around every day.

The more drastic change, a standard t-shirt, would be another great way to gain vendor support in gaming. By keeping the shirt blue we can maintain the brand, but by adding logos or products from the video game industry we can gain the perception of expert level knowledge. If someone is wearing an Xbox branded t-shirt, the average customer will likely assume that person to be an expert. Vendor support and perception of expertise are two reasons that GameStop uses this very tactic.

Used Games – Leverage Trade-in

As I mentioned in the previous blog, the best way for Best Buy to get into the used games market would be to purchase GameStop. Without doing this, the next best way that we can start gaining in this area is through our Trade-in Program. The current message in that I have seen broadcast around this program is that we have a trade-in program for old electronics, beyond that there isn’t much of a message, and the communication to the customer has been pretty lax. I would recommend adding more prominent signage in the participating departments (IE. Gaming, Digital Imaging, iPod/MP3, CarFi, PC) featuring different more targeted messages. In gaming for instance the targeted message would be, “Trade in your games and buy iPods, computers or nearly anything in the store, or trade in your other electronics for games – one store many options!” or something similar to that, with a different message in each department.

The trade-in program flyers are great, but it isn’t something that most customers will typically pick up on their own. Most customers tend to walk past sign holders without ever noticing what is in them. One behavior that store employees can do to drive awareness is to carry these flyers around and hand them to customers during interactions while talking about the program, customers respond well to this approach.

Win with Mom

One of the things I notice is that Moms buying video games will shop at places like Target first, and one of the reasons is that they are already shopping at those stores for their needs and the video games are typically for their kids. One of the big areas that we can win these customers over in video games is with our GSBTP and our coverage of ruined games. Protection is a huge advantage that most retailers do not offer, and gives great piece of mind when spending $40-60 on a new game. There are a lot of things that can be done to win these customers over and asking the customers is the easiest way to find out what the best and more important things to change would be.

Aggressive branding of Reward Zone Gamers Club

Reward Zone Gamers Club is a great new brand for our gaming department. By creating a brand like this we have set ourselves apart from many of our competitors, but do our customers know about the benefits? The next part of driving this brand is to get aggressive with the marketing. As I suggested earlier we could use patches or even pins on the Blue Shirt. We could and should increase the amount of in department signage and in store demos that mention Gamers Club. Our midnight releases should also be branded with the Gamer Club logo and brand messages, this should be included in any advertising that we do along with any collateral that we hand to customers on and around those nights.

Building Gamers Club into a strong brand is a great way to set ourselves apart from stores like Wal-Mart and Target. Now would be a great time to start advertising the benefits of gamers club to Moms in the forms of media that they are likely to read, watch, and listen.

Customers with Gamers Club should get a new Reward Zone card that indicates that they are a part of Gamers Club. These new cards should also list the features in shortened bullet point form on the front and back of the card. This way more customers understand the benefits and how it works.

Lan Party Setup – a new Geek Squad Service

A service I feel that we should offer revolves around the LAN party experience. This is an experience that companies have tried to duplicate with varying success through initiatives such as: Xbox Live, Playstation network, Sega Meganet, etc. The face to face interaction is one thing that can’t be duplicated. This is why people still come together to play under one roof. With this said, I propose that Geek Squad should have a temporary network setup sku for setting up a LAN. While this would allow us to support more customer needs it would also allow for our Blue Shirts to be able to inspire gaming customers with the art of possibility around doing this for them.

Gaming Optimization – a new Geek Squad Service

Another service that should be implemented to drive gaming awareness and customer loyalty is an individual game optimization for the PC. This would involve optimizing the computer and the game settings to perform at the optimum level, given the customer the very best experience along with allowing them to play with a competitive advantage over others who installed the game without optimizing.

This idea does take a special type of agent, one that is a PC gamer and understands how to properly determine the best setup for a game given the PC the client is using. I would recommend starting this service supporting only a handful of games at first, the first game being World of Warcraft – due to the number of players and the number of agents/BBY employees that already play this game. Along with the competitive nature of the game, these factors make it a great choice.

No comments:

Post a Comment