GameStop moving beyond games, preparing for the future
CEO Paul Raines says company looking to markets like the Apple ecosystem and the wireless field for growth opportunities as part of "GameStop 3.0" initiative.
GameStop may be most commonly associated with video games, but it may not always be that way. During GameStop's Investor Day 2014 event this week, the retailer spoke at length about the next evolution of the retailer, which it is calling "GameStop 3.0."
Games are already big business for GameStop, and CEO Paul Raines said this sector is expected to grow on the backs of the Xbox One, PlayStation 4, and Wii U. But at the same time, the retailer is setting its sights on much larger markets. Some of the "addressable markets" that GameStop is eyeing for future growth (in addition to physical and digital games) Raines said, are the recommerce market for non-gaming tech devices, the "Apple ecosystem," and the biggest of them all, the wireless market.
GameStop is already invested in the Apple ecosystem in that it buys, sells, and accepts trades for various iOS devices at its stores. The company also owns Simply Mac, a sales and service specialist. Raines went on to say that it plans to expand the Simply Mac brand, and with the blessing of Apple to boot.
"We have spent a lot of time in Cupertino with Apple leadership and we have their support to grow Simply Mac," Raines said.
"Connected devices are forecast to go from $8 billion today to $50 billion in five years...the wireless growth opportunity for GameStop is only beginning" --GameStop CEO Paul Raines
Concerning the wireless market, GameStop owns AT&T specialist Spring Mobile, and it also operates numerous Cricket Wireless stores in the United States. Raines boasted that GameStop is in fact the third largest AT&T dealer in the US.
The "wireless market is perhaps the most exciting market in the consumer space," Raines said. He went on to note that, "connected devices are forecast to go from $8 billion today to $50 billion in five years. And many will be sold in a store and available for trade and refurbishment at GameStop. The wireless growth opportunity for GameStop is only beginning."
Raines added that GameStop's all-important buy/sell/trade model can apply to all of these new markets.
Also during the presentation, Raines said the GameStop executive team has looked at other businesses that have moved into new markets to help it understand how best to do the same. He said cookware retailer Williams-Sonoma is a good example, as it successfully acquired Pottery Barn in 1986, and launched Pottery Barn Kids in 1999 and furniture store West Elm in 2003.
Raines also called out VF Corporation, which began as an underwear company before taking on brands like Lee, Jansport, Timberland, and Wrangler, among others.
Somewhat interestingly, a slide on Raines' presentation pointed out that VF Corporation later sold its original underwear brand to Fruit of the Loom in 2007. It's too early to say if GameStop will eventually get out of gaming altogether, but it's clear that GameStop is attempting to diversify its portfolio so that if such a day comes, the company will not only survive, but thrive.
"So we are students of extraordinary business transformation stories. Williams Sonoma and VF are great examples to us of the potential of understanding your consumers and matching that insight to your own core competencies."
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