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March 2017 Retro Gaming Article


March 26, 2017 Retro Gaming Blog Post:

GameStop store closings signal change, but not the grand demise exaggerated by many articles

GameStop announces store closings
Recent articles are claiming numerous failings within the gaming industry are tied to GameStop's brick & mortar decision.
I had little interest in writing anything about GameStop's recent announcement to close about 150 stores. It seemed pretty trivial with the flux in the gaming industry and GameStop's dabbling in Think Geek product lines.

Then I began to see the articles stack up on social media attributing these store closings to all sorts of minor incidents from a single AAA game that didn't meet sales expectations to rough holiday competition from competitors. Wow- that must have been a tremendos AAA game, right? And are Best Buy and WalMart's Game Center really the cause behind 150 GameStop store closings? These stories are such garbage and hone in on footnotes without looking at the lager retail scene.

While GameStop is quite unique in primarily being a "video game store", they are also a retailer with many similarities to the other stores at the mall. When a holiday shopping season harms a store like Macy's, this also will effect GameStop - even if the latest FPS game is selling like gangbusters. But a lousy selling season is not the primary cause behind the many closings we've heard about from a variety of big stores.

Let's look at what GameStop recently announced. I've read varying numbers, but 150 store closings is in the average of published figures. This only represents 2% of their 7500 global locations. In my travels, I've found many GameStop locations just a couple miles apart, which suggests they may have some redundancy to account for as well. The bottom line is GameStop is not making a huge change, although that is how it's being reported.

Sears lack of inventory

Outdated Retail Experiences

Have you been in a Sears or Kmart lately? My Kmart looks like a relic of the late 1960s. I like Sears very much, for some items, but it too badly shows it's age and simply looks outdated. Recent articles have reported on closings by Sears, Kmart, Macys, JC Penny, and others.

While GameStop may be having gaming issues, I can't help but wonder if their existence in the same retail landscape as these faltering giants is causal. I think some overall changes in consumer behavior are effecting GameStop as well as many other retailers. Further, I doubt the bulk of GameStop's problems are specific to Gaming. Malls are no longer the destinations they once were. I've even seen stories about mall owners abandoning malls as a loss against the money needed to make them relevant.

Although I don't consider GameStop to be very old when considering the large outdated department stores, many GameStop locations are still holdovers from former Electronics Boutique, Babbages, and Funcoland stores. Many of those stores were adequate in their time, but I've visited many GameStops that feel like walking into a small closet, not a real store. My local GameStop is tiny and fails badly at displaying the games they have for the myriad of currently sold console games. Then there's the Think Geek stuff further clogging movement around the retail floor.

Vacancies and Anchor Stores

For the last ten years, I've seen many store closings at my local mall. I live in a remote area without a WalMart and Target in every town. Our mall isn't as robust as the massive Galaria-style malls dotting the country. Still, there have been the occasional closings where a festively adorned construction wall appears for two weeks while a new store customizes their new retail space.

These days, those walls go up and seem nearly permanent. There are no new tenants coming in to impress us with their wares. Existing stores are beginning to buy "advertising space" in these vacant stores. Elaborate window displays are appearing in the vacant store windows directing shoppers to their physical locations in other wings of the mall.

JC Penny store closing Does the concept of an "anchor store" even exist at this point? Sears, JC Penny, or Macys were once thought to be the main consumer draw that brought customers to the other smaller stores trying to thrive. For me, these stores have never been the reason I go to the mall, but I'm seeing fewer consumers flocking to the parking lots by these stores.

At my local mall, I often park by the entrance to Sears because there's always plenty of parking there. Interestingly, this entrance is next to both Chillis and Five Guys burgers - neither of which are in (or near) the traditional food court. The food court currently has 2 empty spaces that have been vacant for over a year. Times are changing!

Increasing Online Sales Are Not The Culprit

Many folks blame online shopping for decimating the brick & mortar scene. While online shopping is growing, it's far from damaging the selling power that still happens at registers across the lands. The increase in online figures doesn't come close to accounting for the drops in brick & mortar locations. Are people shopping less? Are we using old metrics to gauge their habits? something is off, because there area lot of shoppers who's buying habits are quite mysterious - they've dropped off the map.

Amazon brick and mortar store Regarding relevancy, when was the last time you saw something innovative at a major retailer? My answer is never. Sure, Best Buy had a 1-day PSVR demo and Toys R Us has a swanky Nintendo Switch kiosk, but the mall experience is identical to what it was 30+ years ago.

Stores may have come and gone, but the experience of shopping at the mall hasn't changed much at all. The biggest change I've seen is the elimination of the arcades. The one thing focused on "fun" is nearly extinct in malls!

Reinvent The Traditional Purpose Of Retail Stores

Best Buy has done a good job of retaining sales in-store that often go to other online retailers. Lots of folks will visit a retailer to touch and poke a product before buying it cheaper online from another source. But if you think Best Buy is here to stay, tell me the last time you shopped at Circuit City or Nobody Beats The Wiz. The sad truth seems to be - innovation and change are cost prohibitive. Why else do retail giants languish in their outdated models? That's why it's cheaper for a new company with a bold new idea to come to market than an aging establishment to make significant changes.

What if we didn't go to the mall to buy stuff? Sounds odd, I know, but I've seen a few interesting articles on the notion that brick and mortar "stores" need to find new purpose and drive their own online sales. Some are suggesting that traditional stores become destinations for those seeking experiences, not just retail spending.

Best Buy might offer tech demos to stimulate specific sales. Macy's might have a fragrance event. Wouldn't you rather visit GameStop to participate in a video game tournament, than sifting through the same old games? Stores are viewed as places that take your money in an inconvenient and dull setting. Retailers need to change the purpose of their stores and make them engaging destinations for both planned and impromptu events. Let's not turn the mall into a circus, but pretty close. Give consumers a real reason to come to your store!

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