GameStop powers up with Geeknet acquisition
Video game retailer GameStop has been lauded as a company that understands its customer base. Staffing stores with employees who are themselves gamers, the chain combines the sense of enthusiasm and curatorial spirit one gets at a mom-and-pop with the sort of data available to a sizeable chain with big technological resources.
One of the results of this model is the chain’s PowerUp loyalty program, which, in addition to sending customers hyper-targeted emails about new games, places a customer’s purchase history in the hands of an employee who can make recommendations on the information. Now GameStop is taking a step that may embed the retailer even further into both the lifestyles and shopping habits of its customers with the acquisition of Geeknet.
Geeknet, which has gone by different names and has been owned by different properties over the years (including such high-profile websites as techie-news site Slashdot and open source community SourceForge) is now exclusively the owner of ThinkGeek. ThinkGeek is a retail website that sells sci-fi/fantasy, gamer and comic book-related merchandise as well as electronics, gadgets and gadget accessories. Many of the products are tied to branded properties such as Star Wars, Dr. Who and Minecraft, though some products are of general nerdy interest, such as zombie coffee mugs and molds to make skull-shaped ice cubes.
It’s easy to see how products available from the ThinkGeek webstore could be a natural fit for the gamer crowd, given the cultural overlap between its clientele and video game fans. It’s also easy to see how data on ThinkGeek purchases could further inform both the selection and the way employees approach customers in GameStop brick-and-mortar stores.
The company already has a massive amount of information it uses to generate a "360-degree customer view." In a recent interview with BriefingsDirect, John Crossen, data warehouse lead at GameStop, said that the company has 24 terabytes of customer data.
"A lot of it is just based on determining who is likely to buy which series of games," said Crossen in the interview. "So you won’t market the next Call of Duty 3 or something like that to somebody who’s buying your children’s games. We are not going to ask people to buy Call of Duty 3, rather than My Little Pony 6."
Before the acquisition went through, GameStop was not the only company to express interest in Geeknet. Teen retailer Hot Topic had agreed to purchase Geeknet for $122 million but was outbid by GameStop, who bid $140 million.
- GameStop Completes Acquisition of Geeknet – MarketWatch
- GameStop gets personal with Millennials – RetailWire
- How big data powers GameStop to gain retail advantage and deep insights into its markets – IT-Director.com
- GameStop Agrees To Acquire Geeknet, Trumping Hot Topic – The Wall Street Journal (sub. required)
How can GameStop best capitalize on the data, audience and merchandise it now owns because of the Geeknet/ThinkGeek deal? Is there the possibility of brand dilution or other pitfalls stemming from taking on a property that is not primarily video game-centric?