Capstone Project

Capstone Project

Introduction

GameStop is a global retail gaming and a trade-in destination for Xbox, PlayStation, consoles, and accessories. It offers its members PowerUp Rewards where its pro members have the freedom to spend their cash rewards on the trade-in destinations like; consoles, accessories, and collectibles. Additionally, the pro members in the GameStop are given free $10 as a sign-up gift monthly, which amounts to $60 annually. It should be noted that the GameStop PowerUp also rewards its Pro Members through a 2% cash back, i.e., an equivalent of 20 points for every dollar they spend (Anand & Pathak, 2022). Through the PowerUp, GameStop can personalize the customer e-mails and retail the products concerning their past purchases. And the data can then be used by other investors or businesses in the retail sector to figure out where to open new stores.

Moreover, the project helps consumers through the PowerUp reward programs. Customers can earn; two more points for every dollar spent during the purchase of the accessories and collectibles, 5 dollars monthly, which amounts to 60 dollars per year, and a reward certificate. They can also enjoy trade credits on different games and other accessories. They are given pro-only access to the complete offers and events and a complete subscription to GameInfomer (Anand & Pathak, 2022). The following are the importance of carrying out sales at GameStop. Firstly, it offers trade-in and loyalty programs to its customers unequaled by competitors. It also offers a strong brand image, enabling it to retain more loyal customers who get quality in return. In addition, the sales tactics used by GameStop involve investing in technology, exploiting its digital assets, technologizing operations, and modifying its product to include PC gaming, game tables, and mobile gaming products. Likewise, it has employed a competitive pricing method in its sales tactics. Where it strategically selects prices for goods or services concerning the competitor’s pricing in the market rather than solely basing prices on target profit margins.

Circle of life

The Circle of life program is outlined towards enticing customers to use GameStop as the basic service provider. This is realized by focusing on the trade-ins, used sales, pre-orders, and reward card subscriptions. Besides the new product purchases, the pre-order market strategy makes GameStop very profitable to the retailers. Additionally, when ranked among the majority of their business annually due to its contribution by greater margins to the company’s profits. Furthermore, due to the various percentage quotas expected by GameStop in its daily operations, it has made a requirement to its employees to try and push used and reservations on its customers. Even though the quotas are not imminent to change over time, the current figures are estimated at 10% for reservations, 35% for pre-owned sales, and 20% for trades. This implies that if GameStop averages $1,000 in its businesses monthly, it requires $100 in reserves, $350 in pre-owned sales, and $200 in trades to effectively achieve the quota for the program (Hasso et al., 2022).

Moreover, GameStop is facing one of the biggest issues on what to do next based on the above figures. Based on the Circle of life program, it is likely that the company’s images may be retooled. Hence, the stores should resort to underhanded tactics to eliminate these numbers through pressures to make up sales. Reducing the sales numbers may consequently lead to uneven pressure on the district managers and employees globally. However, the more complex issue that remains in the hands of the leadership or the district managers is the enforcement, use, and abuse of this circle of life program for the best interest of the entire organization.

Trade-in requirements

Trades must be in good condition for the customer to receive the product’s exact value of the product. Also,  the hardware must have all required components for trade, and trades carried out are subject to approval by the manager. GameStop holds the right to terminate participating in trades of any product without notice to the customers. Through trading in GameStop, the customer releases GameStop from any claim concerning the product, including and not limited to lost data stored on it. GameStop is also free from any assertion for unauthorized access, use, or disclosure of privacy or any other information stored on the device and that all trades are final. Furthermore, offers are only valid towards the items normally accepted in trade, and GameStop reserves the right to cancel, revoke, modify or apprehend the bid for any reason without notice. Lastly, the PowerUp Rewards for Pro members include 10% extra in-store credit and only apply when trading in games and accessories but do not apply to the trade of systems (Hasso et al., 2022).

A 5-dollar deposit is necessary for reservations to ensure the product is reserved for the customer in-store. The requested item is held until the end of the business day, depending on whether the order was placed during store hours. An e-mail is sent within 2 hours to the customer in case the order was placed during store hours. On the other hand, GameStop’s PowerUp Rewards program is a subscription-based service that entitles its customer’s certain benefits for advancing their membership. The Pro version of this program offers up to 150 benefits for just 14.99 US dollars annually (Hasso et al., 2022).

The following are the reservations, pre-owned sales, new sales, and trades in GameStop;

1. Reservations
2. Excite new customers about their latest releases and other exclusives
3. Talk-up trade incentives

• Provide special offers for PowerUp rewards to its customers

1. Use the GameInfomer to educate the customers about the latest releases
2. Pre-owned sales
3. The trade customers are expected to become the pre-owned buyers
4. The pre-owned product is of better quality and value to the customers

• Through the pre-owned products, the customers can receive double points as PowerUp rewards

1. Through the pre-owned products, the pro-members can receive 10% off as PowerUp rewards
2. New sales
3. Through the reservation, it serves as an incentive for new sales
4. It increases new market shares

• The pro-members get 10% off as PowerUp rewards on all the new purchases made.

1. The sales opportunities offer a platform to educate and push the DLC sales
2. Trades
3. Trades are the unique currency for GameStop
4. The trade-ins build the pre-owned stocks

• The pro-members get 10% off as PowerUp rewards on all the trades

1. The reservations offer trade benefits to the customers

Sales Pitch

This entails the salesperson attempting to convince the customers to purchase or believe in the product a particular organization is offering. The offer can be in the form of meeting with the customer or providing the required information about the product or service, for example, “Here’s the story. I recently moved to a new store, and the customer base differs slightly from the last stores I worked at. I’m heavily struggling with the Circle of life so much that I’m in trouble. What sales pitches do you guys use to help you along the way? I want to mix it up to improve this because what I’m saying isn’t working here. Help please”

Concerning the pro-card and its benefits to the customer, here is the best sales pitch to apply;

GameStop is a global retail gaming and a trade-in destination for Xbox, PlayStation, consoles, and accessories. It offers its members PowerUp Rewards, where the pro members have the freedom to spend their cash rewards on the trade-in destinations like; consoles, accessories, and collectibles. Additionally, the pro members in the GameStop are given free $10 as a sign-up gift monthly. This reward amounts to $60 annually and two more points on every dollar spent while purchasing the accessories and collectibles. Also, they are given 5 dollars monthly, which amounts to 60 per year together. You’re hearing directly from the user and engaging with people who use the product.”

Overcoming Objections

These concerns that prospective customer has concerning a product makes them falter and disregard an eCommerce purchase. The major concern to the customer is the lack of digitization of the GameStop products. The company is still selling physical video game discs in many of its stores worldwide despite the games going digital. Since the onset of the pandemic, the situation has been much worse as video game buyers have now resorted to digital downloads or buying the games online (Vasileiou et al., 2021). The other fundamental problem is the lack of transparency in the organization’s operations. The company revised its reporting mechanism last year, combining the two categories while dropping per-category total margin reporting overall. When an organization makes these changes in how it reports the results, you can comprehend that they are trying to hide something from its customers.

It is also worth noting that the pro-members of GameStop enjoy added benefits and access to the latest products. Pro Members in the GameStop enjoy the PowerUp Rewards. They can purchase PS5 bundles in their Stores and have early access to the XBXs, Pokémon cards, and morel. Moreover the pro members enjoy massive discounts on the Xbox, PlayStation, consoles, and accessories, i.e., 50% off the select titles and 10% off on different pre-owned games (Lyócsa et al., 2022). On the other hand, GameStop Pro Members have access to a two-day price at an exclusive discount on deals on consoles, video games, and other commodities from June 24 to 25. These days serve as Pro days implying that you’re a PowerUp Rewards Pro. You are entitled to receive exclusive deals no customer can access.

Closing Sales or Pass

By investing in technology, exploiting its digital assets, technologizing operations, and diversifying its product and gaming products, the customer can realize the value through the provision of quality. Likewise, the competitive pricing method through strategically selecting prices for goods or services concerning the competitor’s pricing in the market rather than solely basing prices on target profit margins boost the value of goods and better quality (Umar et al., 2021). The customer is encouraged to become pro members to enjoy the exclusive benefits annually, helping them save money.

Conclusion

This capstone project has examined GameStop as global retail gaming and a trade-in destination for Xbox, PlayStation, consoles, and other gaming accessories. It has also been clarified that it offers a PowerUp reward program to the pro members. They are given a free $10 sign-up gift, which amounts to $60 annually, and a 2% cashback. The reward is an equivalent of 20 points for every dollar they spend on the purchases. The GameStop Circle of life outlines the criteria for enticing customers to use GameStop as the basic service provider by focusing on the trade-ins, used sales, pre-orders, and reward card subscriptions. The Circle of life has also given us an overview of the reservations, pre-owned sales, new sales, and trades in GameStop. The reservations include; exciting new customers about their latest releases and other exclusives and the provision of special offers for PowerUp rewards to its customers.

In contrast, pre-owned sales offer better quality and value to the customers. The customers can receive double points as PowerUp rewards. On the other hand, new sales serve as an incentive, increase new market shares and allow pro-members to get 10% off as PowerUp rewards on all the new purchases made. In contrast, trade-ins offer GameStop unique currency and help build pre-owned stocks.

References

Anand, A., & Pathak, J. (2022). The role of Reddit in the GameStop short squeeze. Economics Letters, 211, 110249.

Hasso, T., Müller, D., Pelster, M., & Warkulat, S. (2022). Who participated in the GameStop frenzy? Evidence from brokerage accounts. Finance Research Letters, 45, 102140.

Vasileiou, E., Bartzou, E., & Tzanakis, P. (2021). Explaining Gamestop Short Squeeze using Ιntraday Data and Google Searches. Available at SSRN 3805630.

Lyócsa, Š. Baumöhl, E., & Výrost, T. (2022). YOLO trading: Riding with the herd during the GameStop episode. Finance Research Letters, 46, 102359.

The Horrid “Circle Of Life” Is Being Broken And Rebuilt At GameStop. (2017, February 25). [Photograph]. Bleeding Cool. https://bleedingcool.com/games/horrid-circle-life-finally-broken-gamestop/

Umar, Z., Gubareva, M., Yousaf, I., & Ali, S. (2021). A tale of company fundamentals vs. sentiment-driven pricing: The case of GameStop. Journal of Behavioral and Experimental Finance, 30, 100501.