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Retailers seize chances to test different formats

Sun., Dec. 9, 2012

Ryan Hunt looks at products at GameStop Kids in White Marsh, Md. The video game vendor is experimenting with temporary stores for the holiday season that features kid-friendly video games.
Ryan Hunt looks at products at GameStop Kids in White Marsh, Md. The video game vendor is experimenting with temporary stores for the holiday season that features kid-friendly video games.

At GameStop Kids, shoppers might find plush “Super Mario” book bags and “Angry Birds” hats mixed in with the “Lego Star Wars” and other kid-friendly video games, a mix meant to attract both serious gamers as well as those who have never played but want some gift-giving advice.

That’s by design, said executives of the video game chain, which is testing out the new, kid-focused format as a way to appeal to new crowds of shoppers during the busiest time of year.

“Our business grows exponentially during the holiday season,” said Bob Puzon, Game Stop’s executive vice president of merchandising. “We just thought about some of the business and opportunities we could expand upon. There’s just an opportunity with a kids environment. We’re trying to take care of the consumers who thought (GameStop) was only for hard-core gamers with more kids’ products.”

Retailers striving to remain relevant are experimenting with new concepts this holiday selling season. Specialty retailers such as Game Stop are opening even more specialized stores, targeting specific segments of shoppers. Online-only sellers are opening brick-and-mortar locations – both temporary and permanent. And big-box retailers such as Target, Best Buy and Toys R Us continue to pursue small-footprint formats that can fit in mall or urban settings.

The holidays are prime-time for retail testing because more people are shopping and willing to check out new outlets for gift-giving ideas.

Consumers can expect to see more of such trends, said Alden Lury, a retail strategist with Kurt Salmon Associates in New York.

“When looking across all segments, retailers of all types are focused on more closely connecting with their customers, and that has a lot to do with testing new store formats,” Lury said.

The goal, he said, is to create “more compelling store experience for the customers.”

While the recession has driven some retailers to find ways to reinvent themselves, “a big piece of it is the change in the way customers shop,” said Mike Gatti, a senior vice president of the National Retail Federation.

“With mobile devices and more online shopping happening, retailers are looking at how do they utilize their stores the best way they can,” Gatti said. “Is my store the right size? And would it do better with smaller stores? Another piece is how do we differentiate ourselves so that we drive more traffic, bring more value to our customers and give them a better shopping experience.”

Companies that sell products mainly online or through other retailers have found that creating a branded, physical presence “is a way of creating a buzz, raising brand awareness, creating a connection with the consumer and giving their consumers and new consumers a chance to try out what they have to offer,” Lury said.

That was the idea behind 30 “pop-up” Microsoft stores. Microsoft had said it wants to give store customers hands-on experience with its products they might not get elsewhere. Kevin Turner, Microsoft’s chief operating officer, first announced the idea for the pop-ups earlier this year as a way to expand the company’s retail presence in new locations and complement Microsoft’s nearly two dozen permanent stores.

In other cases, big-box stores are going small.

Toys R Us began opening Toys R Us Express stores in malls and other shopping centers during the 2009 holiday season, taking advantage of mall vacancies created when KB Toys went out of business. The Toys R Us Express stores grew from 90 in 2009 to 600 in 2010.

Best Buy began testing Best Buy Mobile, a small store format centered around the idea of enhancing the experience of mobile phone shopping, with nine temporary stores in New York in 2006. The initial mix of stores included five of the small-format stores and four within existing Best Buy stores.

Barrie Avery, an 18-year-old high school student, sought advice at a Towson, Md., Best Buy Mobile for a new smartphone he said he wanted mainly for calling friends and playing games.

Stopping in on a weekday afternoon, he said he felt more comfortable in a smaller store where, he said, “there are more (sales) people to understand what you need.”

GameStop is opening 84 temporary GameStop Kids stores this holiday season, often at malls that also have permanent GameStop stores.

“This is truly our test environment,” Puzon said. “We’re looking at sales volume and footsteps every day. We’ve got options to extend some of the leases. With some, we may extend the leases or stay open as long as we get footsteps in the store.”


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