GameStop 2012 Annual Report Download - page 29

We distribute merchandise to our Canadian segment from two distribution centers in Brampton, Ontario.
We have a distribution center near Brisbane, Australia which supports our Australian operations and a small
distribution facility in New Zealand which supports the stores in New Zealand. European segment operations are
supported by six regionally-located distribution centers in Milan, Italy; Memmingen, Germany; Arlov, Sweden;
Valencia, Spain; Dublin, Ireland; and Paris, France. We continue to invest in state-of-the-art facilities in our
distribution centers as the distribution volume, number of stores supported and returns on such investments
permit.
Digital Distribution. We have developed proprietary technology to work in conjunction with developers,
as well as Microsoft and Sony, to enable us to sell digitally distributed game content in our stores and on our
e-commerce sites. The downloadable content typically available today consists of add-on content developed by
publishers for existing games.
Management Information Systems. Our proprietary inventory management systems and point-of-sale
technology show daily sales and in-store stock by title by store. Our systems use this data to automatically
generate replenishment shipments to each store from our distribution centers, enabling each store to carry a
merchandise assortment uniquely tailored to its own sales mix and rate of sale. Our call lists and reservation
system also provide our buying staff with information to determine order size and inventory management for
store-by-store inventory allocation. We constantly review and edit our merchandise categories with the objective
of ensuring that inventory is up-to-date and meets customer needs.
To support most of our operations, we use a large-scale, Intel-based computing environment with a state-of-
the-art storage area network and a wired and wireless corporate network installed at our U.S. and regional
headquarters, and a secure, virtual private network to access and provide services to computing assets located in
our stores, distribution centers and satellite offices and to our mobile workforce. This strategy has proven to
minimize initial outlay of capital while allowing for flexibility and growth as operations expand. To support
certain of our international operations, we use a mid-range, scalable computing environment and a state-of-the-
art storage area network. Computing assets and our mobile workforce around the globe access this environment
via a secure, virtual private network. Regional communication links exist to each of our distribution centers and
offices in international locations with connectivity to our U.S. data center as required by our international,
distributed applications.
Our in-store point-of-sale system enables us to efficiently manage in-store transactions. This proprietary
point-of-sale system has been enhanced to facilitate trade-in transactions, including automatic look-up of trade-in
prices and printing of machine-readable bar codes to facilitate in-store restocking of pre-owned video games. In
addition, our central database of all pre-owned video game products allows us to actively manage the pricing and
product availability of our pre-owned video game products across our store base and reallocate our pre-owned
video game products as necessary.
Field Management and Staff
Each of our stores employs, on average, one manager, one assistant manager and between two and ten sales
associates, many of whom are part-time employees. Each store manager is responsible for managing their
personnel and the economic performance of their store. We have cultivated a work environment that attracts
employees who are actively interested in electronic games. We seek to hire and retain employees who know and
enjoy working with our products so that they are better able to assist customers. To encourage them to sell the
full range of our products and to maximize our profitability, we provide our employees with targeted incentive
programs to drive overall sales and sales of higher margin products. In certain locations, we also provide certain
employees with the opportunity to take home and try new video games, which enables them to better discuss
those games with our customers. In addition, employees are casually dressed to encourage customer access and
increase the “game-oriented” focus of the stores.
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