GameStop 2014 Annual Report Download - page 25

Our competencies in real estate and human resource management stem from our experience in rapid growth retail environments
with ahistory of opening 300-400 stores annually.
We have anchored our strategy and growth plans upon the following pillars, each of which are described more fully below:
•Maximize brick and mortar stores;
•Expand our pre-owned business;
•Own the customer;
•Expand our digital growth strategy; and
•Disciplined capital allocation.
Maximize Brick and Mortar Stores
Maximizing our brick and mortar stores includes capturing and retaining the leading market share of the new console cycle,
utilizing our stores to grow digital sales and applying our retail expertise to our Technology Brands businesses. Ourability to
execute this pillar of our strategic growth plan is dependent in part upon the following:
•Consistently Achieving High New Release Market Share. We focus marketing efforts and store associates on driving the
sale of new release video game products, both physical and digital. We employ avariety of rapid-response distribution
methods in our efforts to be the first-to-market and consistently in-stock for new physical and digital video game products.
This highly efficient distribution network is essential, as asignificant portion of anew title’s sales will be generated in the
first few days and weeks following its release.As the world’s largest retailer of video game products with aproven capability
to distribute new releases to our customers quickly and capture market share immediately following new product launches,
we believe we regularly receive larger allocations of popular new video game products. On adaily basis, we actively
monitor sales trends, customer reservations and store manager feedback to ensure ahigh in-stock position for each store.
To assist our customers in obtaining immediate access to new releases, we offer our customers the opportunity to pre-order
products in our stores or throughour websites prior to their release.
•Enhancing our Image as aDestination Location. Our video game stores serve as destination locations for game players,
mobile electronics consumers and gift givers due to our broad selection of products, compelling loyalty program offers,
game-oriented environment, trade-in programs and unique pricing proposition. We offer all major video game platforms,
provide abroad assortment of new and pre-owned video game products and offer alarger and more current selection of
merchandise than other retailers. In our video game stores, we provide ahighlevel of customer service by hiring game
enthusiasts and providing them with ongoing sales training, including training in the latest technical and functional elements
of our products and services, making them the most knowledgeable associates in the video game retail market. Our video
game stores are equipped with several video game sampling areas, which provide our customers with the opportunity to
view upcoming game trailers and play games before purchase.
•Targeting aBroad Audience of Game Players. We have createdstore environments targeting abroad audience, including
the video game enthusiast, the casual gamer and the seasonal gift giver.Our videogamestores focus on the video game
enthusiast who demands the latest merchandise featuring the “hottest” technology immediately on the day of release and
the value-oriented customer who wants awide selection of value-priced pre-owned video game products. Our buy-sell-
trade program offers consumers the opportunity to trade-in pre-owned video game products in exchange for store credits
applicable to future purchases, which, in turn, drives more sales.
•Expanding our Technology Brands Businesses. We have entered into astrategic partnership with AT&T and are selling
AT&T products and services in our Spring Mobile managed AT &T and Cricket Wireless branded stores and in some of
our Simply Mac and U.S. GameStop stores. We acquired Spring Mobile in November 2013. Spring Mobile has grown
from approximately 90 stores at the end of 2012 to 361 stores at January 31, 2015, through aprogram with two primary
focuses. The first of these is opening what we refer to as “whitespace” stores, or new stores in retail locations identified
by eitherAT&T or Spring Mobile management and agreed to by both parties.AT&T supports the opening of new whitespace
stores by its resellers in an effort to increase the size of its retail distribution channel. The second focus is on acquiring
smaller AT&T resellers. Both of these represent opportunities for strong growth in the near term for Spring Mobile.
AT&T acquired Leap Wireless in 2014, including the Cricket Wireless brand, to compete in the pre-paid wireless market.
The pre-paid sector of the wireless market is experiencing higher growth than the traditional post-paid market. Pre-paid
customers are generally interested in paying for wireless service on amonth-to-month basis without alonger-term contract.
We began opening pre-paid wireless stores in afew markets in November 2013 and have expanded to over 60 Cricket
Wireless stores operated by Spring Mobile as of the end of fiscal 2014 and expect to continue to expand our prepaid stores
with AT&T.
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