GAME Group CEO Ian Shepherd has told investors that he plans to triple the company's digital sales from £100 million to £300 million by 2013, but remained clear that boxed sales would continue to be a focus.
Speaking as part of a business strategy presentation to investors, Shepherd outlined a plan to build on existing strengths whilst taking on new challenges in an evolving marketplace.
"Great businesses are good at reinventing themselves," said Shepherd. "Following their customers as their customers change. Gaming customers are changing."
"The market is getting more confusing. That creates as opportunity for the aggregator, the expert, the guide. In the games market today there is not that guide across the whole breadth of the market. By deploying our strengths we can position ourselves as that aggregator."
Key to that strategy is tracking customers and increasing loyalty, Shepherd believes. Schemes such as the GAME loyalty card are already helping to do this, but by keeping customers close, the CEO believes that he can make sure that GAME is the first point of call at each stage of buying. Part of that is recognising that, whilst digital and boxed sales may be different revenue streams, they are also coming from the same customers.
"It's misleading to think of those two lines [boxed and digital sales] as separate," he said, referring to a sales projection graph.
"Boxed product has been challenging, and will continue to be so, but it remains important, and will continue to be so.
"Most digital content sold today, is add-ons to physical boxed products that's already been sold. Map packs, DLC, extra characters."
Therefore, a loyal customer not only buys a boxed game from his favourite retailer, but reward schemes encourage him to return for any future DLC purchases. This, Shepherd hopes, is going to help the group triple digital revenues from the current £100 million a year to £300 million.
"That's the point at which we'll be starting to genuinely play in the online and digital space to the same extent we currently play as a successful business in the retail space."
High street stores continue to play an important role in strategy, giving a touchstone to the shoppers experience which Shepherd saw as important to the store's Christmas period sales figures.
"People chose to come and buy games from people they could talk to about it," the CEO claims. "From somewhere they could touch and feel them."
But stores have another function to fulfil in the new strategy, too. By ramping up trade in deals and the pre-owned market, Shepherd feels that GAME can soon increase the 2000 used games they currently offer online massively, aiming to offer a pre-owned option for every single title "within the next few months."
"Having a great retail space will catapult us into a leading position in digital and downloaded content. What it's doing is bringing the multichannel opportunity to the fore because it's using the trade in engine generated by the store estate to create a competitive position online which a standalone online retailer cannot do."