Game-Changer: How the gaming world is revolutionizing the retail space

Shoppers running on a treadmill in a fantasy land, controlling an avatar of themselves and becoming the heroes of a game. Welcome to ‘Reactland’, an immersive video game experience installed in Nike stores around China where people could try out the new bouncy Nike shoes through a real-time video game. The experience is simple: scan yourself to create your avatar, put on a pair of Nike React shoes, jump on the treadmill and use a handheld button to navigate. The further you run, the higher you make it on the leaderboard. Campaigns like Reactland boldly challenges traditional shopping by turning a game into a real-life store.

We are living in an age where global gaming industry has been steadily on the rise since the first gaming console entered homes in North America in the 70’s. It was valued at $175.8 billion in 2021, representing a growth of 30.1% since 2018, according to a leader in gaming market insights and analytics Newzoo, and is predicted to continue at this level or greater for the medium term. Interest and investment in the industry by major personalities such as Travis Scott, Drake, and Ariana Grande, add further awareness of its status. Although still in a stage of relatively early development in the GCC, the region’s gaming market is expected to hit $821 million this year, up from $693 million in 2017 (PwC). At this point in time, it would be an understatement to say that gaming retailers are on the rise. None of this comes as a surprise to Kishan Palija, Managing Director of Geekay sports, a company committed to transforming the future of esports and gaming in the MENA region. “Gaming ecosystem is becoming the go-to social media platform for gamers. It is a billion dollar industry even in the Middle East. In MENA alone, it is a 4.5 billion dollar industry and it is growing massively. The amount of interest that we are guaging from the other industries to be part of the gaming industry is superb,” said Kishan.

Geekay is one of the largest gaming retailers in Middle East since 1968 with a chain of 32 stores across UAE, Bahrain, Kuwait, Oman and Qatar. It is a major business entity across segments in the Video Games, Toys, Lifestyle Merchandise, Technology and Telecom space. They specialise in all Gaming Consoles, Games Software and High Quality Accessories. According to Kishan, gamers in the GCC are highly skilled, hard-working, and talented, and the potential for their international success is assured if they receive the right support and development. We are delighted to have signed our first League of Legends Esports team, and will be working with them on an ambitious plan to be competing at the Worlds Championship by next year. Not only will this be a first for the region, but will also offer an opportunity for the team to show their mettle against the world”.

Gaming during the pandemic:

Increasingly, during the pandemic, virtual gaming provided people with an outlet and both stress relief and fun. “When Covid-19 hit, nobody was aware of how and what is going ahead. The pandemic has helped gaming overall as an industry because a lot of people were working from home and at the same time their children were doing home-learning. They had a lot of extra time while being stuck at home, what else could they so, either watch a movie or get into gaming. That’s why our industry benefited overall,” added Kishan. In 2020, according to Data and market firm Nielsen, “82 percent of global consumers played video games and watched video game content during the height of COVID-19 pandemic lockdown. In March of 2020 video game sales in North America were up 34 percent from prior year while hardware sales were up 63 percent, as many gamed as a way to pass the time in lock down. By July 2020 total sales of video game consoles and games in the US had reached US$6.6 billion — the highest in 10 years.

Gamification in the retail space

With online gaming on the rise, various retail brands have popped up in video games. Turning shopping into a game has been a new trend to excite the consumers, a space that is being explored. Gucci and Armani merchandises are being used by the online game warriors. Beauty brand Lancôme teamed up with Alibaba to create an augmented reality game in Hong Kong, along with a pop-up store, to celebrate Chinese New Year. The app featured an AR scavenger hunt where consumers could win limited edition products and gifts by finding and scanning Lancome’s signature beauty product, Genifiques. Coca-Cola created a supermarket game in Beijing and Singapore to catch consumers’ attention at the point of purchase in-store. Shoppers could connect to their mobile to the drag-and-shoot game, which involved successfully throwing virtual ice cubes into a glass of coke. Fashion brands like Net-a-Porter, Dior and Burberry have offered up clothing for players to wear on their avatars. Top rated game Minecraft merged with clothing brand Uniqlo on a new clothing line for both kids and adults. Louis Vuitton had a campaign featuring Final Fantasy XIII’s character, Lightning, as the new face of its SS16 collection for instance. More recently, Moschino launched a new collection with Sims, featuring garments with Sims motifs. A virtual hoodie was also released so players could dress their avatars in designer clothing in the game itself. French luxury brand Kenzo launched a gamified e-shopping experience last year to promote the release of its new Sonic sneaker. The campaign challenged consumers and added excitement to their shopping journey for those lucky enough to even get the chance to hit the purchase stage. Such retailers entered the game space to take their businesses to the next level.

Online Retailers versus Offline Shops

Over the years we have seen the retail arm especially with regards to the physical stores falling short globally. So, has the surge in digital stores impacted the sales in physical stores of games as well? The question would therefore be, why would the customer make the extra effort to go out and buy the game, if they can simply do so from the very console/PC that they will be playing that game on? According to Kishan, even though gaming is getting more and more digital, gamers in the MENA market are more likely to buy physical games. When I talk about digital to physical ratio – physical stores still dominate the business. A lot of gamers here are collectors and they like to own it forever. Overall in the MENA there is a love for collectors edition and exclusive editions which Geekay carries.I think that’s where we have a plus over some of the western markets”.

Key success factors

Kishan goes on to elaborate the various factors that have resulted in the success of gaming retailers like them. “We listen to a lot of our gamers, the kind of products they want, we try to bring and develop those products with the help of our brands and at the same time we give an omnichannel approach. We are very connected and engaging with our customers. There is a trust element that we have developed with the gamers”. Being in the gaming business for 30 years, Kishan also has access to a lot of data to analyse trends and changes in customer needs. “We have been seeing what the gamers want and been making that product available to them. That’s the most important thing about retailing – you need to have the right product in the right place and at the right time”, added Kishan.

The competition between the various gaming retailers, in particular, is very strong. GameStop is by far, the world’s largest video game retailer based out of Texas. The other top competitors booming in the market include Sony, Amazon, Best Buy, Nintendo, Carrefour and Auchan. How do these companies use data to keep up with the competition? ”Every market is very different. Data is very crucial in the gaming industry. It makes companies understand what, where and how the customers want it”, said Kishan. His company Geekay used both internal data and external data to understand customers. “When you look at internal data, we have incorporated ‘Dynamic 365’ which is a cloud based system, which allows us to track what, how and to whom we are selling. Another crucial factor in game retailing is to understand what the customer needs, look at their buying trends. “We look at what the gamers are watching internationally on YouTube or Twitch. We read and analyse all those reports and make products based on that,” concluded Kishan.