Ailing retailer GameStop teams up with Microsoft to power its online infrastructure, employee teams, and solidify a future in a digital-driven landscape.
GameStop has been in trouble for years now. As of June, the company owes a staggering $417 million in debt and its recent storefront transformations have been disrupted thanks to COVID-19. Now the retailer is pivoting more towards digital ecommerce without giving up on physical console, hardware, and merchandise sales.
GameStop recently announced a strategic multi-year partnership with Microsoft that will help it transition more towards ecommerce. Microsoft's Dynamic365 software and cloud suite will power GameStop's business data infrastructure, arming the retailer with robust, flexible, and efficient tools to manage sales and other key data points.
All of GameStop's employees will use Microsoft's communication tools, like Microsoft Teams and Office365 to manage schedules, connect, and plan out chain/store-specific strategies. Employees will also be given Surface hardware to keep track of sales, access the omni-channel database, and look up key info on games, titles, and availability of goods.
Another big part of this partnership is GameStop selling Xbox All Access subscriptions. This pay-as-you-go credit lease allows consumers to secure next-gen Xbox Series S or Series X consoles with low monthly payments. Xbox All Access is based on your credit, though, so be sure to check if it's actually worth doing or not.
The idea is to use Microsoft's hardware and services to streamline operations during a time when digital is taking a bigger bite out of physical sales. The next-gen Xbox Series X and PlayStation 5 consoles are expected to help buoy GameStop's downward trajectory, but that will only last for so long.
Pushing towards digital is important and this step will arm the retailer with important know-how and tools to make that happen.
The company currently has a four-part plan that includes:
- Optimize the Core: Optimize the core business by improving efficiency and effectiveness across the organization, including cost restructuring, inventory management optimization, adding and growing high margin product categories, and rationalizing the global store base.
- Become the Social / Cultural Hub for Gaming: Create the social and cultural hub of gaming across the GameStop platform by testing and improving existing core assets including the store experience, knowledgeable associates and the PowerUp Rewards loyalty program.
- Build Digital Platform: Build compelling digital capabilities, including the recent relaunch of GameStop.com, to reach customers more broadly across the omni-channel platform and give them the full spectrum of content and access to products they desire.
- Transform Vendor Partnerships: Transform our vendor and partner relationships to unlock additional high-margin revenue streams and optimize the lifetime value of every customer.
Under this agreement, GameStop will standardize its back-end and in-store solutions on Dynamics 365, Microsoft's portfolio of cloud-based business applications and customer data platform, empowering associates with integrated experiences across its business operations including finance, inventory, eCommerce, retail and point of sale. This will enable store associates the ability to access omni-channel insights about customer preferences and purchasing history, real-time information on product availability, subscriptions, pricing, and promotions in order to provide a differentiated and personalized in-store customer experience.
Additionally, associates will be equipped with new Microsoft Surface devices that will transform the in-store experience and help unlock new retail experiences in the future. The mobility of Microsoft Surface will allow associates to move freely within the store footprint, meeting the needs of customers faster and more efficiently. Microsoft Surface devices have already been an important part of the digital modernization strategy for store management.