How GameStop tripled its online product assortment by shipping from stores
August 29, 2016 06:00 AM
When video game and consumer electronics retailer GameStop Corp. began to test shipping online orders from stores in March 2015 it quickly realized that the new fulfillment option would help drive more online orders by presenting customers—gamers eager to snap up rare, vintage or hard-to-find video games—with a much wider assortment of products, says Richard Armour, senior director of multichannel for GameStop.
Because GameStop, No. 45 in the Internet Retailer 2016 Top 500 Guide allows its avid gaming clientele to buy, sell and trade video games at it stores, GameStop stores have greater product variety than its warehouses, Armour says. That includes vintage and rare video games, Armour says.
Once the retailer realized the potential of shipping products from stores, it knew it needed more robust technology to run such a program. The in-house system it used for its test wouldn’t work.
“We started with a homegrown solution,” Armour says. “It was pretty scrappy and we needed something to support [ship from store] on much larger scale. It very quickly became apparent this would be a key pillar of our omnichannel strategy as it significantly increased our online assortment.”
The retailer decided to use a service from vendor eBay Enterprise, an e-commerce services provider that has since been renamed Radial, to implement ship from store at its 4,000 GameStop locations. It began rolling out the fulfillment option to stores in October 2015 and completed the project in February 2016, says Jay Rodriguez, manager of the operations team at the retailer.
Since offering ship from store service GameStop has tripled the number of SKUs for sale on GameStop.com, the two executives say. Today, ship from store is a “meaningful channel for GameStop,” Armour says, without being more specific except to say that GameStop now internally breaks out ship from store orders when evaluating online sales.
The system from Radial, called Ship-from Store, connects each store’s inventory from the store point-of-sale system to GameStop’s online order management system. GameStop also built a store notification system that alerts employees via its point-of-sale system that the store has an online order in the queue that needs to be fulfilled. After an employee see the alert she enters a web portal specific to her store to access the order details. There she has the option to provide notes about the order. For example, she can notify the system that the item requested is damaged or lost, Rodriguez says. To fulfill the order, the employee finds the item and packages it for shipment, the executives say.
GameStop has trained employees on how to ship web items from stores and has created training documents to offer help, the executives say.
Rodriguez and Armour say they especially like the rules and customization options in the Ship-from Store system. For example, GameStop can change which stores it wants to fulfill online orders. A massive superstore in New York City might fulfill online orders while a smaller mall-based store might not. GameStop also can set a maximum number of online orders a store can accept each day. “We tweak the system to be as efficient as possible,” Armour says, adding that his team changes system parameters as frequently as once a week.
Rodriguez and Armour say they have navigated new challenges when implementing shipping from store. For example, an order containing 10 items could potentially ship in 10 packages from 10 stores. GameStop says it is working to make shipping from stores more efficient. .
Another massive undertaking: creating content, including descriptions, images and screen shots for the influx of games now available online, Armour says. The GameStop content team spent ample time adding detailed descriptions and rich imagery to go with the products for sale online, the executives say.
GameStop began intensifying its focus on omnichannel about five years ago, the executives say. In addition to shipping from stores, the retailer offers reserve online, pick up in store service. After a consumer reserves an item the store emails her when it is ready to be picked up and holds the product for 48 hours. GameStop says reserve online, pick up in store is its fastest growing channel. GameStop also enables store shoppers to order out-of-stock products online via kiosks.
Radial, formerly known as eBay Enterprise, launched in April. At launch, Radial president Tobias Hartmann said the company’s focus is on providing its omnichannel software services to midsized retailers as well as the big retail chains that formed its customer base in the past. About 20,000 stores use its Ship-from Store technology, the company says.
Stefan Weitz, chief product and strategy officer at Radial, summarized the four key elements of Radial’s business for Internet Retailer as:
- Order management technology enabling omnichannel services.
- Payments, tax and fraud services. $6 billion worth of payments passed through Radial systems last year, the company says. It also offers a fraud management service.
- Freight and fulfillment—Radial has 25 distribution centers in the United States and two in Europe. Many of these were acquired though eBay Enterprise’s acquisition of e-commerce technology providers Innotrac and GSI Commerce.
- Customer care/call centers—Radial runs such centers for e-retailers.
As of late 2015 eBay Enterprise served 523 of the Top 1000 global online retailers, according to the Internet Retailer Vendors to the Top 1000, a 21% increase from a year earlier. The combined web sales of those 523 retailers is $134.6 billion, according to Internet Retailer estimates.