December 22, 2010, 1:44 PM

Loyalty program proves rewarding for GameStop

Members of PowerUp Rewards program spend more time shopping and trading games.

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Participants in PowerUp Rewards, the new loyalty program of video game and entertainment software retailer GameStop Corp., are shopping three times as often as non-members and outperform average customers at both trading games and multichannel shopping, the retailer says.

“We're seeing consumers far ‘stickier’ than we thought would they be,” CEO Paul Raines said in GameStop’s third quarter earnings conference call in November.

PowerUp members accumulate points whenever they make a purchase or trade in a game or system. Points can be redeemed for items in the GameStop rewards catalog, including free merchandise point cards for all gaming platforms. Participants also receive invitations to member-only events and advance notice of sales, promotions, and other offers.

Customers can join the basic rewards program for free or PowerUp Rewards Pro, which offers more benefits, for $14.99 a year.

Members are activating memberships by building their game libraries online, Raines says. “We now have over 20 million games in those libraries, allowing us to market and recommend to those customers in unique ways,” he says.

The PowerUp Rewards program is a way for GameStop to differentiate itself from competitors, Raines said.

“Because the category is generally all the same price, giving consumers one more reason to turn left into GameStop instead of right into a big box, has turned out to be a very powerful thing,” he says. “Our ability to communicate with consumers based on their game library has become a very powerful effort. We're seeing a lot of productivity from those unique recommendations we’re making in those unique messages.”

In addition, 70% of the paid PowerUp Pro members signed were over and above those signing up for GameStop’s Edge Card discount program, Raines says. The Edge program focuses on the used game segment.

“What that means is, we are bringing in a lot of new people to the paid membership,” he says. “We're seeing a lot of moms, dads, grandparents, gift buyers, people who would not be our core Edge customer.”

GameStop, No. 115 in the Internet Retailer Top 500 Guide, ran a pilot of the PowerUp Rewards program in May, and rolled it out across the U.S. during the third quarter.

 

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