November 21, 2008
7-Eleven Gets Gamey
Forget everything
you’ve heard about the changing convenience store and how the channel is
moving out the corn dogs in favor of California rolls to bring in more
upscale consumers, particularly those of the female variety.
Nope, the
business is still all about guys 18
– 34 and 7-Eleven thinks it can bring a bunch more into its stores
now that it is selling “A list” video game titles in its 5,600+
stores across the U.S.
“Videogames
aren’t just for kids anymore, and they’re not just sold at big box and
game stores either,” said Michael Jester, 7-Eleven category manager
for gaming and electronics, in a press release. “We can compete with
the major players and offer consumers a more convenient place to purchase
games and accessories. They can pay a deposit and reserve their copies
ahead of time and pick them up starting midnight (12 am) on the release
date at locations closer to their homes.”
The convenience
store chain will start out offering seven top titles heading into the holidays
(while supplies last) along with prepaid gift cards for Massively
Multi-Player Online Games (MMOGs).
Among the titles 7-Eleven
will initially make available are:
1. Guitar Hero: World Tour-Band Kit
(Microsoft Xbox 360, Sony PlayStation 2 and 3, Nintendo Wii)
2. Fallout 3 (Microsoft Xbox 360,
Sony PS3, PC)
3. World of Warcraft: Wrath of the
Lich King (MMOG available on PC only)
4. 007: Quantum of Solace (Xbox 360,
PS3 and PS2)
5. Gears of War 2 (exclusive to Xbox
360)
6. WWE Smackdown vs. Raw 2009 (Xbox
360, Sony PS3 and PS 2)
7. Call of Duty: World at War (Xbox
360, PS3)
“This
is not just a holiday promotion for us,” Mr. Jester said, “but
a brand new product line-up that will be available year-round. We may not
be a total entertainment destination … yet, but we’re hoping to expand
our selection beyond the high-dollar, hot-selling games to include options
for all budgets, like value-priced videogames as well as DVD movies. For
consumers wanting convenient one-stop shopping for at-home entertainment
along with groceries and gas or who just want to avoid big-store shopping
inconveniences, their local 7-Eleven store is open and ready.”
Discussion Questions:
What do you think of 7-Eleven’s move into videogame sales? Are convenience
outlets a logical point of sale for videogames and will stores in the
channel be able to compete against the likes of competitors ranging from
GameStop on one end and Walmart on the other?
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During my tenure with Southland Corp. (7-Eleven stores), we decided to offer VHS movies for rental. In our test stores we displayed the movies in “browsing drawers” directly beneath – wait for it – the cheese pump station for hot dogs and nachos. We rented some cheesy movies and some REALLY cheesy movies. Needless to say, that effort was tasty in an unexpected way and eventually failed.
Today, however, game cartridge availability can be a masterstroke by 7-Eleven and may succeed. It’s a wonderful combination with late-night beer runs, and makes one wonder why they didn’t think of this before. But, why not RENT videogames instead of selling them? (The beer contributes to that customer decision.) Rental creates another trip to the store for returns, and then only one question remains; “Can I get that with cheese?”
In response to Warren Thayer’s comment about how fast the demographic can run, when I managed 7-Elevens during college I encountered thieves who dropped products to the floor and then shuffled them out the front door with their feet.
I live in small town in Virginia and saw the big sign about game sales at our local 7-Eleven this week. I thought “what a good idea” since we’re at least 30 minutes from a big box store or a Gamestop type store. So, it depends on where you live. The buyers will take their paychecks from McDonald’s and buy a game at the same time they get their lottery tickets.
I’ve always believed that c-store merchants are some of the industry’s more innovative retailers. But venturing into gaming sounds less like innovation and more like “me too.” This is a crowded sector, and I have to wonder whether 7-Eleven will be able to meet or beat competitors’ prices.
7-Eleven also faces a couple other issues. One, they need to get more consumers to go inside the store after refueling. And, contrary to the company’s comments, they do need to get consumers to think of the store as an entertainment product destination, as well as the outlet where they buy gasoline and grab-and-go convenience products. Perhaps a better approach would be to install one of the vending machines that already dispense DVDs, consumer electronics and CE accessories at various locations like grocery stores and airports.
The c-store industry has always been very adept at meeting the changing needs of its customer base. I agree that it may seem inconceivable that someone will spend $5–$60 for a video game in a c-store, although 7-Eleven has demonstrated its ability to sell relatively high-priced items during the Holidays in the past.
The c-store is primarily in the business of selling presold items–i.e., items where the customer is aware not only of the brand but also the item itself. This is what allows the industry to have short transaction times and why one or two clerks can handle the volume of transactions that they do. While not a gamer myself, I expect that the target customer is very familiar with the games and will not require a great deal of interaction in the purchase process.
There are a number of ways 7-Eleven can address the potential theft issue. Most stores are now owned by franchisees that personally absorb any losses due to theft and I have faith that they, and the company, have thought through this issue.
Retail channels continue to blur and with more and more channels seeking the convenience customer, c-stores are seeking ways to remain relevant. This is simply another instance of a leading c-store retailer seeking a way to meet its customers’ needs.
So let’s look at this from a customer perspective. I just filled up my car with my last 40 bucks I have and now I need some Ho Ho’s and a Red Bull so I can make it through the day. Am I really going to buy “Gears of War” for 50 or 60 bucks during that transaction? I can understand 7-Eleven wanting upper-scale customers but they should really focus on raising the quality and selection on their core mix. I’m curious to see what their after-purchase policy is on the games. Overall, this direction gets a collective naah.
They’re fine on the demographic, but they’d better be able to meet or beat market pricing on these games, because the buyers shop price very hard. They also shop variety, which will be a problem for 7-Eleven. Finally, logistically, most C-stores I visit have only one or two very busy, over-burdened retail sales clerks on duty at any one time. Where I live, you can walk in and find nobody around whatever if the clerk had to go to the bathroom. So I’m not sure how they’re going to have the clerks service this new set of offerings and keep up with the cigarettes, coffee, sandwiches, gasoline pump problems, etc. Finally, games are very prone to theft, and the demographic that buys them can also run very, very fast. Aside from all that, I think it’s a great idea.
I think it may be time for the Convenience Store business to re-brand itself; dividing into two camps. There is the suburban, quick-serve, gas-station, drive-in, fill-up, drive-out business (notice how many hyphenated words there, does that means something?), and the urban alternative to big box supermarkets, drugstores, or fast food outlets. Who are they really competing with and what do they need to do to be successful? Are selling video games a desperate attempt to sell something like Blockbuster is doing and Linens & Things/Circuit City did, or is it really strategic?
Somewhere out there, some smart C-store executive is thinking up a new purpose and reason for their existence. Heck, if nothing else what 7-Eleven learned from the Simpsons link, they have entertainment value, just from stopping in one.
I think they are too late to the game. They are entering a market that is moving away from retail and moving more and more toward vending and online downloads. They may see a quick boost in sales for a few months, but I don’t believe this will be successful, long term.
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During my tenure with Southland Corp. (7-Eleven stores), we decided to offer VHS movies for rental. In our test stores we displayed the movies in “browsing drawers” directly beneath – wait for it – the cheese pump station for hot dogs and nachos. We rented some cheesy movies and some REALLY cheesy movies. Needless to say, that effort was tasty in an unexpected way and eventually failed.
Today, however, game cartridge availability can be a masterstroke by 7-Eleven and may succeed. It’s a wonderful combination with late-night beer runs, and makes one wonder why they didn’t think of this before. But, why not RENT videogames instead of selling them? (The beer contributes to that customer decision.) Rental creates another trip to the store for returns, and then only one question remains; “Can I get that with cheese?”
In response to Warren Thayer’s comment about how fast the demographic can run, when I managed 7-Elevens during college I encountered thieves who dropped products to the floor and then shuffled them out the front door with their feet.
I live in small town in Virginia and saw the big sign about game sales at our local 7-Eleven this week. I thought “what a good idea” since we’re at least 30 minutes from a big box store or a Gamestop type store. So, it depends on where you live. The buyers will take their paychecks from McDonald’s and buy a game at the same time they get their lottery tickets.
I’ve always believed that c-store merchants are some of the industry’s more innovative retailers. But venturing into gaming sounds less like innovation and more like “me too.” This is a crowded sector, and I have to wonder whether 7-Eleven will be able to meet or beat competitors’ prices.
7-Eleven also faces a couple other issues. One, they need to get more consumers to go inside the store after refueling. And, contrary to the company’s comments, they do need to get consumers to think of the store as an entertainment product destination, as well as the outlet where they buy gasoline and grab-and-go convenience products. Perhaps a better approach would be to install one of the vending machines that already dispense DVDs, consumer electronics and CE accessories at various locations like grocery stores and airports.
The c-store industry has always been very adept at meeting the changing needs of its customer base. I agree that it may seem inconceivable that someone will spend $5–$60 for a video game in a c-store, although 7-Eleven has demonstrated its ability to sell relatively high-priced items during the Holidays in the past.
The c-store is primarily in the business of selling presold items–i.e., items where the customer is aware not only of the brand but also the item itself. This is what allows the industry to have short transaction times and why one or two clerks can handle the volume of transactions that they do. While not a gamer myself, I expect that the target customer is very familiar with the games and will not require a great deal of interaction in the purchase process.
There are a number of ways 7-Eleven can address the potential theft issue. Most stores are now owned by franchisees that personally absorb any losses due to theft and I have faith that they, and the company, have thought through this issue.
Retail channels continue to blur and with more and more channels seeking the convenience customer, c-stores are seeking ways to remain relevant. This is simply another instance of a leading c-store retailer seeking a way to meet its customers’ needs.
So let’s look at this from a customer perspective. I just filled up my car with my last 40 bucks I have and now I need some Ho Ho’s and a Red Bull so I can make it through the day. Am I really going to buy “Gears of War” for 50 or 60 bucks during that transaction? I can understand 7-Eleven wanting upper-scale customers but they should really focus on raising the quality and selection on their core mix. I’m curious to see what their after-purchase policy is on the games. Overall, this direction gets a collective naah.
They’re fine on the demographic, but they’d better be able to meet or beat market pricing on these games, because the buyers shop price very hard. They also shop variety, which will be a problem for 7-Eleven. Finally, logistically, most C-stores I visit have only one or two very busy, over-burdened retail sales clerks on duty at any one time. Where I live, you can walk in and find nobody around whatever if the clerk had to go to the bathroom. So I’m not sure how they’re going to have the clerks service this new set of offerings and keep up with the cigarettes, coffee, sandwiches, gasoline pump problems, etc. Finally, games are very prone to theft, and the demographic that buys them can also run very, very fast. Aside from all that, I think it’s a great idea.
I think it may be time for the Convenience Store business to re-brand itself; dividing into two camps. There is the suburban, quick-serve, gas-station, drive-in, fill-up, drive-out business (notice how many hyphenated words there, does that means something?), and the urban alternative to big box supermarkets, drugstores, or fast food outlets. Who are they really competing with and what do they need to do to be successful? Are selling video games a desperate attempt to sell something like Blockbuster is doing and Linens & Things/Circuit City did, or is it really strategic?
Somewhere out there, some smart C-store executive is thinking up a new purpose and reason for their existence. Heck, if nothing else what 7-Eleven learned from the Simpsons link, they have entertainment value, just from stopping in one.
I think they are too late to the game. They are entering a market that is moving away from retail and moving more and more toward vending and online downloads. They may see a quick boost in sales for a few months, but I don’t believe this will be successful, long term.