Race to Retail: SEGA talks why retailers should be involved with video games licensing programs

SEGA Europe's senior licensing manager, Toby Rayfield explains why retail outlets should capitalise on the fastest growing entertainment medium in the world.
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Second-hand games were once a lucrative billion dollar market. Retailers like Amazon and Toys R Us encouraged customers to buy and sell used games and some, like Gamestop, were particularly good at it, with used game sales accounting for more than 46 per cent of gross profits in 2016. While the numbers sound great, sales are in decline, and have been for the last few years.

Leading retailers expect new and used software sales to decline significantly in 2017, forcing the closure of retail locations and confronting buying teams with the question ‘What now?’. The answer, unsurprisingly for some, might lie in video game licensing programs. 

These days, there are hundreds of online platforms offering licensed merchandise for a huge range of brands and IPs, from the latest film to the newest game. All major video game companies now have licensed programs sold globally both online and offline, and bring with them millions of dedicated fans with the potential for a much higher conversion rate than a high street fashion brand could expect. 

There is no argument that retail has been hit hard by the growth of e-commerce. There have been many retail bankruptcies in 2017, hundreds of stores have closed, companies have filed for bankruptcy, apparel companies’ stocks have hit new multi-year lows and even established global brands, such as Ralph Lauren, who recently announced the closure of their flagship Polo store on the iconic Fifth Avenue, have had to rethink their retail strategy.

Retailers need to be hyper vigilant, ever present, always online, active and interacting with their customers.

Toby Rayfield, SEGA Europe

People are now buying more online than ever before. Mobile shopping has evolved and grown to 20 percent of total digital online spending. Traditional retail has been slow to react, unsure perhaps how to react, and in today’s always online high-speed economy, many have been left behind scratching their heads and wondering where the customers have gone.

It takes more than a sale sign or an enticing shop window display these days to win the retail war. You need to be hyper vigilant, ever present, always online, active and interacting with your customers. It’s not an easy transition for a traditional retailer and it will only get harder as the turned on and tuned in younger generation come up with new ideas and ways to win your customers away from you.

The digital generation has its own heroes and identity and by licensing video game characters and worlds, retailers have a fantastic opportunity to bridge a gap into the world and mind of today’s modern shopper. Just don’t forget that your customer is an informed and educated shopper with a world of opinion and the power of a journalist at their fingertips.

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