LGC: Multi-Channel Retailing

As the scope of gaming becomes broader, a narrow focus can only hinder your company.

Specialising in one field, one service or one business model has seen many a good company go under, and while others have been able to make such an approach work, the majority of us have adapted to reach more clients and consumers.

It’s this line of thinking that has seen Modern Warfare 2 stocked at petrol stations and supermarkets starting pre-owned schemes. Finding new routes to market is crucial to survival as more and more firms begin retailing video games.

HOW THE HUT DID IT

The Hut Group has developed two routes to market over the years.

The first is business-to-consumer, which accounts for around 75 per cent of our turnover. We own and market seven online retail brands directly to consumers, each of which sits within a distinct family, kids or casual gamer category, including entertainment, fashion, gifts and gadgets, and health and beauty.

As a result, the Group has a combined database of over 4.4 million consumers and is able to cross fertilise these consumers into each of its brands with a sophisticated CRM engine which delivers very profitable traffic to all its sites. For example, when you buy FIFA 11 on Zavvi.com, we’ll give them a free 10 voucher for www.iwantoneofthose.com, which is another Group site.

In addition to the seven retail sites, we operate over 10 marketplace outlets within eBay and other similar portals.

Secondly, we have our business-to-business offering, which makes up the other 25 per cent of our turnover. We provide eCommerce and drop ship online retail solutions for over 20 blue-chip brands, providing over a million products to our clients’ end users.

Some of the companies that we work with on this include Asda, Debenhams, Forbidden Planet, Tesco, Toys R Us and Woolworths.

CUSTOMER RELATIONS

In terms of meeting the needs of our customers, our ability to move quickly and offer incredible value means we are growing our market share in each of our categories.

In less than two years we’ve grown our video games market share from under one per cent to seven per cent, according to Chart-Track, and the Group is now the No.1 gifts and gadgets online retailer in terms of the amount of product we dispatch across iwantoneofthose.com and gifted.com.

Balancing the two has served us well over the years. We are one of the UK’s fastest growing companies, with growth of 162 per cent since 2006. At no point in our five years of trading have we had any core debt – and you can bet that our diverse approach to retail is the reason for this.

And it’s only just beginning.

Not only do we have partnerships with several big names in the UK’s retail landscape, but we’re still attracting the attention of some great potential clients, and we expect this will be instrumental to our future growth.

The Group will continue to expand into Europe launching local versions of all of brands where relevant and possible, where local language, payment methods and products will be used to make more customers transact with us. We will also pursue organic expansion through selective acquisitions.

BIO: SARAH JASPER
Jasper has worked at The Hut Group since September 2009, originally as product manager before becoming head of business development. Prior to this, she served as events brand manager at Play.com. She is a member of the MCV Retail Advisory Board.