In this series, Myra Vaughn, Principal of MG2’s Consumer Experience Market, will share how Esports (the competitive segment of video gaming) and the gaming industry will create impactful consumer opportunities for retailers, brands, and real estate developers in 2020 and beyond.
In the first part of this series, I explored the Gamer Community and Consumer (an emerging lifestyle category) and creating the ‘best in class’ uniquely branded gaming experience. In this segment, we will explore how traditional retail brands are capitalizing on this emerging industry, as well as strategies for engaging the gamer consumer within the retail store experience.
The remarkable statistics of the Esports and video gaming industry have grabbed the attention of non-endemic brands (brands that aren’t traditionally identified within the gaming industry), creating an urgency for brand marketers to explore strategies to engage the esports and video gaming industry. According to the 2018 Newzoo Global Esports Market Report, “Brands will invest $694 million in the Esports industry, 77% of the total market. This will grow to $1.4 billion by 2021, representing 84% of total Esports revenues.” Barney Waters, President of K-Swiss, states that “Gaming content on Twitch has more viewers than HBO, Netflix, Hulu, and ESPN combined. And the viewership of some of the big Esports tournaments is double the viewing audience of the NBA finals.” He goes on to mention that there is a massive reach toward the targeted consumers for brands within Esports. Jodie Fullagar, Managing Director of M&C Saatchi Sport and Entertainment, noted, “Brands continue to ignore the potential audience goldmine of Esports.”
This year, Louis Vuitton partnered with Riot Games for the League of Legends World Championship. According to their website, Louis Vuitton created, in collaboration with Riot, “an unprecedented, one-of-a-kind Trophy Travel Case to hold the Summoner’s Cup, the trophy awarded to the world champion and considered the most prestigious prize in Esports. The bespoke trunk, the first of its kind for an Esports championship, will feature both traditional Louis Vuitton savoir-faire along with cutting-edge, high-tech elements inspired by the League of Legends universe.”
It seems like an odd pairing. But when you think about it, the partnership of a high-end luxury fashion brand with a video game world championship tournament makes sense. Winners walk away with millions of dollars, skyrocketing them to nouveau riche status, and their trophy, the symbolic source their newfound wealth, is clad in a pattern that’s long been synonymous with status, money, and fame. Louis Vuitton is simply getting in on the ground floor of brand loyalty for this generation, and it’s brilliant.
Stop consulting the retail playbook.
This partnership, however, while quite impressive, does not address the root of the problem most brands are facing: successfully engaging with gamers in their brick-and-mortar spaces. The introduction of a new product or lifestyle category can be a polarizing process. Traditional retailers sometimes expect a bifurcation of customers – those that “do” and those that “do not.” However, with the emergence of gaming products and lifestyle categories, this expectation of bifurcation has created barriers for endemic gaming brands looking to draw gamers into their stores. Traditional retail currently isn’t positioned to capture and engage gamers. That said, the industry has the opportunity to evolve its approach to in-store experiences and capitalize on this influential and broad demographic.
It’s not about shelf space.
Per Nate Eckman of ULT apparel, the challenge for traditional retail involves a “massive educational curve”. In speaking to traditional retailers regarding the integration of his apparel brand into their stores, Eckman says the conversation usually revolves around convincing a retailer to give up “valuable shelf space.”
“Physical shelf space is important, but you also need to think about the customer and how they build community together – are you enabling them to do that in your store?”
The discussions fixate on, “How are we going to fit you into our store?” However, the discussion should be less about product placement and more about understanding the gaming lifestyle and those who embrace it.
According to Eckman, it’s less about how many cubic feet of shelf space a retailer can fit that customer into – that emerging category is people. The gaming consumer over indexes with apparel, music, sports, etc. and shouldn’t be marginalized to a shelf.
Empowering a digital community in the real world.
The Esports arena experience, for example, is a collection of people sharing passions around gaming, making friends, building community. There is a desire to play games with friends and share that experience in physical proximity. There exists a need to interact with, identify with, and share your passions with other people. Eckman notes, “Physical shelf space is important, but you also need to think about the customer and how they build community together – are you enabling them to do that in your store?”
When Eckman has this discussion with traditional retailers, he hears the same responses over and over: “Our store isn’t designed to facilitate meet-ups,” “Our store doesn’t allow meet-ups,” “We don’t have the internet capacity to integrate gameplay,” “We can’t stream anything, legal isn’t going to let you broadcast content,” or “We really don’t want to have too many kids in the store.”
“How do you integrate the products and the experience – that recognize this consumer and their desire for ‘community’?”
In addition to creating in-store experiences that successfully integrate the gaming lifestyle, understand the opportunities for over indexing categories, and build community within their consumers, endemic gaming brands can also help traditional retailers connect to customers digitally.
However, Eckman feels that the gaming lifestyle category still needs a lot of attention to succeed and be sustainable within a traditional retail space. “Like understanding the modern consumer,” he comments, “gamers also like streetwear, they like fashion, music, and follow Post Malone, seeing him talk about video games and the media they consume.” It’s about connecting the dots from what’s considered mainstream to the gamer lifestyle (which itself is on its way to becoming mainstream.)
“Like understanding the modern consumer – gamers also like streetwear, and they like fashion, music.”
Creating a truly holistic experience.
Endemic gaming brands and products primarily rely on e-commerce and wholesale. In traditional retail stores, this category is typically departmentalized by brand — Blue for PlayStation, green for Xbox, red for Nintendo, etc. Dan Kelley with HyperX states that there is a lack of a holistic approach to the experience of the gaming category within the wholesale environment.
“It’s not this foreign audience that brands must figure out how to get into their stores – they are already there.” Kelley notes, “How do you integrate the products and the experience – that recognize this consumer and their desire for ‘community’?”
The experience of touching and feeling a product is still essential for endemic gaming brands – specifically gaming gear like those of HyperX. “Events that draw a consumer to a physical place are great.” says Kelley, “However, having the ability to experience a product with real-time use (in gameplay, for example) and the ability to purchase it, that’s where retail over e-commerce has a tremendous advantage.”
So where do I start?
Understanding the gamer community, their values, and using that to create experiences that draw them into your retail space is key. Once there, just like any other demographic of consumers, they will see the brand and space catering to their lifestyle– gradually evolving you into their retailer of choice.
If you’re a retailer who’s been asking yourself the question, “How can we physically engage and connect with this digitally native community we know very little about?”, you’re not alone. Reach out to our team at Info@MG2.com, and we’ll help you take the first step in bridging the gap between your offering and this rapidly growing generation of consumers.