Online resources are currently reporting on a new company program that’s taking place through GameStops all over the United States. Called ‘Circle of Life,’ the policy intends to discourage sales of unopened video game copies.
This program has reportedly led many GameStop employees to lie to customers about which games they have and don’t have in stock.
‘Circle of Life’ relies on quotas assigned to workers, which means that this problem is not a marketing strategy.
Instead, it is an extensive employee effort to avoid losing their jobs. The store forces them to keep up with selling quotas that favor purchases of used games, which means that sometimes workers will lie to avoid the sale of a brand new title.
How the new program affects GameStop workers
The policy gives every store a set of four quotas that they must fulfill at the end of the month. The shares have to do with GameStop products types. In essence, pre-orders, rewards-card subscriptions, used games, and trade-ins.
Management measures the first two quotas via the total number of transactions, and the latter two via the total revenue generated at the end of the month.
This policy means that if GameStop sets the ‘used games quota’ at 30%, and total sales for the month of January amount to $1000, then used game sales must amount to a minimum $300.
Stores have an obligation to meet these numbers, and the consequences of such a policy usually fall on the backs of sales personnel. Which is why some of them might lie to customers to get them to buy used games or issue a trade-in.
A ‘Circle of Life’ or just a vicious circle?
GameStop mostly relies on the sale of brand new games, which makes this a seeming strategy to try and advance some of their other programs for more revenue.
To meet the monthly percentages, workers make significant efforts to sell used games, as the brand new games practically sell themselves. Online news outlets have reported that some of them have received threats that include losing their jobs if they do not find a solution.
An anonymous GameStop employee revealed via email that they are telling customers they “don’t have new systems in stock so that we will not take a $300 or $400 hit on our pre-owned numbers.”
The ‘Circle of Life’ policy also extends to new hardware, which means game consoles and peripherals, also available as used products and for trade-ins as well.
Keeping up with the COL program quotas means that each employee will receive a percentage of success. If they meet two of the four types of sales, their success rate will be 50%, for example. Management currently asks workers to maintain at least 75% to continue working at GameStop.
Source: Kotaku
GameStop relies on PREOWNED product sales, not New. Profit margin on New Product is very small, compared to profit margin on preowned products.
Things that go without saying.
Yes. but the article says “GameStop mostly relies on the sale of brand new games”. So apparently it doesn’t go without saying for the author of the article.