3. Introduce Variation on the Sales Floor

Iwata - Game sales floors are typically set up so that customers who have previously collected information in magazines or on home pages can go and purchase a game by name, so they weren’t designed for people to go looking through all of those shelves, find a game, and bring it up to the register - the fact is that even though the demographics were changing, the sales floor wasn’t.

Hatano - Exactly, so we experimented with the retailers who understood the results of the concierge program, to see how we could organize product to make it easiest for customers to find.

Iwata - And so it sounds like after you analyzed the concierge report, you took the opportunity to report your findings of just what was happening on the sales floor to the top people at some of the mass retailers.

Hatano - Yes. I didn’t just meet with the top, but had the opportunity to discuss various things with those representatives that were actually responsible for sales as well. At that point I had the opportunity to hear their thoughts on game sales floors, and they said that essentially a game’s sales spike on its release day, and then converge by tapering off afterwards.

Iwata - The people responsible for the sales floor said that their understanding was that lines form for a game on release day, and then they just sell the weekend after they’re released.

Hatano - Yes. Most of them felt that game sales were momentary - only customers that purchase in those patterns buy games.

Iwata - To put it in the extreme, they prioritized getting customers checked out as quickly as possible, that that’s the biggest service they could provide.

Hatano - On game sales floors that high operational ability of getting customers their product as soon as possible was demanded as a service to the customer. At Nintendo we have lots of products that continually sell, however it seems that there aren’t many people who realize that. So when I explained our current situation in conjunction with the concierge report, they were very surprised, saying “Oh, is that so? … Well then, I guess we need to change.” Furthermore, one CEO of a large home electronics retailer understood our sales floor proposal and flat out said, “Our way of selling has been wrong up until now.”

Iwata - That CEO heard what you had to say, actually went to the sales floor and clearly saw with his own two eyes that things were happening that way.

Hatano - Yes. And so we decided to cooperate to make the retail floor more customer-friendly, easy to understand the content of the software, given the fact that so the number of customers who just didn’t know were growing so fast.

Iwata - And so you started with a couple model stores, changing to a new layout and finding out how things would change by changing to a new retail floor.

Hatano - Exactly.

Iwata - So I’d like to ask the person handling the actual floors, Takeuchi-san - what were your thoughts when starting the model stores?

Takeuchi - We had 3,000 different data points from the concierge program, and after looking back on all of it, deducing just what kind of problems were present, we managed to mainly boil it down to two problems. The first was, “not knowing the content of the product”, and the other was, even if the product they were looking for was there, “not understanding how the shelves were organized.” Even if customers had an idea that the software they were looking for might be around a certain area, they still couldn’t find it.

Iwata - That happens a lot, where people just give up if they can’t find what they’re looking to buy. Actually thinking back on my own experiences, that’s happened to me quite a bit when trying to buy other products. And so, we found that that happens even more than we had envisioned.

Takeuchi - So at first we decided to change how everything was organized at the model stores, taking the concept of an “easy to understand layout” as our mission. As is the case at any game sales floor, generally the style is to have a row of shelves lined up, with the idea that customers should find what they want. That was the kind of environment we were in, so we paid special attention to make sure to clearly label that “this software category is here, this one is here.”

Iwata - And those categories need to be easily searchable for the customers, right? For instance, organizing in alphabetical order doesn’t make any sense for a game sales floor.

Takeuchi - Right, it makes no sense. So the concept we had was, as soon as you enter the most…

Iwata - Recommended product would be placed there.

Takeuchi - Right. Also, customers without much information on the product would be resistant to going to the back of the retail space, so also the idea that as you go further back we’d place stuff that those knowledgeable about games could spend their time examining. Additionally, making sure that places with commercials being shown would have that product lined up right there, and allocating an amount of space commensurate with the amount that a particular product sold for staple titles.

Iwata - You introduced variation into the sales floor.

Takeuchi - Right. In order to provide that variation, whether it be older software or a staple title, we said let’s line them up on the front of the shelf and play the promotional video on the monitor next to it. On the other hand, for software that only occasionally sold we just had one package, or in some cases proposed “book display”.

Iwata - “Book display” meaning that only the spine is visible, like a book shelf.

Takeuchi - Right. This may have been the first time a game maker proposed that book display might be OK.

Iwata - Even in the case of book display, if you have a nice variety of product, there’s a good chance that the customers that want that product would search for it, and you provided this variety in the sales floor so that when customers who wouldn’t know the product name came in they’d be able to come across the software.

Takeuchi - Yes. By doing that our intent was to make it easy for customers to search for product, and so we set up the model stores to see how it would go.

Iwata - And having actually tested with the model stores, how was it?

Takeuchi - We did the model stores tests from June to July of 2009, and one impression really stuck with me. The DS game “Rhythm Heaven Gold”（※5）was released in summer of 2008, and it had continued to sell fairly well, but at the store it was handled as old software.

Iwata - Because it had almost been a year since release.

※5 “Rhythm Heaven Gold” ＝A “feel the rhythm” game produced by Tsunku♂. Released exclusively for the DS in July 2008 and has sold an accumulated 1.86 million copies as of January 3, 2010. (Source: Media Create)

Takeuchi - Well, we had quite a few inquiries from customers looking for the game. So we allocated a whole lot of space to that title at one of the model stores, and that weekend it was sold out.

Iwata - That must have felt good.

Takeuchi - It did (laughs). Because of that I got to see first hand that even if it’s an older title, by giving the customers a proper chance to find it, product does indeed move.

Iwata - Hatano-san, I’m sure that retailers try lots of different things to sell product, but to put it the other way, I feel like games used to be a pretty lucky business, when you think about it - previously even if you didn’t do anything special, for some reason lots of customers would just accept it and buy them.

Hatano - Yes. Squarely talking about how product is organized, and thinking about the customer, I don’t think you have the same pattern for a full year. New product comes out every week, and new hardware is released once every couple of years.

Iwata - At that point new problems need to start being considered.

Hatano - As such, game makers need to propose what kind of sales floor would be the best for customers to understand their product and feel confident in purchasing it each and every time, and the retailers should research on their own what kind of characteristics separate customer demographics exhibit, and I think moving forward it will be absolutely necessary that we help.