Retailers don't need a magic mirror to see what's coming in the fourth-quarter sell-through season. It will be the biggest of them all. Two megahits, "Snow White and the Seven Dwarfs" and "Jurassic Park," will lead the way with combined ad spending of about $150 million, according to industry sources. Another major theatrical hit, "The Flintstones," also has been announced for sell-through release, and "The Nightmare Before Christmas" will sell for Halloween and Christmas. Both will be backed by large marketing campaigns.
The result will be record sales, continued momentum for the fast-growing sell-through business and additional sales for secondary titles that piggyback on the bigger hits. "The way sell-through has been growing, and with these gigantic titles, I don't see how it can miss being the biggest sell-through season ever," said Bill Glaseman, video specialist at Bashas' Markets, Chandler, Ariz.
"It is going to be a monster," said an executive with a major Midwestern chain. Among other titles that have been discussed for sell-through release during the fourth quarter are "Black Beauty," "Lassie," "Speed," "Maverick," "Little Big League" and "Angels in the Outfield." Repriced rental titles like "Sleepless in Seattle" and "Rookie of the Year" also will fuel sales, as will movies released earlier in year for sell-through, such as "Mrs. Doubtfire," "The Fox and the Hound," "The Return of Jafar," "Beethoven's 2nd," "Thumbelina," "We're Back," "D2: The Mighty Ducks," "Batman: Mask of the Phantasm," "Ace Ventura: Pet Detective" and "The Fugitive." "The way that video has been going for us, there is no reason for it not to be the biggest fourth quarter of all time," said Gary Schloss, vice president of general merchandise at Carr Gottstein Foods, Anchorage, Alaska. "This whole year there has been one blockbuster after another coming out and creating excitement. So I'm looking forward to a banner year for video sell-through and rental," he said. Sell-through revenues are up 250% so far this year for Goff Food Stores, Haslett, Mich., and that's with a program that is just based on in-and-out shippers, said Shirley Decker, video buyer. "We've gotten smarter about what we are doing, but the studios have also helped by putting out a better selection for sell-through," she said. "When I first got into video three years ago, there was little sell-through except children's product," said Decker. But then came "Pretty Woman," "Sister Act," "Home Alone" and "The Fugitive," "and these have really helped the sell-through market," she said. "Everybody wants a video collection. Even though we sell previously viewed tapes and do well with it, people still like to buy the tapes new," said Decker. "There are people out there building video libraries of hundreds of copies of various videos that have come out over the years," said Schloss of Carr Gottstein. "As the price of video comes down, people would much rather have copies in their library. That was proven when 'The Fugitive' came out at a sell-through price earlier this year," he said. "The sell-through market is getting stronger and stronger all the time. We as retailers have got to take advantage of that opportunity," said Schloss. But will it be too much of a good thing this fourth quarter? "When you are bringing in so many of the A hit titles, you worry that your customer won't have that much disposable income available to spend," said the executive with the major Midwestern retailer. "I had to turn down quite a bit of product that was offered at the
[Video Software Dealers Association] show. Much of it had a reasonable chance of performing well in the stores, but you could have virtually 10 different shippers of major titles on your floor during October and November," said the executive. "We are going to have to match the aggressiveness of the studios," said Tim Harrison, video supervisor at Food Giant Supermarkets, Sikeston, Mo. "There's a lot coming out for sell-through, and it is going to take a lot to move it all." There's so much coming out in the fourth quarter, Harrison said, "that it makes me wonder if any of the studios are planning anything at all for January." One good thing for retailers is that there is so much coming out, few competitors will carry it all. "The customers won't see all of the same product in all of the stores," said Harrison. But with all the titles, returns will be a concern for Food Giant and other retailers. "The thing I would most look forward to is not having to send any of it back. I look forward to selling it," he said. The amount of sell-through titles has been increasing every year, "and every year we come across this same issue," said Louis Stinebaugh, director of general merchandise at Baker's Supermarkets, Omaha, Neb. "There are always titles that compete against each other, whether it be in the same genre, the same price range, or the same release date. But if we offer it competitively and the customers want it, they are going to buy it," he said. "We are going to plan as if this one is going to be the biggest and the best ever," he said. Cross-promotions involving other packaged goods items found in the supermarket "are a natural for us in the grocery industry," said Stinebaugh. Baker's plans to take advantage of these in its merchandising and promotional activity, he said. "We will have ads that cross-promote the products that the videos are associated with, and we will also carry through that merchandising at the store level. If there is more of it available, then we'll be doing more of it. We do it on each title that comes out," he said. Other retailers like Carr Gottstein plan to make an event of the fourth-quarter megahit sell-throughs. The chain will create large displays and make consumers aware of the rebate coupons tied in with the titles, said Schloss. "Coupons do draw people, because there are certain people who utilize and love coupons. But there are also people who will buy the products without the rebates," said Schloss. It's the display materials that Carr Gottstein will take full advantage of, he said. "The point-of-purchase materials that are coming out for 'Snow White' and 'Jurassic Park' are much greater than they were for previous new releases. We are going to utilize every bit of it in our stores," said Schloss. Harp's Food Stores, Springdale, Ark., also will go all out with displays for "Jurassic Park" and "Snow White," said Carl Johnson, video specialist. "We've got special POP kits in from MCA/Universal for 'Jurassic Park,' and we hope to see the same thing from Disney," he said. "A couple of our departments are going to be turned into Jurassic Park, so to speak. One of them will have an entryway like the one in the movie. We'll have a big push on it," he said. Like other retailers, Harp's will hold display contests for its store-level employees, he said. "They need to plan it out in time if they want to be eligible for the prizes," he said. Jim Rowland, director of nonfood at P&C Food Markets, Syracuse, N.Y., said he is looking forward to the Pillsbury tie-in with "Snow White" and the Jell-O tie-in with "Jurassic Park." "One complements the other," he said. On "The Return of Jafar," the stores merchandised shippers of the video near displays of the related Pillsbury products, he said. These cross-promotions do well because the mail-in rebates are substantial, noted Lannie McDaniel, general merchandise buyer at Horner Foods, an independent based Tulsa, Okla. When a product has a small rebate, "by the time you put a stamp on it, it's not worth anything. But $5 definitely catches your eye," he said. "The backing of these branded items really helps support the video program and it's a value to the consumer," he said. This year's crop of tie-in partners is a good one, said the executive with the Midwestern chain. "We are doing a lot with the Duracell batteries and 'The Nightmare Before Christmas' in our Halloween ad. Then 'The Princess and the Goblin' and Hershey's fit right in with our candy ads," said the executive. "In addition, Pillsbury did a fantastic job with 'The Return of Jafar,' and they've got some good product tie-ins at the right time of year for 'Snow White,' " said the executive. Many retailers took advantage of the Nestle tie-in with the theatrical release of "The Lion King" earlier this year. "We really went all out," said Marge O'Neil, corporate secretary at O'Neil's Markets, Tacoma, Wash. "We bought the stuffed animals and the candy bars, and had a 'Lion King' ad. We'll do the same thing for 'Jurassic Park' and 'Snow White."'
Not all retailers share O'Neil's enthusiasm over cross-promotions. "For our company, it doesn't mean a thing," said Decker at Goff Food Stores. While Goff's video ads will have the logos of the tie-in products, that's as far as the retailer will go. "It's nice for the customer, but we really do not cross-promote," she said. " 'Jurassic Park' and 'Snow White' could come out with a generic box and it wouldn't hurt us. They sell themselves," she said. But the cross-promotional activity will help lesser-known titles, like "The Princess and the Goblin," Decker noted. Some of the sell-through titles are cross-promoted with other videos -- consumers can get a mail-in rebate by buying the featured product and one other from a select group. Glaseman of Bashas' said the cross-promotions with other video titles work better and the retailer will have all the products available. "If our plans gel the way I hope they are going to, we will stock the [other titles] if we don't have them already," he said. Harrison of Food Giant agreed. "I think it interests the customer more. They are already focused on video, and that gets them refocused on another video," he said. But on the other side of the question, Rowland of P&C noted, "whenever we get a tie-in with the food companies, it seems to do better." P&C doesn't stock that many of the other video titles, and "any of those that are tied to a grocery manufacturer helps us on the supermarket end of the business," he said.
HOT TITLES FOR THE 4TH QUARTER
Supermarket executives are predicting this year's fourth quarter to be the biggest ever, with popular titles and classics hitting the market all at the same time. Besides the proliferation of heavy-hitters, there are many promotional tie-ins to add extra sales impetus.