Implementing video cross promotions at store level may be fraught with challenges, but retailers who do it successfully find incremental sales, increased traffic and heightened excitement.
The biggest obstacles to running a cross-merchandising promotion, as cited by retailers in SN's most recent State of the Industry report, were as follows: lack of time to coordinate with other departments, lack of follow-through at store level, getting other departments to give up display space and lack of support from suppliers.
However, retailers like Larry Hage, district manager and video buyer for Ray's Food Place, Brookings, Ore., are finding that the rewards gained from sell-through promotions outweigh any possible difficulties in setting up the program.
"We would never allow this to become a problem," said Hage. "Cross merchandising is just too valuable for such things to stand in its way. Many times we create in-store contests and reward employees who come up with the best ideas for cross-merchandising displays."
The two ingredients that make a cross-merchandising promotion successful are "a strong title and a partner that gets behind the video with rebates," he said.
Retailers have pointed to Nestle, Pillsbury, Nabisco and Energizer Battery as leading tie-in partners on video sell-through titles, saying they look for a turnkey marketing approach in cross merchandising where the offer is tied into the prepack.
But Hage said turnkey marketing is not essential in successful cross merchandising.
"We supply most of the creative work," he said. "The studios only furnish us with shippers and back cards. The consumers still have to go through the mail and rebate process." Ray's runs four to six cross-merchandising promotions a year and positions them as a convenience for shoppers.
Kathy Finley, video buyer at J.M. Bauersfeld's, Topeka, Kan., also does not consider it difficult to cross merchandise video effectively.
"We haven't encountered any real problems," she said. "Store management, in its quarterly meetings, makes it clear they expect cross merchandising from us. Cooperation is a must and it hasn't been a problem."
Finley noted that the studios furnish her with information about what display material is needed and how to order. "The result [of cross merchandising] has been increased sales for both departments."
Advance training is of "prime importance" in cross-merchandising follow-through, said Bob Gettner, video buyer and coordinator, B&R Stores, Lincoln, Neb. "We usually have to do cross-promotion training way in advance, work it all out at least 30 to 60 days ahead of time. Things change very rapidly in this business."
B&R is doing more video cross merchandising, Gettner said. "It gives us more exposure and increases sales."
"Cross merchandising is a challenge, but it can be rewarding," said Kirk Kirkpatrick, vice president of marketing at WaxWorks Video Works, Owensboro, Ky. "There are subjective values that are hard to measure. But the promotion doubles the ad budget, and when the video and the grocery product complement each other, it works to get people into the store."
Julie Macey, video department manager at Macey's, Sandy, Utah, also believes it is worth the time and labor to set up cross merchandising. "We do it all the time," she said. "Our racks are set up to cross merchandise. It takes time and it takes up space but it's worth it."
The Movie Exchange, Oaks, Pa., which supplies sell-through programs and is a leased-space and revenue-share operator, encourages its retailers to partner on cross-merchandising projects. "Some of the chains run an internal contest to create display material," said Brian Ward, director of operations.
Getting enough lead time is often a problem for supermarkets, he said. "Supermarkets can't react very quickly. From pre-order to street date, the time is usually six weeks. The grocery business works on a 12-week lead time. But studios want to turn it to video very quickly after the box office slows down."
"It just makes common sense to tie in with other grocery departments in a promotion," Hage said. "It pays off in increased sales as well as customer convenience, particularly for new video releases, where there is no profit."