Summertime means big fun, big box office, and big traffic jams as Americans take to the nation's highways, beaches, resorts and parks.
Now, whether it's with automotive DVD players or handheld models, consumers are taking their videos with them.
According to statistics released in March by Centris, Philadelphia, a consumer research and information service tracking home entertainment and technology, 20.5 million of the 80.8 million DVD-capable households have portable DVD players, up 83% over the previous year.
Increasingly, according to some, the DVDs that Americans on the go are taking along are their own. "I definitely think that DVD sales in general are different than what they were in the beginning," said Kenneth Bruce, director of grocery and nonfood programs for Martin's Super Markets, South Bend, Ind.
"It used to be that people would just rent them all the time. Now, I think because of the Best Buys and Wal-Marts of the world, most people tend to buy them. It's the same thing with games, and one of the reasons is that they have so many outlets in which to play them now," Bruce said.
The increasing mobility of DVD technology is keeping pace with summer travel, according to Joel Goldman, vice president of sales for Columbia TriStar Home Entertainment, Culver City, Calif. "Just the fact that there are so many different ways to watch a DVD helps the business in general. I don't think it's specifically a grocery phenomenon. The grocery business is growing at a faster clip than the rest of the business mainly because it's still a growth market for them, where in other classes of trade it's a mature market."
However, the fact that it is the supermarket channel that is in the growth mode "helps a lot," Goldman added, "because those are young families whom those [new technologies] affect more, and that's the grocery market."
While supermarkets may, by some accounts, have arrived late to the DVD party, they have arrived and are poised to take full advantage of this burgeoning trend.
DVDs are now growing faster in supermarkets than in other classes of trade, according to the Strategic Planner of ACNielsen, Schaumburg, Ill. For the 52 weeks that ended March 19, 2005, dollar sales of prerecorded video products -- DVD now represents the vast majority of these purchases -- were up 20.4% in supermarkets, compared to an 18.8% increase a year ago. Video generated over $418 million in sales in that period for the food channel. This is in contrast to a 14.1% increase this year for the combined food, drug and mass stores (excluding Wal-Mart Stores) to over $2.6 billion, and a negative 11.6% for drug stores to over $138 million.
The trend was the same with the units tracked by ACNielsen. Supermarkets were up 27.1% as of March 19, 2005, vs. 15.1% the year before, for a total of over 28.1 million units. Combined food, drug and mass stores (excluding Wal-Mart) were up 16.7% to over 183.7 million units, while drug stores declined 11.1% to about 9.7 million units.
Industry observers noted these increases could be attributed to supermarkets, which started late in DVD, finally catching fire with the hot consumer product, while other channels were gradually maturing in sales, or losing interest, as in the case of drug. Additionally, studios have put significant marketing pushes behind their supermarket programs, the observers added.
HOT RENTAL SEASON
From the hottest movie titles to cataloged classics, DVD sales and rentals are rising right along with the temperature in supermarkets nationwide.
"Everything rents in the summer," said Ray Wolsieffer, video specialist with Bashas', Chandler, Ariz. "I don't care what you put in, if it's reasonably decent as far as box office and who is in the movie, it's going to rent well. Obviously, certain movies will do well, like 'Meet the Fockers' -- it's a super hit right now and renting like gangbusters."
Summer is an especially good time for video in Arizona, Wolsieffer pointed out, for a very obvious reason. "It gets extremely hot here, and that certainly doesn't hurt people coming inside and watching movies instead of hanging outside doing stuff," Wolsieffer said.
Bashas' promotes its videos year-round with a host of giveaways. "We'll offer some specials when people rent," said Wolsieffer. "Say someone comes in and rents four or five movies in a given period of time. They're eligible for a drawing for a free pizza. At times, we'll also do offers where if you rent two movies on a particular day you receive a free box of popcorn." During the summer, seasonal treats like ice cream or candy may be substituted.
The added promotional effort is needed when business slows down. "You always have a week here or there when it's like, 'Good grief, they've got to put one better than this out!' But that's when the studios are putting out less exciting product. When they put out a killer product and two or three studios do it at the same time during the same period, then our rentals are much greater."
Wolsieffer regularly meets with studio reps to find out what's coming up in the way of video releases. "That gives me a heads-up as to what we can anticipate as far as certain ad items we may run with certain product," he said.
"For us, the summer means rentals happen later in the day, in the evening," said Greg Rediske, president of Video Management Co., Tacoma, Wash., a supplier of rental and sell-through programs in the Northwest. "Longer light and outside activities combine to make rental decisions occur much later, after 8 o'clock, usually. We encourage departments to stay open till at least 10, if at all possible."
Actual movie selections "follow along the patterns established at the theatrical level," Rediske continued. "'Popcorn movies' do best, as opposed to more thoughtful fare, which is better in those dreary winter days. You're looking at a lot of kids out of school, looking for activities, and movie watching is part of that. The teen action films do very well."
"DVD is a strong year-round category," said Lori MacPherson, senior vice president of brand marketing for Buena Vista Home Entertainment, Burbank, Calif., pointed out, "but we do see sales slow down somewhat from May through September." The reasons, she said, include anticipation and timing.
EYING THE HOLIDAYS
"Generally, supermarket promotes around holidays that are food-oriented," Goldman said, "so we tend to put in promotions that are geared toward a Memorial Day, July Fourth or Labor Day ahead of those types of holidays. We try and street a week or two before. We'll keep product out through those holidays, and cross promote with picnicky-type food items. We'll get involved with people like Coca-Cola, Sprite, those types of companies, and get a lot of front-of-store merchandising."
Titles to be promoted also relate to the holidays, he noted. "If it's July Fourth, we'll go with real heavy, patriotic types of movies. With grocery it's always going to be family-oriented or something that is going to skew fairly young. They're products that go well with flag-waving types of activities, and all three summer holidays are similar. The only difference with Labor Day is that we may have more back-to-school items. We'll try to get stuff that appeals to school-age kids."
But timing remains crucial. "If you miss August, you're dead," Goldman said flatly. "It's really your last shot because then you don't have another opportunity until you get ahead of the Thanksgiving time period."
From a theatrical standpoint, grocery "tends to be more hit-oriented than other retailers," Goldman pointed out, for the simple reason that "a lot of grocers don't have major video departments like a Target or a Wal-Mart does. With most grocers you're dealing with in-and-out types of promotions, you're utilizing cardboard and displays and stuff like that. And yes, as a result they tend to be way more hit-oriented than other classes of trade."
Columbia TriStar supports third-party product promotions, said Goldman, "making the promotions fun and summery, utilizing that front-end space and getting really, really creative." He also suggests grocers use endcaps to help "maximize the summer traffic, especially around the holidays."
Summer is also a good time to promote catalog, according to Goldman, "because when you get into the fourth quarter it gets really, really crowded with new releases."