PLEASANTON, Calif. -- Using a unique distribution plan launched last month, retailers are making room for a new line of educational tapes on the nation's space program. The line is exclusive to supermarkets and drug stores, and is sold through food brokers and manufacturers' representatives. The first tape in the 13-volume "Star Scouts Discover NASA" series from Gateways to Space here is off to a strong start, according to retailers contacted by SN. "This is great for us because we have something that the mass merchandisers don't have," said a video executive with a major chain in the Northeast. "There seems to be a lot of interest on the part of the customers," said Jan Winn, director of health and beauty care and general merchandise at Big Y Foods, Springfield, Mass.
While it is too early to measure the video's sales, Winn said, "the displays are getting picked off, so I would say that it is going pretty well."
The series features Apollo 12 astronauts Dick Gordon and Charles Conrad with a cast of seven children and computer-animated characters Cygy and Zendo, who come to Earth as stowaways. It integrates the entire cast in live action along with actual NASA footage. Eschewing traditional video distribution, Gateways to Space is primarily using food brokers to get the tape to market, said Lou Karabochos, president and chief executive officer. The promotional campaign keys Gordon and Conrad.
"This is the only video title we are selling, and we are
using brokers who call on retailers week after week. This cuts out the middleman, which is the distributor," he said. "There is a definite niche for a food broker to be involved in the video business," said Bob Bauer, partner in Bauer Long & Associates, Hayward, Calif., a food broker. "Because this video series is only available in grocery and drug chains, going through brokers that work closely with supermarkets makes a whole lot of sense," said Big Y's Winn. The brokers' field representatives are contributing to the title's success, said Harold Berthold, director of grocery merchandising at Food Emporium, a subsidiary of A&P, Montvale, N.J. "Their people are out in the field and they make sure that the product is up on display," he said. Instead of single-digit margins on the big event hits and 22% to 23% on other titles, retailers can make up to 51% on the "Star Scouts" tapes if they sell them at the suggested retail price of $14.95, said Karabochos. Most chains contacted by SN were selling the title between $12 and $13. "We can make more on this tape than on 'Batman Forever,' 'Apollo 13' or any of the others," said the executive with the Northeast chain. The unusual distribution strategy apparently worked. Gateways will ship over 1.7 million units of the title in a staggered release schedule, he said. This is a remarkably high number for an unknown title from an independent video company, industry observers noted.
Gateways has succeeded in selling the title into many of the biggest players in the supermarket business. This also is a notable accomplishment for a newcomer to the video business, the observers said.
Among the retailers involved are Lucky, Raley's, Albertson's, Stop & Shop, A&P, Big Y, Dominick's, Eagle Food, Kroger Co., Pathmark, Safeway, Marsh, Spartan, Bi-Lo, Fred Meyer Inc., Hannaford Bros., Nash Finch, Furr's, Schwegmann, Price Chopper, Seaway Food Town, Star Market Co., Food Emporium and Buttrey.
Drug chains taking in the title include Walgreens, Revco, Long's and Marc's. When the title is fully distributed, it will have been in 19,000 stores from about 600 retail entities, said Karabochos. "We sold most of the major chains in northern California," said Bauer. Early results were promising. "Stores I checked had sold about one-third to one-half of their shippers in the first four days. A few stores had sold out completely," he said. Some retailers decided to wait until "Apollo 13" sold down before bringing in "Star Scouts," said Karabochos. For example, Walgreens will bring in the title in January, while some Safeway divisions waited until Dec. 15. Pathmark, Revco and Marc's also waited until after the official street date, he said. But other retailers chose to cross-merchandise the two titles, he said.
Many of Big Y's stores are cross-merchandising the two titles, putting the shippers together on an endcap, said Winn. "The timing was marvelous because, with 'Apollo 13' coming to video, you have a lot of interest in the space program," she said. Cross-merchandising at Food Emporium depends on available space, said Berthold. "We try to keep the videos together." At the major Northeast chain, stores are being encouraged to cross-merchandise the "Star Scouts" tape with "Apollo 13" and a space documentary, said the executive. But that is a store-level decision.
Two former astronauts have been closely involved with the video's production, promotion and sales effort. Besides appearing on the tape, Gordon and Conrad have been involved in an extensive public relations effort that has resulted in stories in major newspapers, local TV shows and CNN. The two have made in-store appearances and visited retail executives as Gateways to Space made its sales presentations. Gateways to Space has a $3.5 million advertising budget for the title, according to the company.
The astronauts' involvement evidently had a big effect on retailers' decisions to carry the series. For example, Conrad visited Food Emporium headquarters about a year ago, but then the tape was delayed for technical reasons. "When it became available again, we jumped on it," said Berthold.
Gordon's appearance at a meeting of the Northeast chain helped to get store-level managers excited about the product line, said the executive. This is especially important for an unknown title. "The managers
go back to the stores, pass their enthusiasm along to the people who work for them, who in turn pass it along to the customers. That stimulates interest and sales," he said. At Bi-Lo, Mauldin, S.C., Marshall J. Collins Jr., president and chief executive officer, stepped into a meeting with the buyer to meet Gordon, said a Gateways spokeswoman. The astronauts have made appearances at Star Market, Kroger and Albertson's stores, she said. They also have appeared at regional dinners attended by retailers and food brokers, she noted. Retail executives have gotten more excited about this product than many other video products that have come out recently, noted industry observers. "I have a personal love for the space program and its history, so I was a little partial to the idea of being able to share that history in a fun kind of way," said Winn. "It's educational. It's entertaining. They are targeting five- to 12-year-old kids using state-of-the-art computer animation and actual film footage from NASA. Most parents have lived the space program, and now we want to share it with our children," said Winn. "Space is the No. 2 interest of kids in this country, second only to dinosaurs. So this series has the potential to do something," said the Northeast chain executive. The line's success "depends on the characters," he said. A second tape in the series is expected in February, said Karabochos, but this might change pending a cross-promotional agreement Gateways is working on with a major soft drink company. The company also is talking to a long-distance company about putting prepaid phone cards in the tape boxes. Five more tapes will follow by the end of 1996, he said. "We want to get all 13 tapes out and educate children in the United States and around the world about the American space program," he said. Gateways is looking at using its distribution system for other products, including "Doctor, Tell Me," which educates children about hospitals, said Karabochos. It is tentatively scheduled to be released next fall, he said.