WEST VALLEY CITY, Utah -- Same-store increases in video revenues of up to 60% resulted when Harmons here committed a full-time video person and additional space to the program.
"The stores are all doing extremely well," said Wanda Munsell, video specialist. "They just created my job last year, and since then we have seen tremendous increases in rental revenues."
More merchandising and pricing consistency from store to store and more attention from company management have helped bring this success story about, she said. "We put up more signage for rentals that we didn't have before. We promoted. We have guaranteed availability on sell-through-priced titles," she said.
Guaranteed availability, where the retailer offers a free rental if the promoted title is not in stock, "has been very successful and contributed to the increase in rentals overall. It increased the customers' perception that we have more copies to offer, which makes them more interested in coming in and renting videos," said Munsell.
Even competition from a Blockbuster store in the same shopping center as the chain's best video department didn't make a difference, she said. "It didn't even faze us. When our customers are in here for groceries, it is just so much more convenient to come over here and pick up a movie than to go someplace else," she said.
"People who come to our stores have families, and we have family videos. So they are more likely to pick a video here than go to another store," she said.
Because of these stellar results, the retailer is devoting about 30% more space to the category, she said. In a new store opening this month, "it's probably going to be more than that," she said.
Sell-through is another component in the success story. Harmons offers the big hits sold from shippers at the checkouts, but it also has in-line sections of catalog product that boost margins. In one store visited by SN, the section was 20 linear feet.
The sell-through sections are planogrammed, offering product from Sight & Sound Distributors, St. Louis, and Family Media Group, Draper, Utah. The planograms ensure that fast-moving titles are replenished and the inventory is turned over every couple of months. Having the permanent sections also gives the retailer a place to put tapes once the shippers sell down. Harmons has a clean-floor policy and does not allow shippers any place other than the checkstands, said Munsell.
"We make more money on the catalog titles than we do on the big hits. These are classics that everybody wants as part of their collection. We change it every three months to keep it up-to- date," she said.
The turnaround at Harmons is especially dramatic considering "two years ago, Harmons was looking at whether they wanted to get out of video or get a racker," said Ron McMillin, executive vice president and general manager at Family Media Group. At the time, he was working for Sight & Sound.
"We presented them with a lot of the data on the benefits of video, about the customers who come in and buy other products, and the fact that they would rather have a video department for convenience versus other services. That's when they made the commitment to put Wanda in charge of video and to do what was needed. Now the numbers speak for themselves," he said.
"Video has been very profitable for us, rental and sell-through," said Munsell. "Plus it is just another convenience that we have here for the customers. We would be lost without video. The customers have come to expect it, so we have to have it now," she said.