SPRINGDALE, Ark. -- Harps Food Stores here has begun testing a video rental concept it could roll out to its smaller units that are without rental.
The test began late last month at the Bull Shoals, Ark., store with a limited, 200-tape selection culled from a nearby store in Mountain Home, Ark., that has a full video rental department, said Randy Weddington, video specialist. The titles were put in at no additional buying expense to the chain and are being rented for $2.50 a night. It was too early to assess results from the venture.
The newest titles are six- to eight-week old tapes on which movement had slowed in the larger store, Weddington said.
With space at a premium, rentals are displayed on a unit that takes up only 2 square feet of floor space. Tape boxes are flattened and put into clear plastic sleeves for shoppers to browse through. "We will just rotate product out of the Mountain Home store and have no purchasing budget per se for Bull Shoals," Weddington explained.
If the program is successful, it will be extended as a satellite rental section to other smaller stores that are near the chain's larger video operations, he said.
"Basically, everything we take in there will be profit. If it works, I've got permission to roll it out to a few other stores. Ideally, I'd like to match up this kind of satellite with each of our full-fledged rental departments to help make their budgets go a little further," said Weddington.
Harps has a total of 41 stores and 20 video rental departments, including Bull Shoals. The Mountain Home department has about 7,000 rental units in 2,000 square feet.
The displays can hold up to 480 rental units. Because of the low volume expected, the store uses a paper-based sign-out system to track customer rentals, with no separate video computer. There are no dedicated video employees either, he said. The larger department functions like a rack jobber in the smaller store, Weddington said.
Bull Shoals is a community with a population of well under 1,000 and there is a video store next to the supermarket that carries just single copies of new releases, while charging $3 a night for rentals, Weddington pointed out. "So even if we bring in six-week-old stuff, there is still going to be a lot of unsatisfied demand in that town."
One challenge with satellite rentals concerns the retailer's arrangement with shared-transaction-fee distributor Rentrak Corp., Portland, Ore. Rentrak requires computerized tracking of its titles and has rules that make the transfer of such older titles to another store unattractive, he said. So if the test is successful, Harps may cut back on the number of titles it gets from Rentrak in the larger store. "Also, I've got the grosses up in the Mountain Home store to the point where I really don't need Rentrak as much as I once did to finance my purchase budget there," he said.
On another topic, Weddington said the used compact disc test program he is running in the Mountain Home store is going well. "At this point the used product they are buying each week is about equal to what we are selling. But we needed to grow and get a better variety than what we started out with anyway."