Give us simpler rental buying programs is the message from the participants in SN's video roundtable.
Any program that involves returning tapes is likely to be unworkable in the supermarket environment, they said. The programs that work best are the ones that offer a straightforward approach, such as buy-two, get-one-free. Even better, said the retailers, would be across-the-board lower pricing.
"How would I like to see them change? Revert to a single price for everyone. That would be fair and it certainly would be legal," said Bill Glaseman, video specialist, Bashas' Markets, Chandler, Ariz.
"The straightforward programs are the best, because they are the easiest for me, and I am the one who has to the figure these programs out. Also it is easiest for our stores," said Laura Fisher, video coordinator/merchandising associate, Martin's Super Markets, South Bend, Ind.
"I especially like the free programs and the discounted ones," said Bob Gettner, video buyer/coordinator, B & R Stores, Lincoln, Neb. "There is too much involved in some programs just to figure out what you are going to get and what you have to do to get it," he said.
"As for the programs that require us to return the tapes, we really can't participate," said Darlene Kiefer, services coordinator, Seaway Food Town, Maumee, Ohio. "We tried it with
SuperComm, but there are just too many places for the return process to break down."
Here's what the retailers on the video roundtable said about the rental buying programs:
SN:Which buying programs have worked best in supermarkets, which have not worked and how would you like to see them change?
FISHER: The best was PolyGram's buy-two, get-two-free program. We liked that.
The straightforward programs are the best, because they are the easiest for me, and I am the one who has to the figure these programs out. Also it is easiest for our stores. The other programs get confusing.
SN:Does that have to do with getting stores to cooperate on the return policies of some programs?
FISHER: We don't have the labor to participate in the lease programs because they do require us to send the tapes back. That's what makes me think the programs are more designed for the big chains, because all they do is video. The biggest thing we do in our stores is groceries. The smallest thing we do is video. So if it's between using our labor to sell groceries, or to send back movies, which do you think we are going to choose?
SN:So that would apply to the lease programs and the shared-revenue programs, any that require you to send the movies back?
FISHER: Exactly. However, when we tried SuperComm, video departments were doing very, very well, and we could afford the labor to send those movies back. But its just not like that any more.
SN: When did that change?
FISHER: I would say about two years ago and it has been going downhill ever since. We have every rental competitor in the industry in this area surrounding our video departments. And when they came in, they came in fighting with the low prices and everything else that we can't compete with. That took a lot of our business away.
GLASEMAN: The simplest and best program so far seems to be Universal's program, where you buy-five, get-two-free, buy-seven, get-three-free, and so on. That type of program doesn't force you to buy a lot of extra copies that you don't want, don't need, or can't afford because of your budget. The lease programs are really big problems for us, and we tried one. We'd lease something and then I'd have to go to all of my stores to try to pick them up. When you figure all the costs, it doesn't save us the kind of money that it would appear.
I track the copy-depth programs and in two cases out of three so far, we didn't make our money back. We'd put out more titles, but each one rents less, and we didn't get the proper turns on our rentals. Another type of program I don't like are the ones that give us the "privilege" of buying more once we reach a goal, which in most cases is unrealistic. Now, how would I like to see them change? Revert to a single price for everyone. That would be fair and it certainly would be legal.
SN:The studios created the buying programs because they were afraid that if they just cut the prices, retailers would not buy proportionately more and they'd make less money. If the prices were cut in half, would you buy twice as many?
GLASEMAN: No. I would not buy twice as many and I realize that is a question the studios ask. Obviously, if they have a lower price overall, and a dog of a movie comes along, I don't think I would want to put it in because I wouldn't get the rentals out of it. But if it were a strong title, I would certainly buy more. I wouldn't be able to buy twice as many, but I would buy more and it would keep a lot of people in business. That may be something the studios have to address also because they are certainly losing their buying base.
KIEFER: We like programs that use reasonable goals. Too many times they will set a goal based on a previous title that we brought in. On that title maybe we were forced to reach a certain goal and when we look at the return of investment on those goal-setting titles, it's just not there. So we would like to be able to negotiate with the studio and say, "The title that you gave us as a goal didn't make it for us with those numbers." Let them adjust the numbers a little bit.
As for the programs that require us to return the tapes, we really can't participate. We tried it with SuperComm, but there are just too many places for the return process to break down.
GETTNER: I've only done two programs. We have tried the leasing program and that just didn't work out for us. Since we have so many locations, it's really tough to coordinate with all of the people I work with to make sure that the returns are tagged the way they are supposed to be, and that they are sent back in a prompt, timely manner. We were lucky to make our money back on the leased titles that we had. The other type of program we have tried and still use whenever we can do it within our budget, is the buy-so-many, get-some-free, or buy-so-many, get-some-at-a-discounted-rate. There's a few times that we will stretch it a little bit, but not too far because then it just doesn't pay. We don't do revenue-sharing programs.
SN:How would you like to see the programs change?
GETTNER: I especially like the free programs and the discounted ones.
There is too much involved in some programs just to figure out what you are going to get and what you have to do to get it. It's just outrageous. The programs that set goals based on past purchases are too complicated.
