Retailers look to holiday sales of previously viewed tapes to bolster their sell-through profits.
Shoppers can expect to see this year's fourth-quarter theatrical hits, such as "Casper," "Batman Forever" and "The Santa Clause," merchandised as previously viewed as well as new releases in sell-through sections at some chains.
One reason is better margins, said Brad Kugler, president of Distribution Video, Clearwater, Fla., a wholesale distributor of new and previously viewed tapes.
"The margin on a previously viewed mainstream title may be 25% to 35% vs. 5% to 15% on a new sell-through title from a major studio," he explained.
"It may be a small business, but it is profitable," said Bob Tollini, senior vice president of marketing at Major Video Concepts, Indianapolis.
"It is hard for supermarkets to compete against Best Buy, Wal-Mart or Kmart for new video sales," he added.
Randy Weddington, video supervisor at Harp's Food Stores, Springdale, Ark., said that although the fourth quarter is generally good for sell-through, he is counting on previously viewed to boost his sales. He expects "Pulp Fiction" to be one of the strong previously viewed sellers this season.
"It is mostly the 'A' titles that people look for. We shrink-wrap our previously viewed. The price range is $4.99 to $9.99," Weddington said.
Megafoods Stores, Mesa, Ariz., carries previously viewed videos as a regular item in all 15 of its video departments, said Karl Ewert, video director.
The stores sell off former rental copies as previously viewed. The hot titles for the fourth quarter are expected to include "Casper," "Cinderella," "Pulp Fiction" and "Batman Forever," he said.
At the Boogaart Retail division of Fleming Cos./Scrivner Group, Concordia, Kan., about 75% of the previously viewed videos offered are recycled rentals and about 25% are bought from a distributor, said Matt Dillon, video director.
"In the fourth quarter consumers tend to focus more on the new titles. After the holidays we expect previously viewed to do well," Dillon said.
Brenda Vanover, video coordinator-buyer for K-VA-T Food Stores, Grundy, Va., said most people buy previously viewed videos for their own collections as opposed to purchasing them as gifts for others.
Consumer interest and awareness is such that customers will even inquire about specific titles becoming available as previously viewed, Vanover said.
Sales of previously viewed videos have been strong and consistent at Roundy's, Pewaukee, Wis., said Teri Severinson, manager of video services.
"We try to keep it simple. We ask that the stores have no more than three different price points," she said.
Also, Roundy's recommends that the stores display previously viewed videos outside the video department, which is usually an enclosed area, she said.
"Anytime we can get those videos outside the department, we will see a huge jump in sales," Severinson said.
At Nash Finch Co., Minneapolis, the previously viewed video business is growing, said Clifford Feiock, video coordinator.
"Basically, we are just selling off excess inventory of rentals. More people are getting used to the idea of purchasing used movies rather than paying a higher price for a new one," he said. The fourth quarter is good for sales of previously viewed videos at Food Giant Supermarkets, Sikeston, Mo.
"They fly out of the stores," said Donna Spencer, Food Giant's video buyer.
Kugler of Distribution Video noted that low-priced direct-to-sell-through videos or "B" titles that go direct to sell-through can affect sales of previously viewed videos if priced in the $9.99 to $14.99 range.
Some supermarkets carry previously viewed videos as permanent items, but more carry them on an in-and-out promotional basis in the fourth quarter, Kugler said.
