HOUSTON -- Randall's Food Markets here last month used a pay-per-transaction, shared-revenue program to launch what some industry observers believe to be the biggest rental promotion ever by a supermarket chain.
Randall's brought in a massive number of copies from Rentrak Corp., Portland, Ore., of FoxVideo hit "The Beverly Hillbillies." The heavy promotion campaign included print advertising and in-store signs, featuring a "Guaranteed to be here or rent for free" theme.
Executives from Randall's and Rentrak would not divulge exact numbers, but local observers spotted 100 to 200 copies of the rental title in Randall's stores. The promotion was chainwide, in all 50 of Randall's stores with video rental departments. It was not done in the Tom Thumb chain, which Randall's owns, and which also is testing Rentrak.
Randall's is known for its aggressive and creative video promotions, and this one was among the chain's best, said Dorothy J. Jones, buyer and merchandiser of service center-video. "We did it to create excitement, to make noise and to bring attention to Randall's," she said.
In one store, employees dressed up as hillbillies from the Wednesday, April 6, release date through the weekend. Prizes were given for the best costume. Rental activity in that store was heavier than in other stores during that time period, Jones noted.
The promotion "did what we wanted it to do. It brought people into the stores, often just to see if they could get a free rental," said Jones.
Despite having bought about six times as many copies of the title as she would have otherwise, the retailer did run out of tapes in some stores and had to give away free rentals, she said. "But that was good too because it made the customers happy," she said. The
title rented for the chain's regular new release rate of $2.50 a night. "This was the biggest rental promotion in the history of the supermarket video business, at least in terms of copies per store, total turns on the titles and the gross rentals," said Andy Miller, national sales manager of Rentrak's supermarket division. "Nobody has ever done anything like this."
There were three ads in Randall's circulars and five run-of-press quarter-page ads in the Houston Chronicle, said Miller. FoxVideo also is running radio ads to support the title, he said. The promotion included a special standee display from FoxVideo and a door-hanger campaign for households within a one-mile radius of the stores. A sweepstakes offered a free trip to Beverly Hills, said Miller.
"The objective of all the advertising was to send a signal to everybody in Houston that Randall's is a new release resource," he said. The goal of the in-store signs hanging from the ceiling in the main shopping area "was to get people who normally don't rent movies at Randall's to start renting."
The stores created special displays in the video departments, often on an endcap, he said. The movie was played on store monitors in some stores, and music tapes from the movie were played in the video checkout area of others.
"The Beverly Hillbillies" got poor reviews, but earned $42.2 million at the box office and has been a strong rental performer. "It's a good supermarket title that appeals to all family members," said Jones.
The company is testing pay-per-transaction programs from Rentrak and Supercomm, Dallas. It also has done guaranteed availability promotions with Supercomm on a more limited basis.
The opportunity to get the title from Rentrak made the promotion possible, she said. "We were able to purchase more copies at a lower cost, and there was less risk," she said.
With pay-per-transaction, shared-revenue programs, retailers pay a $7 to $12 fee to acquire a tape, and then share the revenues 50-50 with the supplier. Otherwise, retailers pay about $60 to $70 for a new release tape they would own. Transactions are tracked electronically.
Jones was once skeptical of the value of such programs. But now, "I can see benefits to them that I hadn't seen before," she said. She would not comment on the retailer's plans for the programs.
The programs allow her to order significantly more titles than she would have otherwise, and Jones takes full advantage of this. "I blow their minds every time I order movies. I experiment a lot," she said. The results have been "pretty good," she said.
"To bring in these kinds of numbers through standard distribution would be a physical impossibility," said Miller. "Rentrak allows supermarkets to use the inherent strengths they have as marketers. That's what it's all about."