BEDFORD HEIGHTS, Ohio -- Riser Foods here plans to install seven more Movie Market video departments in the next 18 to 24 months as it expands its Marketplace format stores. The next one opens on March 13 in North Royalton, Ohio.
The Riser video program is run by Supermarket Video Inc., Encino, Calif., and the results so far have been up to expectations, said Phil Arnone, senior vice president of merchandising and procurement. "We're always assessing and reassessing what we've done and where we are going with it. But so far, so good," he said.
"We try to make the Marketplace stores a one-stop, complete shopping experience for our customers," he said. The stores also include in-store banks, walk-in beer coolers, book and magazine sections, travel agency desks and a food court. "Video is part of it."
SVI now operates four live-inventory, store-within-a-store video departments in Riser stores on a leased space basis. The sections have about 4,000 tapes in 1,200 square feet.
The new departments will be operated by SVI and will be similar in size and presentation to the existing ones, said Arnone. The SVI program "has done every-
thing we expected it to do," he said.
The departments include rental and sell-through video, and video game rentals. There is a heavy emphasis on new releases. SVI is supplied by pay-per-transaction, shared-revenue distributor Rentrak Corp., Portland, Ore. SVI's parent, Culture Convenience Club, Tokyo, is the world's second biggest video retailer, after Blockbuster, and has a financial interest in Rentrak.
With pay-per-transaction programs, retailers can obtain tapes for a low price ranging from $8 to $12, and then share half the rental revenue with the supplier. Retailers who use pay-per-transaction
have said it allows them to bring in more copies of the top hits and a wider selection of new release B titles. Transactions are tracked electronically.
SVI also operates three "Videos & More" rental departments for Ralphs Grocery Co., Compton, Calif. The Ralphs departments are physically similar to Riser's, as is the pricing. Overnight rental rates for new release and games are $1.99, while catalog titles go for 98 cents for five nights, an offer that is promoted in-store with signs and handouts.
While Ralphs is retrofitting video rental departments into existing stores, Riser plans only to put them into its 70,000-square-foot Marketplace format in the future. Some of these will be remodels while others will be replacement stores. Two of the existing rental departments are in Marketplace stores, while the other two are in a recently remodeled supermarket and a Jax deep-discount general merchandise store.
"Any place where we open a Marketplace, we will include video," said Arnone. Smaller stores do not have sufficient space to justify video, he said.
Riser had previously tried a rack-jobbed program with a much more limited selection and it did not work out as well, he said. With video, "you need to make a complete offering. You need to carry a good selection of movies, with all the new releases and the library that makes up the rest of the presentation," he said.
The retailer had considered making the investment in a video program where it would own and operate the departments, he said. "We didn't think we were ready for that, but who's to say we won't do it in the future. Anything could happen, but we are happy with SVI," he said.
Of all the vendors Riser dealt with, SVI "came closest to what we thought a video department should look like. So we let them do it on a partnership basis," he said.
SVI owns and operates the departments, but "we have influence over what happens in it," said Arnone.
Arnone is watching the development of the proposed in-home, video-on- demand systems. "I'm not to the point of real concern. Somewhere down the line, something is going to happen. But one way or another, I think video will still be there. It will always be the low-cost alternative."
"If video doesn't work out at some point in the future, we'll just put something else in," he said.
Riser is now looking at other entertainment software products, and may soon put budget computer software in, said Arnone. This would not be part of the SVI department, but would be handled by Riser's general merchandise people, and merchandised with the books and magazines, he said. The company also is considering carrying audio books for sale.
In computer software, the retailer plans to start out with educational products for children and then expand its offerings. "We think there is a future for it because more people now have PCs in their homes. They have to buy software somewhere," he said.
Riser groups all these entertainment-related products together in the Marketplace stores. In the two stores now open, a travel agent's desk also is located nearby.
"It's a leisure products area that consumers enjoy browsing in at the end of their shopping trip," said Arnone.