Spring will be a welcome relief from an especially cold winter in most parts of the country. But, as some big titles are released and the Easter selling season approaches, it will also be a welcome relief from supermarket video's slow period.
"It helps to bring us back from that lull that we get in February," said Laura Fisher, video coordinator, Martin's Super Markets, South Bend, Ind. "We don't do much with Valentine's Day. So it's really waiting from one big holiday [Christmas] to get to the next one [Easter]."
Chuck Porter, director of entertainment at Giant Eagle, Pittsburgh, said, "There tends to be good releases that time of year. There's no football and no baseball. The Academy Awards seems to generate some interest in video."
As a result, spring has traditionally been a strong selling period for video, according to retailers and other video executives interviewed by SN. So what do they anticipate happening this year?
"Although it's hard to gauge sales for upcoming months or seasons, we expect to have strong rental activity and -- with a good release schedule -- a consistent selling season," said Brenda Vanover, director of video operations, K-VA-T Food Stores, Abingdon, Va.
Porter of Giant Eagle predicted that it will be a good spring. But, typical of video, if the weather is great, business won't be.
Easter will create a strong sales surge at retail, said Bill Bryant, vice president of sales, Ingram Entertainment, La Vergne, Tenn. "Easter is a gift-giving time, and family entertainment always makes a great gift," he said.
Studio executives agree that gift-giving during the holiday would benefit video in many ways. First, for sales of DVDs, as well as for DVD players, which sold extremely well in the fourth quarter.
"Video seems to be the gift of choice," said Rodney Saterwhite, vice president, retail business development, Warner Home Video, Burbank, Calif. "In general, during the Easter time period, catalog titles experience a 33% lift. We are expecting catalog DVD to be especially hot this year. As a lot of those Christmas DVD players were for kids, the children's and family DVD segments should see a very significant boost in unit sales over 2002."
Kelly Sooter, who heads up domestic home entertainment at DreamWorks Home Entertainment, Glendale, Calif., said that a boost in video in the spring will be even stronger this year because DVD has taken off and there has been a resurgence in buying.
"What we find is that every year there is a lot of [DVD] hardware purchased in the fourth quarter," she said. "The aftereffects are felt in the first quarter. Now you're reaching a broader market [of consumers]. Now they are committed to the new format."
Video executives expect family and children's catalog titles to be strong categories in the spring, as they have been in past years. Studios typically release a major hit in one of those categories to tie into the season. "But any major G- through PG-13-rated title will perform well during this time period," pointed out Bryant of Ingram Entertainment. "Historically, family product has done very well," said Sooter of DreamWorks. East
er was always the No. 2 gift-giving time period after Christmas. You also have Mother's Day. I think DVDs have become a very popular gift. So DVD has entered that coveted item-to-give category of gifts. You'll see a lot of catalog such as 'Prince of Egypt' that really fits in well with the season."
At Martin's Super Markets, Fisher said, "We are a family-owned grocery chain, and that's what we promote. So family and kids' [video] do especially well in our stores."
While gift-giving at Easter and perhaps a late winter will surely help sales and rentals, executives agree that supermarket video is still a hit-driven business. In other words, nothing beats strong titles for stimulating traffic.
"The fourth quarter is by far our best-selling season," said Vanover of K-VA-T, "with the balance of the year heavily contingent on the studios' release schedule."
Retailers won't be disappointed, according to studio executives. They expect a strong February-April selling season with popular titles backed up by plenty of promotional activity.
"Last year, there were no titles streeting during this period with a box office of $80 million," said Saterwhite of Warner Home Video. "This year, we are expecting at least seven titles with box offices well above the $100 million threshold.
"We hope the wider DVD distribution titles like 'My Big Fat Greek Wedding' and 'White Oleander' will see significantly longer legs. Of course, 'Harry Potter and the Chamber of Secrets' will provide a great deal of DVD excitement," he said.
Sooter of DreamWorks agreed that there is "a tremendous line-up" of new products coming with great movies every month.
"That means a healthy theatrical business and a healthy flow of product that we haven't had in the past to the degree we have now," she said. "There's a lot of purchasing behavior going on. We move into February with 'Sweet Home Alabama,' 'My Big Fat Greek Wedding' and 'Road to Perdition.' Then more big box-office movies are coming." She is especially hopeful for one of her titles that is neither family- nor children-oriented, "The Ring." "We're trying to capitalize on the spring-break time period," she said. Supermarket video executives anticipate strong business from a wide range of titles. Porter of Giant Eagle looks for "Harry Potter" and "Treasure Planet." Bryant agreed with "Harry Potter" and added "Jonah: A Veggie Tales Movie." Vanover listed "8 Mile," "Red Dragon," "The Ring," "Maid in Manhattan," "I Spy" and "Die Another Day."
Executives are planning to boost these titles in-store with strong merchandising and cross-promotional activity.
"With grocery's renewed interest in video, especially DVD catalog, we hope to see quite a lot more non-new release cross-promotional activity," said Saterwhite of Warner Home Video. "There is far less price competition and more margin in DVD catalog. Therefore, there's more room to promote profitably. Mega-hit titles have always held their own in terms of in-store merchandising."
Vanover of K-VA-T said, "It is much easier to cross promote with other departments during this time frame. In order for us to successfully cross promote, we need a strong tie-in partner and enough lead time to put the promotion together."
Some of those partners are makers of brand-name colas, 12-packs in particular, according to Bryant of Ingram Entertainment. "It is always difficult to cross merchandise different categories due to the location within the store. However, colas continue to increase sales of video and DVD when offered as a free item with the purchase," he said.
For specific titles, Porter said Giant Eagle gets better results in the spring because there's more floor space available. As a result, it is easier to set up displays and do cross promotions.
Fisher said Martin's Super Markets will put shippers of cartoons on the main sales floor of the store alongside Easter displays. "A lot of parents are putting videos of cartoons in their children's Easter baskets instead of just candy," she said.
Those cartoon videos are likely to be VHS. While acknowledging the migration from tape to DVD, Bryant said many VCRs remain firmly entrenched in playrooms and children's bedrooms.
Vanover said that "a very strong demand for VHS continues in K-VA-T stores. But with all the new DVD players purchased for Christmas, we have already beefed up our copies on DVD."
Porter is also bringing in more DVD for sell-through in Giant Eagle. In rental, there's about a 5% movement toward more DVD, he said.
