Among other entertainment software formats being offered in supermarkets, video and computer games are the fastest-growing segments. For example, the Interactive Digital Software Association, Washington, recently announced that 1998 unit sales of video games increased 37% over 1997, while personal-computer game unit sales increased 18%. This amounted to record-breaking totals of $3.7 billion in video game sales and $1.8 billion in computer games.
"Game sales have rebounded impressively," said Jeff Rouse, vice president for interactive media at Ingram Entertainment, La Vergne, Tenn. "They're popping up everywhere at the magic price points of $19.99 to $24.99. They offer a great return on investment with the right depth of copy and proper space commitment in high traffic areas."
"We've been doing very well with video game sales," said Craig Hill, video specialist at Harps Food Stores, Springdale, Ark. "We're using locked spinner racks from Jack of All Games [Cincinnati], which has controlled our shrinkage so we can show a nice profit."
PC games, meanwhile -- along with other computer software -- have yet to achieve that broad acceptance. "Progress has been slow, but sure," said Ken Currier, chief executive officer of Expert Software, Coral Gables, Fla. "We supply a base of 1,000 grocery stores and supermarkets on a regular basis, with run rates equal to those of some computer stores."
Currier sees the growing number of installed PCs as a promising development. "Today there are many more middle-class families buying computers. They're a more casual audience; they're not making trips to the computer store. If they see a good supermarket display at an impulse price point, around $12, they'll buy it. We're especially successful here with entertainment product -- our 'Casino' title has been hugely popular -- rather than productivity software."
Productivity and other higher-ended software offer their own challenges. "There are only certain retailers capable of selling front-line product," said Rouse. "It takes experience and commitment. A store-within-a-store design helps. The goal is to get the customer used to seeing this type of product in a supermarket."
Another software supplier working to effect this change is Major Connections, Dallas, which services 1,800 stores, including 25 of the largest supermarket chains. "We're doing a lot to include software as a permanent category in supermarkets," said Margaret Pacheco, senior vice president for sales and marketing. "Not all stores fit the demographics for sell-through potential, but it's becoming more a part of the general-merchandise mix in forward-thinking chains, and part of the entertainment section in larger chains. We're moving it from an impulse purchase to a destination."
Audio books also offer extra sales potential. "Audio books can fit well into the supermarket entertainment mix," said Patti Whitehouse, sales representative for Landmark Audio books, Minneapolis. "Especially in video departments. Each extra product is an extra reason to draw in a customer."
"Including rentals and sales, audio books are a $2 billion industry," said William Anderson, sales manager for audio books at Ingram Entertainment. "Their audience is upscale and primarily female. Surprisingly, self-help and relaxation are the main sales categories. An unabridged Stephen King audio book at $60 doesn't fit into this environment."
This category is undergoing its own format change. "The product selection is growing," said Anderson. "First there was abridged, then unabridged, now CD. The bigger authors, like Grisham and King, will have unabridged CD versions as unabridged versions gain more acceptance."
Finally, a newcomer to this list of alternatives to video sell-through is the Divx disc, the controversial alternative to "open" DVD, which is making strong inroads into supermarkets. "We believe that Divx will certainly make sense in supermarkets when there's a large installed base of players," said Josh Dare, director of communications at Digital Video Express, Richmond, Va. "It will allow supermarkets to be in the rental business without the costly infrastructure to track returns, since the customer never returns it. It addresses the copy-depth issue in the most satisfying way possible: Supermarkets buy at wholesale, sell at retail, and order only what they need."
With all these products from which to choose, supermarkets now have more tools than ever to develop their own entertainment centers.