Business people in the video home-entertainment field are likely to be on their way to Las Vegas now for this week's Video Software Dealers Association convention. And that includes a big batch of supermarket video people.
Supermarket video merchandisers face a host of new challenges that have surfaced in recent times, challenges that include new technologies, new distribution modes and, above all, increasing competition for both rental and sell-through.
Through it all, though, supermarkets' offer of video is holding up fairly well in the face of unrelenting change. According to SN's seventh annual State of the Industry Report, published in the April 13 issue, supermarkets' share of rentals through all classes of trade stands at about 15.6% now, a decline of about 0.5% in each of the past two years. The sell-through side remains at about a 12.7% share, which is about where it has been for each of the past two years.
Total dollars flowing through supermarket retail are increasing slowly. One reason is that many supermarket retailers have been able to increase rental prices. Rentals in supermarkets now average about $2.50, compared with $2.28 two years ago.
But the real question at this time is "What's New?" -- that is, what's ahead for supermarket video? As you'll see by looking at the reference box on Page 1 of this week's SN, that very question forms the basis of a lengthy interview with a panel of supermarket retailers. The resulting discussion forms the basis of a multipage Supermarket Video supplement.
Here, in the minds of the SN panel, are a couple of the big issues and opportunities facing supermarket video. Take a look at the supplement to see who's behind these opinions: Windows: "Pay-per-view windows affect our business more than we realize. I'd like to see at least 60- to 90-day windows on all rental-priced titles."
Total Store Synergy: "I'd like to have more department tie-ins, such as with bakery-deli. We've talked about some ideas."
In a way, the latter statement may contain within it the solution to many supermarket-video problems because it underscores the fact that a supermarket isn't a larger version of a video specialty store -- it's a lot more. It's the total entertainment source that offers full meals, snacks and beverages in addition to the home video. Playing on this strength is what will differentiate the supermarket from other classes of trade, and encourage long-term success.
Why isn't this seemingly obvious strategy more routinely followed by supermarket retailers? SN surveys show that lack of time for proper in-store execution is the biggest obstacle. Here's hoping that retailer executives won't give up on this effective marketing and merchandising tool and that suppliers will keep programs as simple as possible to aid store-level personnel.
By the way, if you're going to be at the VSDA event, please join SN editors and others for a presentation of video issues at the Supermarket Retailer Breakfast to be July 10 from 8 to 9:30 a.m. at the Las Vegas Convention Center, Room N242. For information, call the VSDA at (818) 385-1500. The event will be sponsored by Warner Home Video, the VSDA and SN.
