BOISE, Idaho -- True to its reputation for staying ahead of the trends in home entertainment, Albertsons largest racker, Video II, Sandy, Utah, is rolling out a subscription rental payment method to all of its video departments.
Modeled after the successful online system for rental DVDs pioneered by Netflix, Los Gatos, Calif., the Albertsons approach allows customers unlimited rentals for $19.99 a month, said Glenn Dickman, president, Video II, which operates about 700 rental departments for the chain. Customers can take two DVDs or VHS tapes out at a time, he said. "We will probably have it in all the stores by the end of the year," Dickman said. The retailer now has about 100 stores using the payment method, he said.
No other supermarkets are known to be using such a system, according to industry observers. Other retailers that have subscription programs are the online division of Wal-Mart Stores, Bentonville, Ark., Walmart.com for DVDs, and Blockbuster, Dallas, which offers both online and in-store options for DVDs and video games.
The Albertsons stores have been testing the program for just under a year, Dickman said. As with all video programs implemented by the Albertsons rackers, this one has the support of the retailer's management. "We are excited about the technology and the choice it affords our customers, making their lives easier," said Mike Massimino, vice president, general merchandise sales, food stores, Albertsons.
Some in the video industry have expressed concern over the lost late fees with a subscription model, but Dickman said he expects that revenues make up for any such shortfalls. "We know that the percentage of customers that are subscribing makes it worth our while," he said.