Catalog titles in the home video sell-through market appear to be a strong and growing phenomenon, but supermarkets are finding that success in this category depends on intelligent buying and clever marketing.
For the upcoming fourth quarter, many retailers agree that catalog releases can make for potentially lucrative gift sales. However, such older titles, while often smartly packaged as special collections, run the risk of being buried under the video avalanche of heavily promoted, recent theatrical blockbusters.
"We keep a rotating supply of repriced catalog titles in our racks," said Rick Ang, buyer for Video Mart, which services video departments of 17 Bel Air Markets stores in Sacramento, Calif. "We also have some permanent displays, which is where we put most of our catalog product."
Ang pushes catalog aggressively at holiday, but it remains a hard sell.
"We fill up the racks with catalog during the holiday season," he said. "But this category really does suffer during fourth quarter. There's so much 'A' product coming out at sell-through that catalog gets squeezed. What we normally do when it gets close to Christmastime is try to get as many of these low-priced catalog titles as we can and sell them well under $10. We hope that they'll appeal to consumers as a last-minute gift item. They fly out pretty well."
Fourth-quarter catalog performs respectably in sell-through for Fuller's Supermarkets, Greensboro, Ala. "It usually does well for us, especially Disney," said the chain's chief executive officer, Mike Fuller. Fuller's devotes about 800 square feet to video sell-through. Pricing is based on "the [star] names that are in the videos, and the popularity of each title."
Holiday is a feast for previously viewed catalog at O'Neil's Markets, Tacoma, Wash. "I pick up at least 50% more sales for that quarter than any other," reported Jerry O'Neil, vice president. "I carry mostly repriced hot rental titles. They sell well, as does most of my video. I get a lot of consumer requests for used titles to purchase."
Catalog has yet to prove itself in the 22 supermarkets of the Concordia, Kan.-based Boogaarts retail division of Fleming Cos. "It hasn't been very good, so we don't get too heavily into it," said Matt Dillon, video director at Boogaarts. "Although sell-through naturally does better at fourth quarter, particularly the classics, Christmas products and Westerns."
Selection is the key, according to Kirk Kirkpatrick, vice president of marketing for WaxWorks Video Works, Owensboro, Ky. The firm distributes videos across the Midwest, with several grocery chains among its 3,500 accounts. "There are so many titles that are being repackaged, repriced and regrouped in gift sets, it's confusing to most retailers in terms of what will and won't move," he said.
"The challenge is to pick the right ones. Working with the studio and your distributor in making your decision can make the difference between what will and won't work. Intelligent purchasing is important. It's a real art."
The coming holiday onslaught of titles like "The Lost World," "Batman & Robin" and "Men In Black" threatens to leave catalog in the dust, so store placement is crucial to giving it a fighting chance, insisted Kirkpatrick. "With all the hits coming out, floor space will be at a premium. It's very competitive. I know people who last year brought in 'It's A Wonderful Life' and didn't sell many. But it was over there in a cardboard rack behind the milk department instead of packed up high as a big event. Merchandising and marketing play such an important role."
Kirkpatrick believes that supermarkets who seek out the floor space for catalog titles will benefit in the long run. "Grocers were the first to learn that, as true mass merchants, you need to make an impact. Rather than simply having a rack of many different sell-through titles in the their video departments, most grocers will have better success by making a stand somewhere else in the store, making that impact, and backing it up with advertising. It's a minefield out there, but opportunities do exist."
Creating a theme is a great way to beat the drums over catalog titles or special collection releases, noted Video Mart's Ang. Every year, Bel Air Markets launches a "Hot August Nights" promotion, whereby each of their grocery outlets is decked out in 1950s decor. "Right now we're doing an Elvis Presley promotion with his catalog titles," said Ang. "This ties in with the anniversary of Elvis's death. You get a better response to a catalog title when it's themed around something."
Traditional family and Western catalog titles seem to be the most in demand from supermarkets, according to Monte Deere, president of Video III, Salt Lake City, which racks video departments at the Lucky Stores, Safeway and Buttrey Food & Drug Stores Co. chains. "We have grocery video departments that are considering trying the better selections in this category," he said. "But we're not looking that seriously at them. Whether it's Alfred Hitchcock, Jimmy Stewart or Amos & Andy, there's a real question of whether some of these collections are going to sell. Packages of old black-and-white sitcoms are coming out, but I don't know how well they'll do."
"Catalog is a very viable business," said Wayne Mogel, president of home video distributor Star Video Entertainment, Jersey City, N.J. Supermarket response to the category is "a little spotty. But as more and more catalog titles come out and the market increases, I think the supermarkets will start to bring in more."
The branding of this product on the part of studios is commendable and helpful to the retailer, Mogel pointed out. "MGM and Fox are two that have really put their money where their mouth is and stepped to the plate when it comes to marketing these items."
MGM's James Bond series and FoxVideo's "Star Wars" represent two successful catalog franchises, said Des Walsh, vice president and general manager of SuperComm, Dallas. "These titles are being re-released primarily for sell through with great success," he said. "'Star Wars' has actually caused everybody to go back and review their libraries. Several more studios will follow suit because it's being recognized that if you brand market a group of titles as collector's editions, you'll find an audience out there."