The key to success with preschool or so-called edutainment videos in supermarkets is understanding the dynamic behind them. It is a category designed to stimulate thinking among infants and toddlers by exposing them to a variety of shapes, colors and images.
Although every parent wants their kids to be as bright as they can be, some are more proactive about it than others. Hence, this is a category that excels as both a planned and impulse sale, sources told SN.
As the number, variety and quality of these videos increase, so does consumer interest. Since babies are babies, old titles never go out of style, but can remain vibrant sellers. They also lend themselves naturally to a variety of promotional and cross-merchandising strategies throughout the store.
"They do pretty well at sell-through," said Laura Fisher, video coordinator for Martin's Super Markets in South Bend, Ind., "although it really depends on the store location." Martin's relies on in-and-out shippers for sell-through titles, but does not maintain a section for this category in its rental department.
"In general, we don't have a lot of returns on them," she said. "Whenever we see something come across the desk where they have something like a variety pack, we'll bring them in. Other than that, we don't."
The store manager determines where to set up a display. "It really depends on what's on sale that week," Fisher explained. "If we have a baby display going on, then sure, that's a good tie-in."
"It's definitely growing," said Larry Balaban, executive vice president of Genius Products, Solana Beach, Calif. "I think a lot of people are jumping into it. Probably the biggest player in it is Baby Einstein. They did $165 million or so last year with videos, books and other licensed products."
Baby Genius currently has eight titles available. "It's a widely distributed product line," Balaban said. "Our stuff is designed to introduce children to the world around them by gently presenting them with images like animals in the San Diego Zoo."
Every Baby Genius video has numbers and letters integrated into it, "so we use that as a fundamental of education. We think that numbers and letters are always important elements to include. We also have life-sized characters and 3-D animation."
One title that Martin's recently carried in a 48-count shipper on the sales floor is "Baby Bach." Titles like "Baby Mozart" and "Baby Bach" are half-hour videos featuring baby-friendly visuals of toys, real-world objects and kinetic art. They serve as a playful, imaginative introduction to classical music. The Mozart video, for example, is reportedly based on research that shows a strong relationship between Mozart's music and the development of spatial reasoning and certain cognitive skills.
Fisher said these types of videos "actually do catch kids' attention with bright colors and sound. And I think they're doing a better job with them than in the past. I'm sure it does help them recognize colors and that type of thing."
"There are a couple of dynamics going on," explained Scott Guthrie, vice president, sales and channel development, Buena Vista Home Entertainment, Burbank, Calif., a Disney division that markets the Baby Einstein line. The category "actually was flat year to year in 2004, according to ACNielsen, Schaumburg, Ill. However, it's had tremendous growth. The compound annual growth rate from 1999 to 2003 was actually 12%, according to ACNielsen. In calendar [year] 2004, there were no new releases, just catalog extensions."
The other interesting aspect for retailers, Guthrie said, is that "this piece of business is profitable for the retailer. From a profit standpoint, it's one of the few areas that delivers a year-over-year profit margin."
Disney's Baby Einstein line added three titles in 2004, bringing the total to 14. According to Guthrie, Disney controls about 80% of the preschool category. "It's a great business that continues to grow year after year. In fact, our business grew 60% last year in this line alone."
"It's not a category that we do rental business with, but we do order them in many times," noted Sara Freeman, director of video for Tahlequah, Okla.-based Reasor's. "Most parents want to purchase them."
The chain, with stores in Oklahoma cities like Tulsa, Broken Arrow, Jenks, Owasso and Sapulpa, has done well with such titles as "Baby Genius" and "Baby Mozart." It does not, however, stock the videos. Rather, it lists available titles in its "entertainment update" publication and takes orders from parents. The videos are generally delivered within three days.
"Customers are aware that we can get them," Freeman said. "A lot of it is done through communication with the manager or the customer service person behind the counter."
Based on Reasor's experience with the category, she said, the preschool category "has a following, but I don't think it's anything that's growing rapidly. It has not been a real successful category for us."
Delta Entertainment, Los Angeles, has had "great success in partnership with ATA Retail Services, Hayward, Calif., in placing baby CD titles as a tie-in with the baby food and baby needs sections," said George Fiscus, Delta's director of grocery and drug sales. "Our Baby's First Classics series is performing beyond all expectations as an impulse purchase for our targeted shopper.
"The terrific thing about our customer base for this product is that you are appealing to a constantly changing group of shoppers. There are always new parents on the aisle shopping for their formula, diapers or baby needs," he said.
Providing an impulse purchase that satisfies their inherent desire to calm and educate their child creates a long-term relationship with the shopper, Fiscus noted. "Because the products are high quality and comforting or entertaining to the child, repeat business on other titles is strong," he said.
"I think the supermarkets are missing the boat on this," said Dennis Fedoruk, president and chief executive officer, Brainy Baby, Alpharetta, Ga. "Unfortunately, in our busy world -- and with all due respect to the buyers, who do a great job of bringing new items in -- this category is constantly on the edge of the radar screen. I don't think buyers are really aware that we're talking $800 million a year. I think if they knew the size and growth of the category, they would pay more attention to it."
The so-called edutainment category has "real staying power," said Fedoruk. He cited ACNielsen's numbers showing sales of more than $800 million a year. "And it's evergreen," he said. "There are 4.5 million babies born every year. The subjects we're teaching are the basics: the colors, the alphabet. Every new child who is born needs to learn those basics. This is a category that just won't quit." Indeed, each of the three titles with which Brainy Baby started in 1995 is still selling today.
"Moms and dads are looking for these products to entertain and, at the same time, give their kids an education," Fedoruk said. "If they can make it convenient where the shoppers are going every week, like in the supermarket, then they're going to have a lot of sales."