SPARTANBURG, S.C. -- Community Cash is offering rentals of CD-ROM, or compact disk/read-only memory, software in three stores, said Jim Key, nonfood direct-store buyer.
The program includes 24 education, entertainment and information titles from Compton's NewMedia, Carlsbad, Calif. The products have been acquired on a pay-per-rental, shared-revenue basis from Supercomm, Dallas, through Community Cash's principal supplier, Selectrak Family Video, Hillside, Ill.
This is Community Cash's and Selectrak's first venture into a pay-per-rental program and is the first known offering of CD-ROM rentals in supermarkets in the Southeast.
"I don't have a crystal ball to tell you what this is leading to. But I think this is the cutting edge of a new format and a new form of entertainment," said Key.
The early results of the program have been surprisingly good, Key said. The stores are renting about one unit a day, he said. "That is saying something. This is rural South Carolina."
The CD-ROMs rent for $1.99 a day, which is a dollar more than Community Cash's regular offer of all video titles every day for 99 cents. They are merchandised on displays provided by Supercomm.
The pay-per-rental approach is well-suited for new technology products like CD-ROM because it minimizes the retailer's exposure, said Key. Under these programs, retailers pay a small amount to acquire videos or other software and then split the revenues 50-50 with the supplier. "It gives us an opportunity to test something that is totally new without a tremendous amount of risk. Our investment is not that much. It is a good joint venture between all three of us: Supercomm, Selectrak and Community Cash," said Key.
The retailer will roll out the program very selectively, said Key. "I don't think this is for every store that we have. If we select the areas demographically based on which ones have a concentration of home computers, I think it will work," he said.
Community Cash is the only chain Selectrak is doing the Supercomm CD-ROM program with, and it is only doing it because Key wanted it, said H. Paul Davidson, vice president and general manager at Selectrak. "He wants to test the waters."
The early success of the program in Community Cash's rural area surprised Des Walsh, vice president of Supercomm. "We're not sure how well it will do in a rural area because up to now our information has been that the greatest CD-ROM penetration has been in the larger metropolitan areas. However, if CD-ROM is to become a factor in rural areas, we would far prefer that supermarkets earn that business than see it go to video superstores," he said.