Recent news hasn't been good for supermarkets: Studies show that shopping trips and customer satisfaction are down.
Many see entertainment-related products as a quick fix for shopper ennui. I've heard it often from those in the video trade. It was mentioned again during last week's Retail Conference of the Magazine Publishers of America, New York. The event was held in Phoenix.
Retailers should not overlook these categories. First, however, they should be confident of all aspects of their food retailing operation. Despite the availability of food products in other channels, the hallmark freshness, quality and selection of traditional supermarkets are their primary attraction to consumers.
That said, entertainment products, such as magazines, books and video, merit serious consideration by the grocery trade. I noted that the top supermarket in customer satisfaction in 2004, according to the University of Michigan study, was Publix Super Markets, Lakeland, Fla. This company truly excels in food, but also has a good selection of sell-through videos, books and magazines.
Another chain that combines high standards of food retailing with sophisticated merchandising of entertainment goods is Wegmans Food Markets, Rochester, N.Y. After sweeping all categories in MPA's Periodical Merchandising Excellence Awards last year, it was named last week the first inductee of MPA's Retail Best Practices Hall of Fame for its excellence in all phases of magazine and book merchandising. Wegmans also has a longstanding video program that includes sell-through, as well as rental.
The importance of entertainment products to the food shopping environment shouldn't be underestimated, especially as the periodical industry embarks on a three-year, $40 million promotional campaign aimed at building awareness and sales.
Cross merchandising is key to maximizing the value of these products in supermarkets. For example, during the MPA conference, I learned of an extraordinary opportunity that retailers will have next month to tie in the paperback release of "The South Beach Diet" with related food products, including -- but not limited to -- a new line of South Beach Diet-branded items from Kraft Foods, Northfield, Ill.
"When you can take the book and tie it into the food, and make it easy for the consumers to find and pick up, it could be a very substantial piece of business for us," Bryon Roberts, vice president, general merchandise, Bashas', Chandler, Ariz., told me during the conference.
"The release of 'The South Beach Diet' paperback at the same time that there will be a number of South Beach-branded grocery products creates a unique opportunity for cross merchandising," added Bill Bishop, president, Willard Bishop Consulting, Barrington, Ill., in another conversation at the event.
On another retailing front, the struggles of big video rental chains, notably Blockbuster, Dallas, have been in the news. This speaks to the high overhead these retailers are dealing with in a declining rental market. Online rentals are reportedly growing. Yet while rental is down significantly from its peak of several years ago, it remains a better-than-$8 billion business that is not going away soon, despite high-tech delivery challenges. As the video rental giants stumble, supermarkets have yet another opportunity to bring a high-demand entertainment service to their customers, and find ways to tie it to other products in the store.