Retailers are focusing more attention on non-theatrical children's video, mainly because it offers them profit -- which is something the big movie hits lack, they say.
"We are still competitive, but we don't have to feature the non-theatricals as a loss-leader. We'll make relatively no money on a 'Toy Story,' for example, because everyone down the street will be selling it at cost," said Shirley Decker, video buyer, Goff Food Stores, Haslett, Mich.
Goff Food Stores is making 20% to 30% margins on sales of non-theatrical children's product, according to Decker.
"Price is not that important for these videos," said Tammy DeCloedt, video supervisor, Martin's Super Markets, South Bend, Ind., which carries videos in 12 of its 14 stores.
"We try to be competitive, but I don't believe that someone who is in the store and sees we are 50 cents or $1 above a competitor's price will go someplace else to buy the tape. You have to make money somewhere," she said.
A higher margin can be made on titles such as Barney and Power Rangers, and other titles that aren't available through every retail channel, said an unidentified buyer at a Midwest chain.
Bill Bryant, assistant vice president, grocery and drug, Ingram Entertainment, La Vergne, Tenn., said there is no magic price point on such titles.
"You may be able to get a higher retail, maybe in the $16 range, on titles such as Aladdin or "The Land Before Time" because of customer expectations and perceived value," he said.
"Titles such as the Olsen Twins series fall into the secondary class of releases. That type of title may not be a blockbuster, but it can sell very well. Price point will play a big role in that sale," Bryant said.
Sales of non-theatrical children's videos are strong, said retailers. Among the top sellers expected for the fourth quarter are Barney, which continues to have longevity in this segment; Disney's Winnie the Pooh classics; the Olsen Twins; and the latest direct-to-video release in the Aladdin and "Land Before Time" series.
Decker attributed the sales increases of non-theatrical children's product to competitive pricing in the marketplace and the to fact that more people want to create a video library.
"Sales are excellent," commented Jan Winn, director of general merchandise and health & beauty care, Big Y Supermarkets, Springfield, Mass.
"We are selling more because we are putting in stronger promotions and bigger ads. Barney is doing some summer programs as well, which is a plus for us.
We have the entry boxes where consumers can win a Barney sprinkler that is tied into the videos," she said.
"We are probably actually selling more of the non-theatrical children's videos than we have in the past because we are carrying more, and ordering more for sell-through," said Bob Gettner, video buyer, B&R Stores, Lincoln, Neb.
Sales have not been quite as strong compared with rentals, but they are expected to pick up in the fall, he said.
"Rentals of these titles are still very strong. I think a lot of parents don't want to spend $10 to $12 on a 30-minute video. They would rather just rent it," Gettner said.
The video buyer for a Midwest retailer said his company is in the process of further developing its children's video program.
"We haven't really taken advantage of the Barney line and some other titles. We may go to the extent of bringing in tie-in merchandise, as some other retailers have done. We might consider bringing in some related merchandise for Aladdin. Depending on how that does, we may decide to do this on a more permanent basis," he said.
Here is what retailers said have been worthwhile investments that they've made in non-theatrical children's titles.
At Goff Food Stores, the best selling titles in this category are Barney and Winnie the Pooh, Decker said.
"Parents grew up with 'Winnie the Pooh.' The Barney people have done a great job of marketing. He is very visible and kids love him," she said.
"We do teaser ads for really big releases. We are always aggressive and competitively priced on the hot titles," she said.
"Some of that has to do with promotions we have done with The Lyons Group. They have provided us with some give-away items that have really impacted sales. We tried selling the Power Rangers videos quite a while back, but they didn't sell. It is a great rental line, but doesn't move as a sell-through,"he said.
"We have had Winnie the Pooh as an in-and-out promotion. We carry that type of item around the holidays."
Bryant of Ingram predicted that the new Aladdin video, upcoming Goosebumps releases and "Land Before Time IV" will be big sellers in supermarkets.
Trish Smilie, customer-service manager at one of the two stores operated by Steele's Market, Fort Collins, Col., said a 48-pack shipper of the Olsen Twins sold out within a week. "The $9.95 price point was right. Our store is in a fairly affluent area with families, and our customers tend to make impulse purchases," she said.
Last Christmas, old Disney titles such as the "Parent Trap" and "Homeward Bound" flew out of the store, she added.
The larger, newer store operated by Steele's Market, Fort Collins, Col., is currently sold-out of the Olsen Twins movie, according to Helen Poplett, customer-service manager.
"I have ordered a Scooby-Doo video and the third video in the Aladdin series. There are some other Disney titles available for sell-through, such as the "Absent Minded Professor," Poplett said. Since she has been heavily purchasing sell-through videos sales have been so good, that only on one occasion, did she have to return excess stock to the distributor, Poplett said.
The video buyer for the Midwest retailer said non-theatrical titles are carried on an in-and-out basis.
We just go for the big titles. Generally, it is obvious which titles will do best, especially if there is a new release from Disney," he said.
DeCloedt of Martin's said videos featuring Barney or the Olsen Twins still sell well, but the best-sellers vary by store.
With the broad selection of non-theatrical children's titles available at lower price points, some retailers are opting to merchandise secondary sell-through videos in permanent sections. Such titles have most often been treated as an in-and-out promotion at supermarkets.
"We are starting to see more interest in permanent sections for video in the supermarket," said Bill Bryant, assistant vice president of grocery and drug, Ingram Entertainment, La Vergne, Tenn.
Some supermarkets are considering a four-foot endcap that wraps around into a six- to 12-foot section of permanent video, he said. "That allows retailers to carry catalog video titles that are evergreen and are not as price-sensitive, so the margins are higher." Bryant also stressed the need to display these videos in a permanent area of the store where there is high foot-traffic.
"Too often, a display might get pushed into a corner, and that precludes any success the product might have," he said.
Retailers contacted by SN said shippers or movable racks are most often used to display non-theatrical children's videos offered for sale.
"First, we buy and display them in the manufacturer's shipper. They move better off of that, with 24-to-48 units on display, as opposed to putting them on a rack somewhere. After we sell off the shipper, the product is displayed on a permanent movable fixture," said Shirley Decker, video buyer, Goff Food Stores, Haslett, Mich.
"The supermarkets move it to different areas of the store. It does especially well near the holiday candy. We find that grandparents, aunts and uncles will buy the lower-end videos rather than candy. Also, the studios are getting smarter in their release dates, releasing more of the 30- to 45-minute video releases around the holidays," she added.
Bob Gettner, video buyer, B&R Stores, Lincoln, Neb., doesn't believe in merchandising non-theatrical children's titles in the permanent video section. "They will just get lost. They do the best for us when we display them on a shipper outside the video department, usually in front of the check-outs, where they have maximum exposure," he said.
Tammy DeCloedt, video supervisor, Martin's Super Markets, South Bend, Ind., uses permanent sell-through racks on rollers that can be moved around to different parts of the store.
Said Ron McMillin, vice president sales, western region, Sight & Sound, St. Louis, they have proved that a free-standing rack with different signage will sell 30% to 50% more videos.
"If the retailer puts the sell-through product on the wall with rental videos, he will not sell as much," he stated.
Yet another consideration to merchandising this product on a permanent fixture is the ability to sell not just major event titles, but two to three other titles that offer a higher margin, McMillin pointed out.