RIVERTON, Utah -- Using a planogrammed video section here, Peterson's Marketplace has found an effective and profitable way to do sell-through in a competitive market.
The one-store independent is moving about 25 to 30 pieces a week off a planogrammed rack, a dramatic improvement from a year ago when the video department took sell-through over from non-foods, said Annette Nielsen, video supervisor. At the time the retailer only carried sell-through video sporadically on an in-and-out basis. The program is supplied by Family Media Group, Draper, Utah.
Previously, "we didn't have the Top 10 display or FMG's planogrammed program," said Nielsen. "It wasn't going well because they (the previous supplier) didn't keep up with the videos. Now when I order, I have to order a lot, so it is going well."
The non-foods department didn't always stay on top of the previous video supplier. "If he didn't show up for three months, everything would still be sitting there. Nothing was ever changed. So it's doing much better," said Nielsen.
The two-sided 4-foot rack is supplemented by a counter display unit featuring the top 10 sell-through videos and shippers of the big hits. The sell-through product is located near a 500 square foot rental department carrying about 2,500 rental units. It is operated in-house. "A lot of people will rent something first and if they like it, and if we have it available, then they will buy it," she said.
The top hits are sold a dollar or two above the minimum advertised price, she said. "We try to price them so that they are still affordable, and so customers will think it is cheap enough to just pick it up here now, rather than running over to Albertsons or Hollywood," said Nielsen.
The combined program of carefully managed catalog inventory and convenience-priced sell-through results in good profits for the retailer, said Tom Freed, field sales for FMG. "They are doing a better job of selecting the titles, because Petersons is dealing with a company that will supply the number of titles that the customers want as opposed to somebody just bringing in the number of titles they want to leave," he said.
On the catalog rack, best selling titles are kept in stock and inventory is rotated every 60 to 70 days, said Freed. Nielsen places orders every Monday based on the planogram provided by FMG. "We make it easy because we give her a little locator map and help to service the store," he said. Every six weeks, FMG also provides the retailer with a "report card" that shows what the movement is per square foot, he said.
"Because of the tremendous traffic patterns, supermarkets have the opportunity to sell a lot of movies. But they want to sell something they can make a little money on," said Freed.
"With these titles supermarkets can make a better margin than they can with a lot of the other things they sell in the store. They don't have the time to research and evaluate all these titles. They want somebody to do it for them and guarantee it. We 100% guarantee all of our programs so the retailer never gets stuck with product," said Freed.
This is not close out product, he said. "We are putting in fresh new timely product that we are marketing for the first time, or product that has proven to be evergreen," he said.