Cross-promotions of sell-through videos with other products sold in supermarkets are proliferating at a rapid pace. Manufacturers want to tap into the magic of Hollywood to promote their products, while the studios embrace the trend as a way to economically extend their marketing reach, observers said.
While definitive information on the number and extent of cross-promotions is hard to come by, retailers said there will be more video marketing programs tied-in with other supermarket products this fourth quarter than ever before. Plus, retailers told SN, cross-promotions are getting better. They are more sophisticated, there is more lead-time and there is improved coordination between studios and tie-in partners.
"The studios are doing more and the supermarket industry welcomes this," said Cecily Durrett, spokeswoman for Food Lion, Salisbury, N.C. "They are in categories where we already enjoy market share. So they help everybody sell more product. The level of sophistication is growing on both sides of the fence."
This fourth quarter, the video cross-promotions -- particularly with the five "Toy Story" tie-ins -- "are much better suited to the supermarkets than they have ever been before," said Brad Ufer, video merchandiser at Coborn's, St. Cloud, Minn.
"The studios and the people they have aligned themselves with are doing a much better job of coordinating their efforts for their mutual benefit," said Ufer.
A video executive with a Southwestern retailer, who asked to remain unidentified, agreed that preparations for the "Toy Story" promotion have been going very smoothly. "Our Disney rep has been on top of this from the beginning. He has been working in concert with the other promotional partners and they have been eager to participate as well. From all sides, the effort has been really exemplary," he said.
"We haven't been into cross-promotions much in the past," noted Randy Weddington, video specialist at Harps Food Stores, Springdale, Ark. "But with the advance notice that we had on 'Toy Story' and the excellent cooperation that we are getting from our Disney sales rep, and from all the rebate partners, I think we are putting together a first-rate cross-promotion," he said.
"The cross-promotions are spreading out to include more participants, which is great for us," said Rick Ang, buyer at Video Mart, Sacramento, Calif., which racks video departments in 17 Bel Air supermarkets in the Sacramento area. "It results in saving the consumer some money if they use the rebates," he said.
"More and more companies are trying to get involved with these blockbuster hits," said Gary Schloss, vice president of grocery and general merchandise at Carr Gottstein Foods, Anchorage, Alaska. "They tie-in and offer some kind of bounce-back type of rebate," he said.
The amount of video cross-promotional activity this fourth quarter is so great that even the people who have counted them in the past have given up. "There are so many, we've lost count," said Michael Schau, executive editor of Entertainment Marketing Letter, New York. "It is an enormous number and it is more than ever before," he said.
The five tie-in partners for "Toy Story" and the nine-month lead time from the title's initial video release announcement have captured the attention of many retailers. In some cases, the promotional and merchandising effort given to "Toy Story" will pre-empt other titles, retailers said.
For example, Harps is putting so much into the "Toy Story" cross-promotion, it probably won't be able to go all-out on titles like "Twister," said Weddington. "Since I haven't gotten anything in on 'Twister' yet, I doubt that we will be able to put anything together that will come close to equalling 'Toy Story,' " he said.
"We will be bringing 'Oliver and Company' in, but we won't be going all-out in the same way that we will with 'Toy Story,' " said the unidentified video executive at the Southwestern chain. "There is so much coming out, and we are limited so far as space and what we can do," he said. Regular Halloween promotional merchandise -- candy and the like -- will cut into the retailer's ability to do other elaborate video displays.
The number of tie-in partners for "Toy Story" has impressed the video executive with a Midwest retailer. "They seem to keep coming out of the woodwork. I don't know where they are finding all these people. I get calls every day from brokers and manufacturers' reps wanting to set up meetings with the other buyers," he said.
The various rebates on "Toy Story" total $25. With a suggested retail price of $26.99 and the minimum advertised price at $16.95, there is potential for some consumers to receive more than they pay for the video.
"You could almost get paid to buy it," said Tom Styers, director of general merchandise and health and beauty care at Seessel's Supermarkets, Memphis, Tenn. The title has more rebates than "The Lion King," the all-time video sales leader, and this may help "Toy Story" move into the No. 1 position, he commented.
With in-store promotions, "you could net the price of 'Toy Story' down to zero or even lower," said Ang of Video Mart. "I see that spreading to other films as well," he said.
Indeed, with "Twister," the Fuji film and Tropicana rebates could total $24, depending on how much consumers buy of the other products. The title's suggested retail price is $22.96.
Increasingly, these offers are using instantly redeemable coupons instead of the mail-in rebates. For example, the cross-promotions of "Toy Story" and "Twister" use IRCs. This is a trend cheered by all the retailers surveyed by SN.
Food Lion has been concerned about customer frustration over the mail-in rebates, said Durrett. "We would agree that the IRCs have more appeal to the customer," she said.
With the growing acceptance of frequent shopper programs like Food Lion's MVP card, which offers discounts at the point of sale, "people are getting used to that kind of gratification. If they have to take an extra step and mail something in, they may not be as apt to do it," she said.
If a cross-promotion employs IRC, Carr Gottstein will be more likely to go all-out in building large displays, said Schloss. "We want to make it as easy as possible for the consumers, so they don't have to jump through hoops. We want it so there are no games or gimmicks," he said.
The IRCs "are the best way to go," commented Ang. "Sometimes, the consumers don't take advantage of the rebates like they should. The instant coupons are really appealing to the consumer and to the retailer," he said.
The video executive with the Midwest chain is "excited" about the $5 IRCs with "Toy Story" and "Oliver and Company." "Absolutely, they have more of an impact. But we'll cross-merchandise regardless of whether a promotion has IRCs. I just think you are going to have a better customer response with the IRCs," he said.
"Toy Story" has tie-ins with General Mills, Ocean Spray, Kodak, Energizer, Oral B, Burger King and other Disney videos.
"The Bridges of Madison County," a repriced rental title, with General Foods and other arner videos.
"Land Before Time IV: Journey Through the Mists," a direct-to-video title, with Lifetouch Portrait Studios, Kitchen Sink Press and "Wee Singdom: The Land of Music and Fun!"
"The Little Engine That Could" with Tyco Toys, Lifetouch Portrait Studios, Kitchen Sink Press and "Land Before Time IV."
"Timeless Tales From Hallmark" and "The Greatest Adventure Stories From the Bible," two lines that are cross-promoted with each other, with a $5 mail-in rebate offered.
"Family Home Entertainment Christmas Classics" with Glade, Lifetouch Portrait Studios and Tony's Italian Pastry Crust Pizzas.