RETAILERS HOPE FALL RENTALS TURN A NEW LEAF

DAN HARRISON

Among the hits heading for supermarket rental racks in the fourth quarter are "Primal Fear," "The Rock" and "Eraser."

Additionally, many retailers expect to do a big rental business on sell-through-priced movies such as "Twister," "Flipper," "The Adventures of Pinocchio," "Mission Impossible," "The Nutty Professor," "Independence Day" and "Toy Story."

One of the more aggressive video promotion efforts in recent months has been at Bashas' Markets, Chandler, Ariz. Among the changes implemented by video specialist Bill Glaseman has been an increased number of copies of the same movie. "We don't have that many large departments, so we are limited in space, so we turn boxes sideways in addition to front facings," he said.

In addition, in June Bashas' started advertising on a Phoenix FM station. The ads feature steady listings of best renters, new releases and kids' movies. Store locations are mentioned since some units don't have video departments. Bashas' also has begun monthly trivia contests involving fliers at the video department. One has to rent a movie to win (from a drawing for such prizes as T-shirts and carrying cases). The effort has hyped sales, Glaseman said.

In April, Bashas' also began a bag-stuffer promotion featuring 50-cent coupons for one or two titles in fliers, which are also available at the video department.

A small chain facing Blockbuster competition, Lincoln, Neb.-based B&R Stores, is seeking to do something that the video giant doesn't: give movies away. Video buyer/coordinator Bob Gettner is planning a quarterly promo program that aims at creating "pizzazz" through the undefined giveaway effort.

Gettner believes that great sell-through helps rentals, but admits that "unfortunately, we have to use sell-through as an attraction for rentals. We discount sell-through more than we'd like. That gets them into the store and maybe they'll grab a rental."

In B&R's two newest stores, a new rental format has been initiated that moves the chain away from empty rental boxes on the shelves. With the new units, the chain went with small color cards with the movie on the front and back of the card. The choice stemmed from space factors, but Gettner admits, though, that there's a downside: "It's hard for older customers to read the cards, and it doesn't have the same feel as picking up a box. This could retard rentals, which are so often an impulse buy that's more possible with a box than a card. But an initial sales decline has leveled off."

A number of retailers, including Gettner, have stuck their toes into the CD-ROM rental waters. Here, though, they caution that such rentals only make sense for certain store demographics -- i.e., more upscale, with heavy computer users. Randy Weddington, video specialist at Harps Food Stores, Springdale, Ark., noted that he tested "low-end sell-through product" before starting rentals.

One key to boosting Harps' video rentals has been a revenue-sharing program with its distributor that enables offering many more titles, including many that others don't carry. "We probably have three or four times the titles than traditional sources, including A and B titles," Weddington said, "and this helps us compete."

But there's a two-pronged challenge: pressure on department space and the need to boost volume, with revenue-sharing, as Weddington put it, "to stay ahead." He aggressively promotes rentals through a guaranteed rental program (the consumer gets a free movie if Harps runs short), discount coupons on hot titles and discount rentals for students' good-grade report cards.

But if distributors sometimes come through with promotional support, such isn't always the case with studios, at least not in Smithart's view. He feels that studios don't help any but big retailers with "support at the grass roots, especially since rental has been easy money for them for years. They could, for example, have reps visit me and stores once a month, every six months or every year. In fact, I couldn't tell you the last time one was in."

Smithart believes that it's too easy for a retailer to assume that what happens in one area will happen in another. Different markets and stores, he said, need different promotion and display ideas. "You need to be specific on what titles would be most suitable." Smithart added that although small retailers need help, prices are escalating and they can't raise prices due to competition and a soft market.

Gregg Wright, president of racker firm Video III, Orem, Utah, foresees a large increase in rentals for the fourth quarter. "Rentals that we get at a sell-through price will do well. You only have to rent five or six times on these titles to make money since they're cheaper to buy than other rentals -- $15 on sell-through titles vs. $65 or $70 on rental titles.

"What works best for us is the R or PG-13 title at a sell-through price. People won't buy an R title, but they'll rent it, so we'll make out on those rentals."