DISCOVERY COMMUNICATIONS LOOKS TO EXPAND DISTRIBUTION AREAS

JOHN KAROLEFSKI

BETHESDA, Md. -- Discovery Communications is looking to expand the Discovery Channel franchise that it has developed in PetSmart pet supply superstores and in The Nature Co. retail outlets into other formats that could include supermarkets. "Our business plan for 1996 is to look to creating Discovery Channel centers in other types of retail formats," said Andrea Roberson, senior manager of retail marketing at Discovery Communications, Bethesda, Md. Other formats besides supermarkets could be a department store, book store, specialty store or a home improvement super warehouse store, such as Home Depot, she said. Some retailers may carry 17 Discovery Channel products that are displayed in 17 different areas within the store. Discovery Communications would like to pull all the products together into some type of Discovery Channel center, she said. The Discovery Channel Center in PetSmart stores is allocated from 500 to 700 square feet. The PetSmart people buy products for the centers and run the department. The section varies by store. The "center" in each PetSmart store consists of an island area or power aisle filled with Discovery Center products, including nature-related, educational and fun items for adults and/or children, such as home videos, puzzles, apparel and CD-ROMs, she said. Some stores also have interactive kiosks that permit consumers to view two- to three-minute clips of Discovery Channel home videos. A few stores are testing multimedia titles that are nature-related. The relationship with PetSmart began about two years ago, Roberson said. "They approached us. They wanted to differentiate themselves in the pet superstore marketplace. They wanted to appear more savvy and appeal to more people," Roberson said. Discovery Channel centers already have been set up in more than 200 PetSmart locations. Last year PetSmart acquired another pet superstore chain, PetStuff, which resulted in an increase in its store count to more than 300 units. About 25% of those units have already been retrofitted for centers and it is hoped that by July all will include a Discovery Channel Center, Roberson said. Nature Co. has always carried Discovery Channel products, but it was not until the beginning of the fourth quarter in 1995 that Discovery Communications approached the retailer with the idea of creating centers within the stores, with all Discovery Channel products displayed together, Roberson said. Now there are centers in 130 Nature Co. stores nationwide, she said. "They already carried all our nature products, video and CD-ROM. We suggested creating media centers within those stores to merchandise them, highlighting Discovery Channel's product first," she said. About four different store layouts are used for Nature Co.'s centers, she said. "The center is not the same in every store. It has done a good job of bringing focus on our products. Some Nature Co. stores have multimedia computers where you can demo only our products. Some have video monitors where consumers can watch a clip to preview a video," Roberson said. Sometime this spring a Discovery Channel catalog of multimedia products will be available in Nature Co. stores, where consumers can order product directly from the catalog and the order will be fulfilled through Nature Co.'s distribution center, Roberson said. The catalog features Discovery Channel products that might not be carried in Nature Co. stores due to space restrictions or themes. Nature Co. stores limit their merchandise to nature and science-oriented products. The stores would typically carry weather vanes, bird feeders, music, astrology, prints, photos, jewelry, telescopes, and nature and science items for the education and entertainment of the whole family. The partnership with Nature Co. was intended to bring more attention to Discovery Channel products and merchandise them, to attract more viewers to Discovery Channel programming and improve circulation and turns of the products, Roberson said. The product mix in the Discovery Channel centers in both the PetSmart superstores and the Nature Co. specialty stores is constantly changing, with slower movers being replaced by new items, she said. "We have a kind of criterion we go through strategically in determining who our partners should be. We need to know their exposure to our brand's target audience. Can this partnership increase top-of-mind awareness, provide incremental product sampling, let us access alternate distribution channels? "Larger stores with pet areas probably could have a Discovery Channel center. Computer superstores and video stores would also work. We are looking for businesses we can leverage for our brand through the association," Roberson said. "I don't know if a center would necessarily work in a mass merchandiser type store, such as Wal-Mart or Kmart. They are getting more savvy with their home entertainment products. They do carry our products, so we already have a relationship with them," Roberson said. The core demographics of people who shop in PetSmart stores include pet owners and people who love animals. Similar characteristics were discovered in PetSmart's preferred customers and viewers who watch Discovery Channel's nature programming. Discovery Channel's targeted demographic encompasses people between the ages of 25 to 54 and skews toward males and families. In the daytime, Discovery Channel appeals to women. Upcoming projects for Discovery Channel include a test of direct mail offers and possibly some cobranding efforts, she said. For example, high traffic sales periods, pet adoption days or days with extensive nature programming could be targeted for extra merchandising efforts, she said. When shark programming is aired, Discovery Channel centers can have special displays of posters, T-shirts, videos and CD-ROMs that tie in with the shark theme. Some stores may even choose to sell baby sharks for home aquariums, she said. When the movie "Twister" is released, it will create a merchandising opportunity for both Discovery Channel and Nature Co. The "Operation Weather Disaster" CD-ROM, a weather home video, and the retailer's existing inventory of weather vanes and barometers would be appropriate tie-ins.