JEWEL-OSCO TESTS DVD VENDING MACHINES

Stephanie Loughran

MELROSE PARK, Ill. -- Jewel-Osco here, a banner under Albertsons, Boise, Idaho, began testing DVD vending machines in four stores this month, according to retail sources at the grocery and drug store chain.

The DVD rental machines from Getamovie, Schaumburg, Ill., began operations in Jewel-Osco suburban locations in Westmont, Ill., Bolingbrook, Ill., and two stores in Naperville, Ill.

"The technology is there, and it offers customers the opportunity to see if [renting DVDs through vending machines] is a viable option for them," said Doug Cygan, vice president, grocery merchandising, Jewel-Osco.

When asked why supermarkets are a good fit for a DVD vending format, Mike DeLazzer, chief operational officer, Getamovie, said that it comes down to convenience.

"Anything that can simplify the consumer's life is seen as helpful," he said. "Many supermarkets are becoming one-stop-shopping locations where you can get food, do your banking, purchase concert tickets, and now rent movies and video games."

The machines showcase 42-inch plasma television screens and house 1,500 DVDs of 450 different new-release titles, said DeLazzer. Inventory is updated weekly, he noted.

While customers do not have to become a member to rent a DVD, members have the ability to reserve a copy of a particular movie online at www.getamovie.com before they go to the nearest Jewel-Osco store, said DeLazzer. Members also receive their first rental for free.

The machines are located in the front of the stores close to another service department, the film and camera section, said Jane Liska, assistant sales manager, Jewel-Osco.

"We hope to offer added convenience and service," she said. "It gives customers the opportunity to save a trip."

Although the DVD rental machines are in test mode, the retailer will expand the service to other stores depending on the machines' success, she said.

"We'll see what happens," Liska said. "We're very excited about it."

Movies start at $3 for a one-day rental, $3.50 for two-day rentals, and 99 cents for every day beyond the two-day period. Customers rent the movies using a credit card or membership card that is linked to a credit card.

The machines are linked by high-speed Internet access, which allows the DVD supplier to look into each machine, do inventory analysis, and perform software upgrades without visiting the store, DeLazzer said. Getamovie machines employ a robotic mechanism that vends DVDs as well as returns them to inventory.

This state-of-the-art technology, copy-depth availability and updated inventory are reasons why this format will succeed where older VHS rental units failed in the past, DeLazzer said.

The VHS vendors "had the look and feel of the old sandwich vending machines," DeLazzer said. "You weren't quite sure how many weeks or months the sandwich was sitting there."

During the first few weeks after the launch, Getamovie representatives have been in stores during peak hours to inform customers of the service and assist in membership sign-ups, Liska noted.

DeLazzer said that Getamovie plans extensive in-store cross promotions in the future, such as dinner-and-a-movie specials, or giving out a free rental with a birthday cake purchase.