STEPPING UP TO THE PLATE 1997

DAN ALAIMO

The bloom may be off the rose for in-store cross merchandising of sell-through videos with related products from national promotions, but retailers are very interested in the potential of linking video to home-meal replacement programs.

HMR tie-ins stirred considerable interest with more than 50% of retailers polled. Of those questioned 29.5% plan to cross promote video with ready-to-go prepared meals in 1997, and 27.3% said they are actively considering it.

But the average number of titles that retailers actively cross merchandised in-store with the products of cross-promotional partners, like the movie "Twister" and Tropicana Twister drinks, has declined steadily in the last three surveys. This year it was 2.7% down from 3.2% last year, and 4% the year before, according to SN's sixth annual State of the Industry Report on Supermarket Video.

The percentage of respondents that said they cross merchandise regularly with related items also went down the last three years, to 25.5% this year, from 38.2% the last year and 41.2% the year before.

"We've tried cross merchandising in the past, but haven't had a lot of luck with it," said Matt Dillon, video director for Boogaarts, Concordia, Kan. "Our biggest problem is the logistics of tying in with a grocery display that might be in the back of the store, or somewhere else. I prefer to keep my departments together," he said.

But in-store territorial issues that inhibit cross merchandising are the same for every class of mass retailing, said Allan Golden, vice president of sales at PolyGram Video, New York. "You run into competition over who controls the square footage and it is sometimes very difficult to get video placed outside the video rental department, or even soap placed outside of where soap should go inside a supermarket," he said.

But a video executive with a major Midwestern retailer said, "I just don't find it very effective to have a Pillsbury cross promotion where the customer has to buy $30 worth of product to qualify for a $5 rebate."

That chain is doing less cross merchandising than it used to, he noted. "I don't think our grocery department found that they moved any more product for them than otherwise. It's too confusing -- there are too many products involved, and too many hoops for the customer to jump through," he said.

But Disney contends that cross merchandising still works if it's done right. For example, Disney research found that stores cross merchandising the studio's Masterpiece Collection videos with General Mills cereals sold up to 370% more videos than stores that displayed them separately, according to an official at Buena Vista Home Video, Burbank, Calif. One retailer increased sales of Kodak film 50% when it was cross merchandised with "Toy Story" last year, the official added.

Dinner and a Movie

More than one-half of survey respondents are planning or actively considering tie-ins with video and home-meal replacement.

Do you plan home-meal replacement cross promotions with video?

Actively Considering 27.3%

No 43.2%

Yes 29.5% (pie chart)