VENDORS GIVE TIPS ON SPECIAL-INTEREST

DAN ALAIMO

UNIVERSAL CITY, Calif. -- Supermarkets have made significant progress in merchandising special-interest videos, but still have a long way to go. These tapes have better margins than other products in the stores, including the big hit sell-through titles, said suppliers polled at the recent Special Interest Video Association convention here. The right product at the right price point with adequate promotion and merchandising will deliver sales volume that justifies the floor space, the suppliers said. "The supermarkets that are carrying video are doing such a good job with it that they are starting to look at it as a true business now," said Philip Kent, president of Turner Home Entertainment, Atlanta. Stop & Shop, Boston, and Hy-Vee Food Stores, Chariton, Iowa, both did well with continuity promotions of Turner's "Baseball" series, he said. But there remains strong growth potential in supermarkets for special interest in both rental and sell-through, especially when there are cross-promotions involved, the suppliers said. "The biggest potential for the supermarkets in special interest is in the kidvid category," said Louis Feola, president of MCA Home Video, Universal City, Calif. "The supermarkets also should remain open to opportunistic situations, specifically when there are products that are cross-promoted and cross-marketed with other products that they carry in their stores. Then they can make a big promotion even bigger and they will have a competitive advantage because they will have both products merchandised side by side," he said. Here's what other suppliers had to say about special interest video in supermarkets:

Richard Chemel Western sales manager

Diamond Entertainment Anaheim, Calif.

We market our programs so that we don't want them sold inside the video section. They are promotion items in supermarkets and they sell. If the product is by a checkstand as a stand-alone display, we feel it does better. It is an impulse item at an impulse price, a value price. The products that do best in supermarkets are the computer series, the film classics, the cartoon series, the Christmas classics and the great Western classics. The nature series also is starting to take off in supermarkets. All that product is evergreen. We'd like to set up promotion programs with supermarkets year-round, and be in there every two or three months with a new program. That's our ultimate goal.

Michael Gottsegen chief executive officer

3-G Videocassette Corp. Canoga Park, Calif.

More and more supermarkets are giving special interest video retail space whether it's in-and-out promotions or endcap continuity programs. It increases excitement for the supermarket, increases profits and gives the consumer -- especially in continuity programs -- a sense of real value. So I'm very encouraged about the reaction from supermarkets. It used to be that supermarkets only considered putting in A titles, but video has become such an important part of the overall shopping experience for the consumer that the retailers are looking to expand.

Special interest -- whether it's sports, fitness or special kidvid -- is a wonderful opportunity. Of special interest categories, anything directed toward children will be a big winner for supermarkets. The bigger the display area and the merchandiser, the more attractive it will be to kids.

Jane Murphy chief executive officer

Kidvidz Newton, Mass.

With respect to special interest in supermarkets, I know it is happening a little bit and I think it should be happening more. For example, there are the cross-promotional types of opportunities with other products in supermarkets. Where supermarkets are renting and selling children's products, it's a real enhancement to bring a title in first for rental and create the awareness.

Product mix is important. The blockbuster titles are everywhere. There is room for Disney, but there also is room for some high-quality special interest programming, such as how-tos for kids and live action. Supermarkets that bring these products in certainly will see them move in rental. As long as they are quality and they have endorsements, awards and reviews, the retailers will know they are getting decent products.

Joanne Held manager, retail sales

National Geographic Video Washington

The supermarkets are a great arena for children's products, nontheatrical and theatrical. As the prices on special interest video decline, I see supermarkets embracing it more. Timing is important. For example, when "Free Willy" came out, we put our "Great Whales" tape in some supermarkets and it did very well. People were buying the theatrical version and the kids wanted more information. One of the biggest problems supermarkets have is not enough shelf space for video. Sometimes the in-and-out promotions are successful and sometimes they aren't. But if you have a good line of special interest videos in the supermarket year-round, sectioned-off in good shelf space, they will do much better. When you throw all kinds of titles together on one rack, it is hard for consumers to pick through and find what they want. From what I've been told, people don't make much money on the hit videos. It's a good draw. It gets traffic in the stores. But if you are looking to make money, first you have to make a bigger commitment to shelf space for the products.

Jim Lyle president

Video Publishing Resources New York

I see supermarkets evolving from the discount-rental position into more sell-through, which is a little more specialized, with certain kinds of service racks. Beyond a couple of natural subjects -- diet, exercise, nutrition and health and beauty -- I still think it is a stretch for supermarket customers to be involved with special interest subjects that don't relate to that environment. The supermarket is a very focused place. In the area where I live, I have seen the evolution of the super store concept. The small behind-the-counter video operation has grown up and, in the case of a large Stop & Shop store, they have taken over freestanding store fronts. They have done things much more progressively than many video retailers.

John O'Donnell managing director

Central Park Media New York

Speaking from the point of view of our specialty, which is Japanese animation for the high school and college crowd, we were finally successful this year in convincing supermarket chains to carry our products. Wegmans Food Markets, Rochester, N.Y., for example, tested the product. It was very successful and they came back for more. With the test results in from Wegmans, we have now been able to open up discussions with other supermarket chains. Previously, the concept of subtitled Japanese animation aimed at older people was a tough concept for them to consider bringing in. But now that we have a track record, we are talking to more and more retailers.

Thomas Heymann director, home video

Arts & Entertainment Network New York

It makes a lot of sense for supermarkets to get more deeply involved with video. When you think of certain natural products that would work in a supermarket, like cooking tapes, that's a logical point of distribution. We are also looking into continuity programs in supermarkets, because many of our programs come in sets. For that kind of program, a continuity series makes sense and supermarkets are good at doing that. We are working with our dinosaur program in supermarkets. That is a four-part continuity series, but I can see these programs going longer. The supermarkets see this kind of product as a money-maker. It probably has better margin than food products. It's a way to build margin and it also could be perceived as a customer service.