By : Erik Gruenwedel | Posted: 11 Nov 2009
egruenwedel@questex.com

Best Buy Co. is ramping up its Blu-ray Disc software push this holiday season, allocating up to three times as much floor space to the high-definition disc as it did last year and working with two studios to test new store patterns.

Throughout its 1,023 U.S. stores, the Minneapolis-based consumer electronics chain — reportedly the nation’s No. 1 Blu-ray Disc software retailer — is allocating up to 30% of its entertainment retail space to Blu-ray, up from 10% in the 2008 holiday season.

In some stores, the Blu-ray Disc software section has been moved up front, replacing CDs, which have been pushed to the back.

The switch is significant as Best Buy typically generates 50% of its holiday foot traffic through entertainment, according to analysts. The chain, which has upped efforts to capture the nascent migration toward digital distribution of movies and TV shows, reported as a 23.4% decline in entertainment software sales in the most recent fiscal quarter.

Best Buy also is working with Universal Studios Home Entertainment and 20th Century Fox Home Entertainment in 13 so-called “movie test stores” in Los Angeles and Chicago.

In those stores, studio retail representatives have created standalone kiosks and product placements showcasing newly released Blu-ray titles that are surrounded by secondary DVD releases and catalog fare, according to Diane Sherwood, Best Buy’s merchant director for movies.

Specifically, Fox created “bull-nose” sections devoted to comedy, horror or drama characterized as “islands of interest” designed to pull in customers. Universal created similar new-release fixtures in the middle of stores surrounded by catalog fare and highlighted by expressive signage.
 
“The customer has to walk through the catalog titles to get to the new releases,” Sherwood said. “We are seeing increased consumer interest in that.”

She said Best Buy instituted a policy that lets consumers unable to find a title (Blu-ray or DVD) to order it, and it will be shipped to them for free.

Sherwood said the idea behind the “test stores” is to help customers find the titles they’re interested in, in addition to getting them to “interact” with catalog product.

“Our focus this holiday season is definitely Blu-ray and stepping customers up to [the format],” Sherwood said. “We are definitely driving the industry in Blu-ray promotions.”

She said many Best Buy stores have “re-flowed” entertainment departments to allow Blu-ray Disc titles to be displayed face-out (with the front cover showing) rather than library-style, with only the spine visible. This gives customers a “better shopping” experience, Sherwood maintains.

In addition, home theater departments feature Blu-ray end-caps highlighting the steps and product required to experience HD movies in the home.

Sherwood said stores also have implemented genre-specific Blu-ray sections, in addition to carrying budget-priced Blu-ray titles selling for as little as $10. Freestanding bins offer DVD titles from $4.99.

“We keep wondering why the [Blu-ray] adoption may not be exactly where everybody had hoped it would be,” she said. “What we’re hearing [in focus groups and test surveys] is that consumers want to get the most out of their high-definition television. And Blu-ray delivers that.”

She said the in-store focus has moved beyond the Blu-ray log to signage changes in the home theater department, online, gaming and brochures spelling out the benefits of the HD format.

Sherwood said the traditional in-store Blu-ray content playing on TV displays has been altered to focus on educating consumers that the HDTV experience can be replicated in movies. The educational process includes training store employees in home theater training, signage and monthly updates in “The DVD Insider” distributed monthly in stores.

“It’s not enough to just call out the Blu-ray logo and say that it’s a premium product,” Sherwood said. “We need to land what the customer is asking for and solve their problems. It is really about making it an end-to-end experience.”

She said no decision had been made whether to emulate Wal-Mart, Target and Amazon by offering fourth-quarter new-release DVDs for $10.

“I hate to see prices dive so low,” Sherwood said.

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