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A ‘Retailer-Led Craze' Start to the Holidays

1 Dec, 2003 By: Kurt Indvik

A woman in Orange City, Fla., got trampled last Saturday in a Wal-Mart as crowds rushed in to get their hands on one of the $29 DVD players on sale. She was found, unconscious, atop a DVD player, and was rushed to a hospital where she was reportedly kept over the weekend.

And so the holiday shopping season begins. I was in my local Target store over the weekend, and the DVD shelves already looked a little thrashed even as at least a dozen people were quickly scanning the titles for discounts.

Analysts have been mixed about this season's prospects for retail performance, even as indications of an economic uptick continue to come in from various economic indexes (although try telling that to the unemployed).

But it appears that DVD hardware and software will likely enjoy a stellar run at retail, even as retailers discount to bring in the customers. Those bargain-basement DVD prices retailers were promising (reported in last week's Video Store Magazine), at least in the aforementioned Wal-Mart's case, certainly did what it was supposed to do. Indeed, Wal-Mart reported slower-than-expected sales in October, and Lee Scott, chairman and CEO, is quoted in this week's issue of Video Store Magazine as saying he thinks consumers will continue to be cautious in their spending over the holidays.

The NPD Group's chief industry analyst, Marshal Cohen, said, in the same article, “Lately, we've seen an absence of retailer-led product crazes …” in saying he thought consumer shopping excitement was tepid.

I'd have to disagree. This year, I think DVD is already proven to be the retailer-led hot item for the holidays, as both hardware and the hot new DVD releases are being offered at huge discounts. It still has a high perceived value and, in these uncertain economic times, is right in the sweet spot pricewise as far as gift giving goes.

With hardware pricing plummeting and studios throwing some of their biggest 2003 hits into the season, it's going to be a very busy four weeks, indeed.

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