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Finding Your Place in Sellthrough

28 Aug, 2005 By: Kurt Indvik

There has been a flurry of discussion in our offices here this past week surrounding the issue of sellthrough in the rental store environment. We got numerous letters from an article written by Home Media Retailing's director of market research Judith McCourt, titled “Rentailers Missing the Boat on Sellthrough.”

The lively discussion has been carried over on the iDEA discussion board, where a number of rentailers exchanged a lot of terrific advice and insight into their approaches to the sellthrough issue.

If I had to venture a summary of the discussion, I would say that the rentailers participating in that discussion do feel that sellthrough is important for their future, and that they are all looking for the right pricing models and product mix to make that a reality. At the end of the day the bottom line is to create the impression in consumers' minds that they can shop and buy at your specialty store. To create that impression, however, does take a fairly significant commitment to the sellthrough business in whatever form you want it to take in your store.

It comes down to product selection, as one rentailer said. Sure you can't compete on the new hit releases, but maybe that's where your previously-viewed business focuses. To be a destination for new product, take a look at your customer base and what their genre interests may be, then analyze your surrounding competition and find out where the gaps are. That could be your sweet spot. For some rentailers it's been heavy on the horror, Asian, anime, or gay films, for others it could be Latino product or maybe its just a strong selection of foreign and art house. Likely, it's a combination of a number of these or other categories. One rentailer cautioned to ensure that your new sellthrough product doesn't compete with your PVT.

The video specialty store is the one specialty retail business that does not (predominantly) sell its product. Certainly, this business was built on the rental retailer and rental will continue to be a significant business (and may enjoy an upswing soon). But consumers are now, and forever will be, just as inclined to buy movies and other video they feel is priced right. And the video specialty store should be a destination for sellthrough every bit as much as the mass merchant selling today's hot movie.

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