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Some Holiday Scenarios

8 Aug, 2004 By: Kurt Indvik

Ah, what a difference a few years makes.

A recent Jupiter Research consumer survey shows that only 8 percent of respondents plan on purchasing a DVD player, or an upgraded version (I am assuming this might include a 2nd player? but that's open for debate as to how one would perceive the question) over the next 12 months.

As DVD players reach near the 70 percent U.S. household penetration mark, the number of DVD newbies begins to dramatically decline. And the huge leap in DVD installed base that occurred with every holiday season in years past becomes more like a little hop.

This may explain why the studios this year are opting to cram most of their big hits into the holiday gift giving season and not, it appears, save much for the post holiday “Fifth Quarter” season in January when, historically, you could count on a lot of new DVD player owners coming into stores looking for movies to play on their shiny new machines.

But there are some other interesting dynamics that we might see this holiday and post holiday season as DVDs become a staple gift in just about every American household.

--DVD gift givers will be looking for alternative choices. The fact is that as sellthrough has become the norm for many consumers when it comes to the big hits, chances are your intended gift recipient will already own Shrek 2 by the time Christmas rolls around (or won't be willing to wait for Christmas to have you give it to him or her). So if DVD is still your gift of choice, you're going to have to find something new and different to give, and that means getting some help picking a nifty catalogue titles that will be a success Christmas morning. It will be interesting to see what catalogue titles do well this year.

--Returns will be interesting. As more and more people get DVDs during the holidays that they already have (for those gift givers that didn't think), chances are a good many of them may find themselves with a DVD and no receipt. That means they will have to exchange these things somewhere. If you're an indie retailer, you might consider how you could absorb some of this unopened, excess product and gain a customer. If you're in the trade-in business now, you might consider some sort of holiday exchange. If you're not, this might be a good time to try something in this vein, even if for a limited amount of time.

--As previously viewed sales continue to climb to be a multi-billion dollar business this year, don't forget that a lot of kids get some serious cash during the holidays and will be looking for a place to spend it on December 26. You might consider appealing to their sense of value by promoting the fact that they can get a lot more bang for their buck with previously viewed movies and previously played games. I'd make sure they had that at the top of their minds the day after Christmas as that money started burning a hole in their pockets.

There are plenty of ways the full spectrum of home entertainment retailers can participate in this year's holiday season. It's just a little different every year.

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